>> DOES GOOGLE HAVE TOO MUCH POWER?

>>> THE GOVERNMENT THINKS SO.

A HIGH-STAKES LEGAL BATTLE IS TAKING PLACE RIGHT NOW BETWEEN THE U.S. AND THE TECH GIANT.

COLUMBIA LAW PROFESSOR TIM WU MAKES THIS ALL DOWN WITH US NOW.

>> THANK YOU FOR JOINING US.

LAST WEEK THIS WAS A PRETTY BIG CASE THAT KICKED OFF THE UNITED STATES VERSUS GOOGLE.

ANTITRUST ISSUES SOMETHING YOU'RE AN EXPERT ON.

COULD YOU BREAK THIS DOWN FOR THE AUDIENCE, WHAT'S AT THE CENTER OF THIS CASE?

>> THE CENTER OF THIS CASE , A CASE AGAINST GOOGLE.

THE FIRST BIG INTEREST CASE OVER THE LAST 20 YEARS FROM A NOVELIZATION CLAIMS.

AT THE CORE IS THE ARGUMENT THAT GOOGLE HAS BEEN MAINTAINING ITS MONOPOLY OVER A GENERAL SEARCH OF USING A NUMBER OF AGREEMENTS AND TECHNIQUES.

>> WHAT ARE THOSE AGREEMENTS OR TECHNIQUES THAT THEY HAD BEEN DOING THAT SCREAM ANTITRUST?

>> THE CORE OF THE CASE WOULD REVOLVE AROUND THE IDEA THAT GOOGLE HAS BEEN SPENDING ITS MONEY TO ESCAPE COMPETITION.

CLEARLY THROUGH AN AGREEMENT TO SPEND $10 BILLION WITH APPLE TO GET THEM $10 BILLION OR MORE PER YEAR.

THIS IS IN ORDER TO MAKE GOOGLE ALLEGING TO KEEP APPLE OUT OF THE SEARCH.

SO WITHOUT THESE PAYOUTS THERE'S OTHER PAYOUTS LIKE THE SAMSUNG PAYOUTS .

OTHER ANDROID PHONE COMPANIES.

NOW THESE PAYOFFS GOOGLE FACES SEVERELY MORE COMPETITION AND THEY'VE BEEN BUYING THEIR WAY OUT OF COMPETITION.

>> OLD ENOUGH TO REMEMBER ON THE LAST ANTITRUST CASE AGAINST MICROSOFT.

WE HAD INTERNET EXPLORER THAT WAS BUNDLED INTO THE WINDOWS OPERATING SYSTEM WHICH SEEMED TO BE THIS SORT OF UNFAIR PRACTICE.

THIS ON THE OTHER HAND, WHAT IS THE CRIME AND HAVING WHAT GOOGLE WOULD CALL PARTNERSHIPS WITH COMPANIES LIKE APPLE AND SAYING, YOU KNOW WHAT I'M GETTING MONEY , THIS IS JUST A DEAL BETWEEN THESE TWO COMPANIES?

>> IN SOME CASES IT'S A LITTLE LIKE MICROSOFT HE WAS WORRIED ABOUT LOSING A MONOPOLY OVER THE OPERATING SYSTEMS.

USING THE STICK AND THREATENED ANYONE WHO DEALT WITH THE LANDSCAPE NAVIGATOR.

ALL THE INTERMEDIARIES WITH THE LOSS OF ITS OPERATING SYSTEM.

GOOGLE HAS BEEN USING THE CARROT.

THE ARGUMENT THE JUSTICE DEPARTMENT MAKES IS THAT THEY WERE WORRIED ABOUT THE CUP EDITION.

THEY WERE WORRIED ABOUT PARTICULARLY, ANOTHER SEARCH ENGINE SHOWING UP ON MOBILE .

BECOMING A HEAVILY USED SEARCH ENGINE.

WORRIED ABOUT APPLE GOING INTO SEARCH ENGINE.

THEY DECIDED THEY WOULD SPEND MONEY TO AVOID THAT.

I THINK OF THE ANTITRUST LAWS CITING YOU HAVE TO STAND YOUR GROUND AND FIGHT, PARTICULARLY IF YOU'RE A MONOPOLIST THERE'S DIFFERENT RULES FOR THE DOMINANT COUNTRIES COMPARED TO LOCAL BAKERIES OR SOMETHING THAT COULD MAKE A DEAL WITH THE LOCAL CROISSANT MAKER OR THE LOCAL BREADMAKER.

MICROSOFT AND GOOGLE ARE IN A DIFFERENT CATEGORY OF COMPANY AND ARE NOT SUPPOSED TO BE ALLOWED TO SPEND MONEY TO GET AWAY FROM COMPETITION.

>> SO ONE OF THE THINGS PEOPLE WILL WONDER IS IS THIS BAD FOR CONSUMERS?

AM I USING AN INFERIOR PRODUCT ARE BEING FORCED TO DO SOMETHING THAT OTHERWISE I WOULD NOT WANT TO DO?

>> THE DO NOT DOUBT THAT THEY CAME TO MARKET WITH A GREAT PRODUCT THAT PEOPLE HAPPEN TO LOVE BUT SPENDING MONEY TO STAY THERE HAS BEEN THE PROBLEM.

IMAGINE THERE WAS AN APPLE SEARCH FOR EXAMPLE.

A LOT OF PEOPLE LIKE APPLE PHONES, A LOT OF STUFF.

MAYBE APPLE SEARCH COULD BE PRIVACY PROTECTED.

PEOPLE LIKE GOOGLE BUT THEY DON'T LIKE THE FACT THAT THEY SPY ON YOU ALL THE TIME SO WHY ISN'T THERE MORE PRIVACY PROTECTION ALTERNATIVES?

THAT'S THE KIND OF THING THAT THE JUSTICE DEPARTMENT IS SAYING.

>> ONE OF THE DEFENSES GOOGLE HAS MADE FOR QUITE SOME TIME , WITH COMPETITION THERE IS COMPETITION A CLICK AWAY.

IT DOESN'T COST THE CONSUMER TO CHANGE THE DEFAULT SEARCH IF THAT'S WHAT THEY WOULD WANT TO DO OR USE A BROWSER TO GOES GO TO OTHER SERVERS.

WE COULDN'T POSSIBLY BE ANTICOMPETITIVE BECAUSE WE AREN'T CONSTRAINING THE ABILITY OF CONSUMERS TO USE COMPETITIVE PRODUCTS.

>> THIS IS A GOOD POINT.

IN FACT ONE THAT GOOGLE HAS BEEN USING AS THE OFFENSE OF THIS TRIAL.

THE JUSTICE DEPARTMENT'S RESPONSE HAS BEEN PUT ON THE STAND A NUMBER OF BEHAVIORAL ECONOMISTS MAKING THE POINT THAT GOOGLE UNDERSTOOD HOW IMPORTANT THE DEFAULT WAS.

WHEN A PRODUCT IS SHIPPED WITH A SEARCH ENGINE IT NEVER CHANGES WHETHER IT'S GOOD OR BAD MAYBE THEY'D LIKE SOMETHING MORE PRIVACY PROTECTED.

THEY DIDN'T REALLY BOTHER TO CHANGE IT.

GOOGLE KNEW THIS AND THEY WERE BATTLING FOR DEFAULTS.

IF A SEARCH WAS ONE CLICK AWAY WHY WOULD THEY SPEND MILLIONS OF DOLLARS TO MAKE SURE PEOPLE HAVE THIS INSTALLED AS THE DEFAULT?

MAKING SURE THAT OTHER COMPANIES DIDN'T GO TO THE MARKET?

THAT IS THE RESPONSE .

I WON'T SAY THAT IT HAS NO APPEAL BUT THE HUMAN PSYCHOLOGY SUGGESTS FRANKLY WHEN WE ARE LOCKED INTO SOMETHING WE DON'T WANT TO SWITCH.

>> THERE IS A QUESTION THAT THE JUDGE WILL HAVE TO CONSIDER OF INTENT , DID THEY KNOW WHAT THEY WERE DOING.

I KNOW THIS HAS ONLY BEEN IN THE FIRST WEEK BUT A TRIAL THAT COULD TAKE MONTHS.

ARE THERE ANY SMOKING GUNS, EMAILS OR IS THERE SOMETHING WITHIN GOOGLE WHICH WOULD SHOW THAT THEY KNEW THAT THIS IS WHAT THEY WERE CARRYING OUT?

>> I THINK THAT'S WHAT HAS BEEN EFFECTIVE ABOUT THE JUSTICE DEPARTMENT'S PRESENTATION.

GOOGLE HAS A GREAT IMAGE AND AT THE FROM THE COMPANY.

A NICE COLORFUL LOGO.

IT HAS AN INSPIRING STORY, A GARAGE STARTUP .

BUT WHAT THE JUSTICE DEPARTMENT'S CASES SHOWING IS THERE IS A DIFFERENT GOOGLE THAT'S CALCULATING, A LOT OF EMAILS WHICH RECOGNIZE THEY HAVE CONCERNS ABOUT APPLE NATURALLY.

WORRIED THAT THEY WANT TO SPEND THIS MONEY TO TRY TO MAKE SURE THEY DON'T FACE SERIOUS COMPETITIVE FORCES SO I THINK WHAT YOU WOULD SEE AND WOULD EMERGE FROM THIS TRIAL IS A MUCH MORE CALCULATING GOOGLE AS GOOGLE KNOWS WHAT IT'S DOING IT WHAT IT WANTS TO DO.

IT'S BEEN IN SOME WAYS PLANNING ON MAINTAINING DOMINANCE ALL ALONG.

>> I WONDER IF THIS CASE WOULD BE DIFFERENT IF IT WAS , SAY STARTING A YEAR AGO.

WHY I SAY THIS IS BEFORE THE RISE OF THESE OPEN AI OR LARGE LANGUAGE MODELS USING ARTIFICIAL INTELLIGENCE.

GOOGLE HAS THEIR OWN.

MICROSOFT PARTNERING WITH THE BIG ONE NAMED OPEN AI.

I WONDER IF THIS IS NOT A SIGNIFICANT ENOUGH THREAT FOR THE EXISTING SEARCH BUSINESS WHERE GOOGLE COULD SAY LOOK, LOOK AT ALL THESE PEOPLE USING THESE AI TOOLS.

THEY AREN'T COMING TO GOOGLE OR WE ARE TRYING TO REMAIN COMPETITIVE, WE ARE THE UNDERDOG ALMOST HERE.

>> I THINK THAT THIS IS AN IMPORTANT POINT.

AI HAS BECOME SIGNIFICANT.

IT SEEMS LIKE SOMETHING, NO ONE KNOWS EXACTLY WHAT IS ON THE HORIZON.

IN MY VIEW IT MAKES THE CASE MORE IMPORTANT.

WE HAVE AN OPPORTUNITY HERE FOR TECHNOLOGICAL SUCCESSION AND IF THERE'S ANYTHING HISTORY SUGGESTS IS THAT COMPANIES TRY TO PREVENT THE NEXT THING FROM COMING ALONG AND REPLACING THEM.

THERE IS SOME CHANCE THIS WILL HAPPEN NATURALLY.

I THINK WE ARE IN A BETTER WORLD WHERE GOOGLE IS FORCED TO FIGHT FAIR.

THE STRATEGY OF USING DEFAULTS , SPENDING TENS OF BILLIONS OF DOLLARS TO MAKE SURE YOUR PRODUCT IS IN FRONT OF EVERYONE AND NOT OTHER PEOPLE'S, THIS IS MORE IMPORTANT.

IMPORTANT SCRUTINY WITH MERGERS.

YOU DON'T WANT GOOGLE TO BUY OUT ITS GREATEST AND MOST DANGEROUS COMPETITORS .

NOW WOULD BE THE TIME IN FACT FOR ENHANCED SCRUTINY.

ONE OF THE IMPORTANT THINGS ABOUT MICROSOFT , THE TRIAL IN THIS HAPPENED AT A TIME WHEN MICROSOFT WAS FACING THE INCREDIBLE COMPETITIVE PRESSURE.

IT CREATED A LOT OF ROOM FOR COMPANIES LIKE GOOGLE TO EMERGE.

MICROSOFT WAS HANDCUFFED , THEY WERE UNDER CONSENT TO CREATE AND HAD BEEN BEATEN OUT BY THE JUSTICE DEPARTMENT FOR FIVE YEARS.

I THINK IN THESE MOMENTS OF TECHNOLOGICAL SUCCESSION THAT IT'S IMPORTANT THAT COMPANIES FEEL PRESSURE FROM THE GOVERNMENT TO FIGHT FAIRLY.

THAT'S WHY I THINK THAT THE TIMING ACTUALLY OF THE AI MAKES THIS MORE IMPORTANT THAT WE HAVE A CASE LIKE THIS NOW.

>> WHAT DOES THE GOVERNMENT HAVE TO PROVE TO THE JUDGE?

THIS IS A BENCH TRIAL, THERE'S NOT A JURY HERE'S WHAT THEY HAVE TO SAY?

THIS IS THE CASE OPEN AND SHUT.

WHAT DOES THE JUDGE HAVE TO UNDERSTAND?

>> THEY HAVE TO UNDERSTAND TWO THINGS.

FIRST THAT GOOGLE HAD THE MONOPOLY OVER THE GENERAL SEARCH WHICH I THINK THEY SHOULD BE ABLE TO PROVE.

SECOND, TO PROVE THAT GOOGLE USED ITS MONOPOLY ITS POSITION.

USED ITS ECONOMIC POWER TO MAINTAIN A POSITION.

THAT IS THE MORE CHALLENGING QUESTION.

THERE IS A LARGE DECLARATION AS TO WHAT THIS MEANS TO EFFECTIVELY FIGHT UNFAIR VERSUS FIGHT FAIR.

AS HE SAID GOOGLE WOULD SAY WE MADE A GOOD PRODUCT AND PEOPLE LIKED IT.

THE CORE OF THE JUSTICE DEPARTMENT'S CASE WOULD BE YOU HAD A MONOPOLY AND MAINTAIN YOUR MONOPOLY BY MAKING DEALS TO KEEP COMPETITORS OUT.

I THINK THE STRONGEST ARGUMENT IN THIS SORT OF ON THE STREET ARGUMENT IS THE IDEA THAT THEY PAID APPLE IN PARTICULAR TO STAY OUT AND NOT DEVELOP ITSELF THE SEARCH .

THEY WERE HANDLING SEARCH TRAFFIC AND GOOGLE SAID LISTEN IF YOU WANT THIS MONEY THEN YOU NEED TO STAY OUT SO I THINK THAT DOESN'T SOUND LIKE FAIR COMPETITION TO ME.

WHAT HAVE THEY SAID SO FAR.

WHAT HAVE THEY HAD TO SAY?

>> STRAIGHTFORWARD, PEOPLE LIKE OUR PRODUCT BECAUSE WE HAVE A BETTER PRODUCT GIVEN THE CHOICE OVER AND OVER WE HAVE SEEN THAT PEOPLE CHOOSE GOOGLE OVER BEING OR OTHERS.

IT'S OUR SO-CALLED POWER THAT'S RELATIVE.

I THINK THAT'S THE CORE OF THE ARGUMENT.

>> WHAT ARE THE REMEDIES THAT THE JUDGE COULD HAND DOWN?

LET'S SAY THE GOVERNMENT MAKES ITS CASE APPROVING THESE TWO THINGS WHAT COULD THE JUDGE, WHAT KIND OF POWER DOES THIS JUDGE HAVE?

>> THE JUDGE HAS THE POWER AND EQUITY, TRADITIONALLY, TO GO AS FAR AS TO BREAK GOOGLE OUT .

OR CAUSE IT TO DIVEST PARTS OF GOOGLE.

IT COULD BE ASKED TO DO BEST TO THE CHROME BROWSER, SELLING ITS OPERATING SYSTEM, STRONG REMEDIES, A MINI BREAK UP.

AT A LESSER DEGREE AND INTENSITY THEY COULD ASK THAT GOOGLE STOPPED DOING DEALS LIKE THIS.

PUTTING IT IN SOME WAYS UNDER PAROLE.

TRADITIONALLY OR AT LEAST WITH OTHER CASES, THE JUSTICE OR THE JUDGES HAVE ORDERED COMPANIES TO REMAIN OUT OF CERTAIN BUSINESSES BUT IT WOULD BE WEIRD TO ORDER GOOGLE TO STAY OUT OF AI SEARCH OR SOMETHING BUT THINGS LIKE THAT HAD BEEN DONE.

AT&T WAS ORDERED TO REMAIN OUT OF COMPUTING IN THE 1950s WHICH HAD AN ENORMOUS CONSEQUENCES FOR COMPUTING OBVIOUSLY.

THERE'S A LARGE RANGE.

A COURT OF EQUITY.

IF THE JUSTICE DEPARTMENT WINS I THINK THAT THIS WOULD BE A INTERESTING AND HARD QUESTION TO FIGURE OUT WHAT THE WALL RIGHT REMEDY IS.

>> TALKING ABOUT ANTITRUST CASES GOING TO THE AT&T DAYS IN THE 80s, WHAT WAS THE CONSEQUENCE OF BREAKING UP A BIG COMPANY LIKE THIS?

WHAT WERE THINGS THAT THE CONSUMERS FELT?

THE THINGS THAT BUSINESSES FELT, HOW DID THE ECOSYSTEM OR THE LANDSCAPE CHANGE IF GOOGLE IS TO BE BROKEN UP OR MICROSOFT OR ANYBODY ELSE IN THE TECH SPACE , WHAT DO WE KNOW FROM HISTORY THAT HAPPENS?

>> THIS IS A GOOD QUESTION.

WE HAD BEEN DOWN THIS ROAD BEFORE.

FRANKLY BEGINNING IN THE 50s.

THE INITIAL ANTITRUST CASES AGAINST IBM AT& T, A COMPANY CALLED RCA.

IN THE 70s AND 80s IBM, AT&T AGAIN LEADING TO THAT AT&T BREAKUP, THE 90s, WITH MICROSOFT.

WE ARE IN A CURRENT GENERATION NOT JUST GOOGLE BUT A SIGNIFICANT CASE AGAINST FACEBOOK, SEEKING A BREAKUP.

ANOTHER GOOGLE ADVERTISING CASE.

WITH A REPEAT OF SOMETHING THAT HAPPENED EVERY 20 OR 30 YEARS OR SO.

I WOULD SAY LOOKING AT HISTORY THE SHORT TERM CONSEQUENCE HAS BEEN CHAOS AS WELL AS UNCERTAINTY.

THE LONG TERM CONSEQUENCE IS ALMOST ALWAYS A BIG JUMP TECHNOLOGICAL DEVELOPMENT AND THE BIRTH OF COMPANIES AND INDUSTRIES.

IT STIRS THE POT.

MONOPOLIES HAVE POSITIVE FEATURES.

THEY ARE VERY FAMILIAR.

OFTEN THEY HAVE STRONG RESEARCH LABORATORIES BUT THEY HAVE A TENDENCY UNSURPRISINGLY TOWARD STAGNATION WHERE THE USUALLY HAVE EXISTING BUSINESS MODELS THAT THEY DON'T WANT TO CANNIBALIZE.

YOU TAKE GOOGLE RIGHT NOW, ONE OF ITS CHALLENGES WITH AI IS THAT THIS CHALLENGE IS ITS ADVERTISING MODEL AT THE CORE OF GOOGLE.

SOMETHING EMERGING THAT SOMEHOW ISN'T QUITE THE MODEL FOR THEM.

IT'S VERY DANGEROUS.

AT&T WAS ALWAYS CONCERNED ABOUT THE RISE OF AN INTERNET OR WHAT LATER WOULD BECOME KNOWN AS THE INTERNET THAT THEY COULDN'T CONTROL.

BUSINESSES THAT WERE ON TOP OF THE PHONE LINES.

AT&T WANTED EVERYTHING TO BE OPERATED BY AT&T.

THAT WAS THEIR WAY OF DOING BUSINESS.

IF YOU'RE OLD ENOUGH TO REMEMBER AT& T IN ITS GLORY DAYS IT CONTROLLED EVERYTHING.

THE PHONES WERE SOLD BY AT&T, WESTERN ELECTRIC.

THE LONG-DISTANCE SERVICES WERE AT&T.

LOCAL SERVICE.

EVERYTHING HAD TO BE AT&T.

BUSINESS SERVICES.

LONG STORY SHORT, THIS MAKES A LOT OF ROOM FOR OTHER COMPANIES.

THEY'VE JUMPSTARTED SOME OF THE MOST IMPORTANT COMPUTER REVOLUTIONS.

ANTITRUST BREAKUPS AND ANTITRUST ATTACKS INCLUDING SOFTWARE INDUSTRIES, THE INTERNET INDUSTRIES.

THE AMERICAN ECONOMY WOULD LOOK THE WAY THAT IT DOES WITHOUT SOME OF THE ANTITRUST CASES WE HAVE HAD.

IT'S BEEN OBVIOUSLY TOO EARLY TO SAY WHETHER THE CURRENT ATTACK ON BIG TECH WOULD HAVE SIMILAR EFFECTS BUT IF HISTORY IS ANY GUIDE RELAXING THE GRIP OF THE MONOPOLIST USUALLY IS A GOOD DIRECTION.

>> GIVEN THE AMOUNT OF MONEY THAT LARGE TECH COMPANIES ARE ABLE TO SPEND LOBBYING THE LEGISLATIVE BRANCH CERTAINLY , IT HAS BEEN REALLY DIFFICULT TO TRY TO GET WHAT MIGHT THE COMMONSENSE MEASURES ABOUT PRIVACY OR ANTITRUST FURTHER DOWN THE ROAD.

EVEN WHEN THERE'S SOME BIPARTISAN AGREEMENT ON THIS.

IS THERE ACTUAL POSSIBILITIES HERE ABOUT WHAT THE JUDGE COULD DECIDE ON GOOGLE?

WHAT THEY COULD DO WHAT CONGRESS DOESN'T SEEM TO BE ABLE TO?

I GUESS I WOULD SAY YES AND NO.

I AGREE WITH YOUR SENTIMENTS.

PASSING WHAT SEEMED LIKE OBVIOUS CASES OF LEGISLATION.

WHO WOULD THINK THAT CONGRESS, ANYONE IN CONGRESS WOULD BE OPPOSED TO BETTER PRIVACY?

WE COULDN'T GET THIS DONE UNTIL EARLIER THIS YEAR.

WE JUST COULD NOT GET THINGS THROUGH CONGRESS.

SO YOU ARE RIGHT ABOUT THAT.

IN THE UNITED STATES WE HAVE COURTS AS WELL AS CONGRESS, A JUSTICE DEPARTMENT, INDEPENDENT PROSECUTION.

I THINK THIS IS ENDING UP BEING IMPORTANT.

THE INFLUENCE OF LARGE COMPANIES OVER LEGISLATION IS WELL-DOCUMENTED AND IT MAKES CERTAIN THINGS ALMOST IMPOSSIBLE.

I WOULD SAY THAT THE JUSTICE DEPARTMENT IN THE COURTS ARE LESS .

YOU COULD HIRE GOOD LAWYERS.

YOU COULD TRY TO INFLUENCE THEM BUT THERE'S THIS CERTAIN LEVEL OF INDEPENDENCE.

THEY'VE ALWAYS HAD THIS LEVEL OF INDEPENDENCE.

THEY HAD A TRADITION OF TAKING AT THE ANTITRUST DIVISION AND JUSTICE AND I THINK THIS IS IMPORTANT FOR THE AMERICAN DEMOCRACY.