Punishing Google for Its Search Success

The DOJ’s meddling in internet search engines could hurt consumers and help China

WSJ editorial. 

"How badly does the Biden Administration want to punish Google? So much that the Justice Department’s antitrust cops are now asking a federal court to hobble the search giant, even though their proposals would hurt consumers and could benefit China. That’s only the start of the reasons to be skeptical of this government market meddling.

In a court filing last week, the DOJ proposed a slew of remedies for Google’s alleged antitrust violations. Federal Judge Amit Mehta ruled in August that Google had maintained an illegal search-engine monopoly by paying web browsers and device manufacturers to be featured by default, even as he acknowledged this wasn’t the primary reason for its success.

“Google has not achieved market dominance by happenstance. It has hired thousands of highly skilled engineers, innovated consistently, and made shrewd business decisions,” Judge Mehta wrote. “The result is the industry’s highest quality search engine, which has earned Google the trust of hundreds of millions of daily users.”

No matter, the government now wants to degrade Google’s search-engine quality to help less successful rivals. Start with its proposal to require Google to divest its popular Chrome browser, which by default uses the company’s web search. DOJ says Chrome lets Google collect more data on users to better target ads and refine search results. Yet if advertisers and users benefit from this product integration, what’s the antitrust problem?

DOJ also wants to ban Google from paying to be featured as the default search engine elsewhere. Forget that the judge said Apple and others chose Google primarily because it “provides the best bet for monetizing queries.” Under their agreements with Google, they get a share of revenue. Prohibiting such deals would harm device manufacturers and other browsers.

The main beneficiary would be Microsoft’s Bing search engine, which could bid less for default placement. Note that Microsoft’s market capitalization is 50% larger than Google’s. To hamper one tech giant, DOJ would bolster a competing colossus. Ditto for the government’s plan to block Google from using artificial intelligence to improve its search engine. This would give a leg up to Microsoft’s Bing AI tool, as well as OpenAI, which is developing its own search tool.

DOJ even wants Google to socialize its data. The government’s filing proposes to force Google “to provide rivals and potential rivals both user-side and ads data for a period of ten years, at no cost, on a non-discriminatory basis.” Could this include foreign competitors, such as China’s Tencent or ByteDance? Don’t worry, DOJ’s filing suggests “proper privacy safeguards.”

The state Attorneys General who have joined the lawsuit also want to make Google fund a “nationwide advertising and education program” to encourage Americans to use other search engines, including with “short-term incentive payments.” Antitrust enforcers have clearly lost the plot when they want to force a company to pay customers to use an inferior competing product.

We’re reserving judgment on a separate antitrust suit against Google’s advertising practices. But consumer welfare has been the north star of antitrust law for four decades because it prevents regulators from remaking markets to reflect their own preferences. Even if the courts sign off on the DOJ’s plan, how well it would work is an open question, given that Google owes its dominance in large part to its innovation and engineering talent, as Judge Mehta noted.

All of this is taking place as the U.S. is in a high-stakes race with China for the lead in artificial intelligence. Google is an American leader in AI investment. Antitrust policy was designed to police genuine market abuses, not punish companies for success."