“Break ’em up”: As DOJ targets Google, Zephyr Teachout urges breakup of more big tech monopolies

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23 October 2020

Justice Department and 11 states sue Google in antitrust case: 'Long overdue'

The Department of Justice and 11 states have filed a major antitrust lawsuit against Google in a move that could lead to the breakup of the company's business and holds major implications for other tech giants. The lawsuit accuses Google of engaging in illegal practices to maintain a monopoly on the search market, which fuels its dominance in online advertising. Fordham law professor Zephyr Teachout, who has long advocated for breaking up Big Tech monopolies, says it's "an incredibly important lawsuit" that should be the start of a wave of legal and legislative action to tackle "this incredible democratic crisis we have of Big Tech really becoming a form of private, for-profit government that is taking over so many parts of our lives."

AMY GOODMAN: The Department of Justice has sued the internet giant Google in a massive antitrust lawsuit that will have major implications for the rest of Big Tech and may even lead to Google's breakup. Eleven states joined the lawsuit, the largest of its kind against a tech company in more than two decades. It accuses Google of engaging in illegal practices to maintain a monopoly on the market, including by spending billions of dollars each year on deals with Apple and other companies to appear as the default search engine on handheld devices and browsing services. Through these practices, Google, quote, "owns or controls search distribution channels accounting for roughly 80 percent of the general search queries in the United States," according to the Department of Justice.

The DOJ complaint reads, in part, quote, "The Google of today is a monopoly gatekeeper for the internet, and one of the wealthiest companies on the planet … Google has used anticompetitive tactics to maintain and extend its monopolies in the markets for general search services, search advertising, and general search text advertising — the cornerstones of its empire," unquote.

The complaint continues, quote, "Absent a court order, Google will continue executing its anticompetitive strategy, crippling the competitive process, reducing consumer choice, and stifling innovation," unquote.

For more, we're joined by Zephyr Teachout, professor of law at Fordham University and author of the new book Break 'Em Up: Recovering Our Freedom from Big Ag, Big Tech, and Big Money. Earlier this month, Professor Teachout testified at the Subcommittee on Antitrust, Commercial and Administrative Law Judiciary Committee investigation into competition in digital markets.

Zephyr Teachout, welcome back to Democracy Now! Can you talk about the significance of this lawsuit and what it means?

ZEPHYR TEACHOUT: Thank you for having me.

It is an incredibly important lawsuit, and it is clearly just the beginning of what should be a series of both lawsuits at the federal and state level — keep your eyes on the states — and legislation to deal with this incredible democratic crisis we have of Big Tech really becoming a form of private, for-profit government that is taking over so many parts of our lives.

As you mentioned, it has been decades since we have seen a antitrust case of this kind, not just against Big Tech, but in general. The last big one, of course, was Microsoft. And as most people understand, the case against Microsoft was actually essential in leading to the innovations that followed in Silicon Valley.

But in the last 10, 15 years, you've seen these Big Tech giants consolidating power and then protecting their power through illegal means. And what this complaint lays out is now years and years of illegal practices of Google coming to not just dominate, but then illegally protect its monopoly in this area. And just being a person in the world, you know what a monopoly Google is, that search is an essential part of all of our lives. It's an essential gateway through which everybody has to pass.

And, I mean, this suit comes right after the major report by Cicilline, the House Antitrust Subcommittee report, which really took pretty direct aim at enforcers for their pathetic failure to do their job with existing antitrust laws, and called for Congress to act because of the nature of the democratic crisis we face.

JUAN GONZÁLEZ: And, Zephyr Teachout, I wanted to ask you about some of the revelations in the complaint, specifically the close ties between some of these tech giants, like Google and Apple, that — because, on one hand, Google is arguing that the default — that its use of its search as a default on Apple equipment is not a big deal because the user can switch it. But at the same time, it was revealed that spending $8 billion to $12 billion — paying Apple $8 billion to $12 billion a year just to have Google's search be the default on all Apple equipment?

ZEPHYR TEACHOUT: Yeah. No, this is a really important revelation. I mean, there's some aspects of this lawsuit where those of us who have been watching this field are saying this suit should have been brought a long time ago. A lot of Google's behavior is really obvious. It's obvious there's a monopoly, and it's obvious that it's been using its power to maintain its monopoly, using its contractual power to do so.

Looking at the relationship with Apple is really important, because here you have Google paying Apple. And I think it helps just clarify something that I argued in my book, which is that we are dealing with something akin to Mafia power, where you have a handful of big companies that theoretically compete, but they're also supporting each other in growing their power, and they are effectively competing against democracy. It's an alternate form of governance. And so, here you have Apple getting rich off of Google maintaining its monopoly. And what I think this points to is the importance of people understanding that this suit only is the beginning and has to only be the beginning.

The Antitrust Subcommittee, Cicilline's investigations, was absolutely revelatory. And this was a House committee with five staffers going up against these four Big Tech firms. And we learned about self-dealing behavior on Amazon's part, the way that Apple operates. And we have enforcers who have just been sitting on the sidelines for decades, kind of acting as if there's something magical about tech, that we — they're acting in two ways. One is that there's something magical about tech, that if we actually enforce basic laws, then you can't have nice things — tech will go away. In fact, all of history suggests the opposite, that antitrust is essential for innovation. And this is something the suit talks about. But it also shows just how deeply both, honestly, Democrats and Republicans have bought into this really dangerous idea that we don't have an anti-monopoly problem unless you can precisely point to consumer prices going up.

But I want to talk about the harm here, because I think it's really important to understand how this relates to the moment we're living in.

JUAN GONZÁLEZ: Well, I wanted to ask —

ZEPHYR TEACHOUT: And I — go ahead.

JUAN GONZÁLEZ: I wanted to ask you, though, in terms of this issue of Democrats and Republicans, could you comment about the decision of Attorney General William Barr to bring this lawsuit just before the elections? Apparently, many of the lawyers who were working on this case felt that they were not yet ready, but for some reason the attorney general moved forward. And also, that there was an investigation of Google back during the Obama years, where, apparently, some Obama-era justice officials felt that they should be moving forward on antitrust, but that didn't happen back then. Could you talk about how the Republican administration is dealing with it, Trump administration now, and how Obama dealt with it several years back?

ZEPHYR TEACHOUT: I mean, we had a real revolving door problem with Obama and Google, in particular, and a failure during the Obama years to bring antitrust cases, to be aggressive enforcers. And this is one of the things the Cicilline report really lays out, is this decades of nonenforcement.

I do think it's important — look, Barr should be impeached. He should have been impeached a while ago. He is lawless. He has undermined the rule of law. And I have been regularly calling for his impeachment and have zero respect there.

But this is a pretty narrow, slam-dunk case. And I would be wary of understanding it in partisan terms. I want to point to the statement of Attorney General Tish James yesterday, a very powerful statement, which is clear that they are going forward with a Google investigation. And I'll actually be really interested to see if they even expand it beyond what — this kind of pretty narrow, but pretty central claim.

I also want to say something that Amy mentioned that is really important to understand about this case. When we're talking about remedies, what do you do when you have a search engine which has become basically public infrastructure, but it's profit-seeking, data-mining, privacy-destroying, small-business-crushing public infrastructure? What do you do? Well, the legal recourse we have under current law is to break it up. And that is not off the table in this suit. In fact, structural remedies — when you see structural remedies, that's code for breaking up — is mentioned in the lawsuit.

But one of the things this moment then — this lawsuit does is, while it's going forward, it pushes the ball back to Congress, because we may decide, you know, we want to have a search engine that we all share; we just shouldn't have it be profit-seeking, nontransparent, self-serving. We might want to then move to a public utility model, where you can have a search engine, but the search engine doesn't rely on targeted ads and the sucking up of individual personal and, by the way, political data in the way that it currently does. So this lawsuit sort of squarely puts Congress in the position to say, "What kind of public communications infrastructure do we want to have?"

AMY GOODMAN: Zephyr Teachout, senior vice president of Google affairs, Kent Walker, responded to the lawsuit in an article titled "A deeply flawed lawsuit that would do nothing to help consumers." In it, Walker writes, "People use Google because they choose to, not because they're forced to, or because they can't find alternatives. This lawsuit would do nothing to help consumers. To the contrary, it would artificially prop up lower-quality search alternatives, raise phone prices, and make it harder for people to get the search services they want to use." If you could respond to this and follow through on the earlier point you wanted to make about the real-life harms that are done here?

ZEPHYR TEACHOUT: Yeah, yeah. I mean, look, this is — it's not a surprising press release. It's the same thing that Microsoft said in '98. It's basically what Standard Oil was saying. "Look, people are choosing us — even though we are forcing our product on those with whom we contract with."

But I do want to talk about the real-life harms. What the complaint talks about is the harms to innovation — and that's quite real — and the harms to privacy. So, if you have — right now if you are angry about how Google is gathering up your data, if you're angry about the way that Google is — basically, it's an ad company; we call it a search company, but it makes its money through the targeted ad business model — the recourse is to go beg Google to be better. And we know how well that goes. So, when you actually have a competitive market, with DuckDuckGo, which is — or Bing or Yahoo actually competing on grounds of saying, "Hey, we're going to protect your privacy better. We're going to do search in a way that isn't self-serving, isn't based on targeted ads," you actually lead to both more innovation and better consumer protection.

The direct harm that the complaint doesn't talk about, though, is that because of Google's monopoly, it charges an enormous amount, outrageous amounts, to people who need to advertise on it. And that's when we're thinking about the small businesses who are currently struggling right now. And so those small businesses then, having to pay more just to get seen, to get known, push that cost onto their workers. And there's recent research showing that — the ways in which monopoly power is a major driver of inequality. And that's something that isn't in the suit but we need to understand, is when you have monopoly chokepoints at the center of our economy, they use that power to go suck value out of businesses, who then turn around and push that harm onto workers.

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