Google, of course, is the elephant in the antitrust anteroom. The company is spending a lot of time and money on Capitol Hill in an effort to avoid becoming the next Microsoft—a tech company for whom the onset of antitrust troubles marked the high point in market dominance. Google, which has hired more than a dozen lobbying firms in the past year, has clearly taken the lesson to heart and is trying hard to avoid a similar fate.
Craig Wildfang, who served in the DOJ antitrust division in the mid-1990s, says there’s merit to the analogy, but that doesn’t necessarily mean Google will ultimately face antitrust action.
“I was one of the few senior staff at the DOJ present when that decision was made to sue Microsoft way back when,” he says. “Microsoft, like Google, had a very large market share in a rapidly expanding market and, broadly speaking, it appears Google has adopted a similar business strategy of trying to leverage the markets where they’re already dominant to gain advantages in other markets where they are not yet dominant.”
That’s not necessarily illegal, and even when it is it falls under the Sherman Act’s murkier half. Section 1 of the Sherman Act covers multiparty actions such as price fixing, which tend to be more clear-cut. Section 2 applies to anti-competitive actions of a single party, which are notoriously harder to prove.
“There’s a big problem drawing lines in these kinds of cases, and neither the DOJ or FTC wants to make a mistake and be blamed for stifling growth and innovation,” Wildfang says.
The impact of a DOJ action was intensely debated at the department before the Microsoft case, he says, and it certainly would be the same with Google. At the very least, the considerable consequence of taking on one of the world’s most innovative companies makes an action unlikely until a new antitrust section chief is confirmed.
“The lack of having someone really in charge day-to-day at the antitrust division makes the decision even more difficult,” Wildfang says. “These are cases that are very fact-intensive, and they represent big judgment calls about whether the government is going to step in and intervene in the private economy.”