Google and Microsoft: Antitrust déjà vu?

Comparing Google and Microsoft Antitrust Cases.

The U.S. Justice Department filed an antitrust suit against Google on 10/20/20.  The DOJ press release alluded to the similarities of Google’s alleged conduct with that of Microsoft in in the 1990s.

This will be my first of several blog posts in the coming weeks as the case develops.

From the 10/20/20 Justice Department Press Release:

“Almost 20 years ago, the D.C. Circuit in United States v. Microsoft recognized that

anticompetitive agreements by a high-tech monopolist shutting off effective distribution channels

for rivals, such as by requiring preset default status (as Google does) and making software

undeletable (as Google also does), were exclusionary and unlawful under Section 2 of the

Sherman Act.”

See the press release: https://www.justice.gov/opa/pr/justice-department-sues-monopolist-google-violating-antitrust-laws

Summary of the Google Complaint:

As I mentioned in my 10/26/20 video Q&A A Lawyer Breaks Down the Antitrust Case Against Google, I read the 66-page complaint.  I found especially interesting the explanation of how Google bought the Android operating system, licensed it for free, and then slowly got people hooked on it. This is on pages 19 – 27 of the complaint. The complaint can be found here: https://www.justice.gov/atr/case-document/file/1329131/download

The following language from the press release summarizes Google’s alleged monopoly practices:

“As one of the wealthiest companies on the planet with a market value of $1 trillion, Google is the monopoly gatekeeper to the internet for billions of users and countless advertisers worldwide. For years, Google has accounted for almost 90 percent of all search queries in the United States and has used anticompetitive tactics to maintain and extend its monopolies in search and search advertising.  

As alleged in the Complaint, Google has entered into a series of exclusionary agreements that collectively lock up the primary avenues through which users access search engines, and thus the internet, by requiring that Google be set as the preset default general search engine on billions of mobile devices and computers worldwide and, in many cases, prohibiting preinstallation of a competitor. In particular, the Complaint alleges that Google has unlawfully maintained monopolies in search and search advertising by:

  • Entering into exclusivity agreements that forbid preinstallation of any competing search service.
  • Entering into tying and other arrangements that force preinstallation of its search applications in prime locations on mobile devices and make them undeletable, regardless of consumer preference.
  • Entering into long-term agreements with Apple that require Google to be the default – and de facto exclusive – general search engine on Apple’s popular Safari browser and other Apple search tools.
  • Generally using monopoly profits to buy preferential treatment for its search engine on devices, web browsers, and other search access points, creating a continuous and self-reinforcing cycle of monopolization.

These and other anticompetitive practices harm competition and consumers, reducing the ability of innovative new companies to develop, compete, and discipline Google’s behavior. “

Summary of the Microsoft Court Case:

I also looked up the Findings of Fact in the U.S. v. Microsoft case.  They described how Microsoft used its dominant Windows operating system to force others to obtain additional products from Microsoft.  Finding number 18 provides a helpful description of their conduct:

“18. Currently there are no products, nor are there likely to be any in the near future, that a significant percentage of consumers world-wide could substitute for Intel-compatible PC operating systems without incurring substantial costs. Furthermore, no firm that does not currently market Intel-compatible PC operating systems could start doing so in a way that would, within a reasonably short period of time, present a significant percentage of consumers with a viable alternative to existing Intel-compatible PC operating systems. It follows that, if one firm controlled the licensing of all Intel-compatible PC operating systems world-wide, it could set the price of a license substantially above that which would be charged in a competitive market and leave the price there for a significant period of time without losing so many customers as to make the action unprofitable. Therefore, in determining the level of Microsoft’s market power, the relevant market is the licensing of all Intel-compatible PC operating systems world-wide.”

Conclusion:

The Google case could have even more far-reaching impacts than the Microsoft case. I’ll elaborate on the possible impacts in subsequent posts.

Thank you!

Michael Oswald

michael@msochartered.com

www.msochartered.com

Please note: the above post contains educational information. It is not intended as legal advice. Engage an attorney who is licensed in your state to get advice on dealing with any specific legal issue.

© 2020 Michael S. Oswald

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