Democratic and Republican administrations have brought and litigated antitrust cases involving some of the largest U.S. digital and technology companies over the last five years. These cases allege that companies engaged in strategic business practices to maintain or extend their monopolies, squeezing out competition in markets such as online search, smartphones, eCommerce, and social media. Now, the oldest of these monopolization cases, U.S. v. Google, has almost run its course.
The U.S. v. Google case spans three political administrations. The “Trump 1.0” Department of Justice (DOJ) brought the case in 2020, the Biden DOJ successfully litigated it, and the “Trump 2.0” DOJ will bring it to a conclusion. After a major win for the government in 2024, the U.S. District Court for the District of Columbia (District Court) is now considering the Biden DOJ’s proposed remedies for restoring competition in the markets for online search.
The long legal journey for U.S. v. Google and other pending monopolization cases will tell us a lot about how large antitrust cases survive changes in administrations and enforcement priorities. At the center of the remedies debate in U.S. v. Google is antitrust’s bedrock consumer welfare standard, which has been buffeted by shifting ideological winds over the last several years.
Consumers benefit from antitrust remedies that succeed in restoring competition in a market, but they also bear the burden of those that fail or have unintended consequences. The consumer welfare standard captures a wide range of possible effects from these outcomes, including less choice, lower quality, slower innovation, or higher prices. The critical consumer perspective in U.S. v. Google is the focus of this Progressive Policy Institute (PPI) report.
At the center of the remedies debate is not any single “fix” but the DOJ’s complex package of structural and conduct fixes that is designed to open up markets to competition by new search engines. The government’s approach entails a sweeping restructuring and decade of “quasi-regulation” that will have a significant impact on search markets. It will also leave an indelible imprint on complementary markets, such as internet browsing, cloud computing, applications, and devices.
PPI argues that the DOJ’s remedies proposal does not account for its impact on consumers under the full scope of the consumer welfare standard. The government’s approach recognizes the importance of consumer choice in online search markets, but only in passing. The proposal also overlooks the effect of the remedies on firms’ incentives to innovate and improve quality, both of which will directly affect consumers. Moreover, PPI’s analysis reveals that the complexity of the government’s proposed remedies in U.S. v. Google could have unintended, detrimental effects on consumers.
Antitrust history teaches us that the more complex a remedy, the higher is the risk of failure, and the greater is the potential harm to consumers. Past failed divestitures and ineffective conduct remedies support this important maxim. The DOJ’s remedies proposal raises concerns in light of this legacy, recent efforts to downplay the consumer welfare standard, and antitrust’s relative inexperience in the digital sector.
It remains that the impact of the proposed remedies on consumer welfare will be a major consideration in the District Court’s determination of whether the final decree in U.S. v. Google is in the public interest. The District Court has the unique opportunity to ensure a strong remedy that restores competition while striking a better balance to protect consumers under the consumer welfare standard. The outcome will set important precedent in other pending monopolization cases and future antitrust cases.
