There’s a debate playing out in the corridors of power in Washington today about how far antitrust laws can be taken as a tool for remaking our economy. Until recently, Democrats and Republicans alike viewed antitrust as a matter of law enforcement: If you break the law, you pay a price.
But a new group of antitrust progressives has a grander vision. They see antitrust as a framework for designing preferred economic outcomes.
In their view, government should be in the business of picking winners and losers, and—in the name of fairness—clipping the wings of firms that achieve a certain level of commercial success. We’re now seeing these ideas put into action through the Justice Department’s antitrust lawsuit against Google, among other recent high-profile challenges.
Tim Wu, a Columbia University law professor and former economic adviser to President Joe Biden, is a leading player in this progressive antitrust movement. He recently wrote in the New York Times that the judge presiding over the government’s antitrust case against Google should order “a breakup of the company” by forcing Google “to sell off its Chrome browser.” In Wu’s view, the ongoing Google trial presents an opportunity to “rewrite our future.”
A vocal proponent of the concept that “big is bad,” Wu views big tech companies as a threat to democracy. He and others who share this mindset—including Lina Khan, chair of the Federal Trade Commission—have an extremely broad concept of the role of antitrust law in the US, a view that leans heavily in the direction of government intervention.
Just as progressive tax policies redistribute wealth, progressive antitrust policies are meant to reallocate economic power, on the theory that some markets simply can’t be left to develop on their own. As antitrust progressives see it, antitrust law provides a means for rebalancing economic power, creating more equity between haves and have-nots.
For highly successful companies like Google, this means a day of reckoning may come when the government steps in to clamp down on what is seen as a controlling monopolist, paving the way for other competitors to capture a larger market position.
Wu has defended this interventionist approach to antitrust law as a “distinctively American form of industrial policy.” But this approach is more akin to the type of centralized planning associated with the former Soviet Union and other failed economic experiments of the past.
What antitrust progressives often choose to gloss over is that US antitrust law doesn’t prohibit monopolies. And the reason our laws don’t prohibit monopolies is to incentivize companies and investors to shoot for the stars.
If you succeed in building a better product that draws large volumes of business your way, you’re entitled to reap the benefits—until another business or technology comes along to supplant you.
Our antitrust laws do prohibit anticompetitive conduct by monopolists. This is where the rule of law comes in. As much as progressives might prefer otherwise, the government can’t simply decide by fiat that a company has become too powerful and must be reined in. The government has the burden of proof.
Those prosecuting the Google case need to demonstrate that the company holds a monopoly market position, and that it achieved or maintained that position through unlawful behavior, not mere competition on the merits.
Wu boldly calls for Google to be broken up but seems more interested in what good could potentially come from that, versus whether the company in fact did anything truly anticompetitive. Google paying for the right to have its search engine set as the default on certain online platforms could just as easily be characterized as a wise business move.
Even if the court determined that Google’s past business practices crossed the often-elusive line between vigorous competition and anticompetitive behavior, this alone would hardly justify breaking up the company.
True, there are instances in which courts in the US have ordered companies to sell off assets as a remedy for antitrust violation. But each case stands on its own facts. What a court may have done to address another fact pattern in a different industry 40 years ago isn’t particularly relevant.
Google today faces new competition that poses a potentially existential threat to its current business and has spent billions of dollars on research to design innovative new products it hopes will position the company for continued success amid a variety of competitive threats.
These aren’t the actions of an unrestrained monopolist; they’re reflective of the reality that, no matter what success it has enjoyed in the past, Google’s current market strength could be eroded quickly if the market decides that someone else has a better technology.
We don’t need the government, through an antitrust lawsuit, to rewrite our future. There’s no threat to democracy here. People like you and me will get to decide if Google stays on top or yields its market position to a new competitor with the right solution for the times. That’s the American way.
This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.
Author Information
M. Sean Royall is global head of King & Spalding’s antitrust and consumer protection practice and was deputy director of the FTC Bureau of Competition from 2001-2003. King & Spalding represents Google on other matters and is not involved in the FTC case at trial.
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