U.S. v. Google: Inside the Biggest Tech Antitrust Trial in Decades

CHRISTIANE AMANPOUR, CHIEF INTERNATIONAL ANCHOR: And we turn now to the world of big tech. In a landmark case in the United States, a federal judge has found Google guilty of U.S. antitrust violations. It’s a staggering defeat for the tech company that could upend decades of dominance and potentially reshape how millions of Americans get their information online. The Assistant Attorney General Jonathan Kanter joins Walter Isaacson to discuss the verdict and what comes next.

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WALTER ISAACSON, CO-HOST, AMANPOUR AND CO.: Thank you, Christiane. And Jonathan Kanter, welcome back to the show.

JONATHAN KANTER, ASSISTANT ATTORNEY GENERAL, ANTITRUST DIVISION: It’s wonderful to be here.

ISAACSON: You had a really big victory in your Department of Justice antitrust case against Google. It’s the biggest antitrust case in at least 20 years. And the judge ruled this past week that Google is a monopolist, and it has acted as one to maintain its monopoly. But let me read you something else that the judge said. He said, it has hired thousands of highly skilled engineers, innovated consistently, and made shrewd business decisions. The result is the industry’s highest quality search engine. So, what’s the problem here? It got a monopoly by being the best. What are you going after him for?

KANTER: We want companies not just to attain power by being the best, but we want them to try to compete and maintain their position by trying to be the best, not engaging in contracts or monopolistic behavior that prevents them and insulates them from competitive pressure. Ultimately, we believe that all companies, whether they’re big or small, do better and deliver more for the public when they have other companies, competitors nipping at the heels. It’s the fundamental basis for our market system in order to have a market unique competitors. And so, we want competition driving companies like Google and all other companies to do better and to deliver more.

ISAACSON: So, what did it do that was anti-competitive?

KANTER: The court decision explains a whole range of conduct, but generally, it falls into the category of paying partners to make Google the exclusive default or the exclusionary default, meaning that rather than saying, use us because we’re the best, we’re going to go to our partners and we’re going to pay, in some instances, tens of billions of dollars a year to keep them from working with rivals.

ISAACSON: It’s sort of like what Standard Oil did a hundred years ago in that great antitrust case was try to prevent competitors, even though it gave a very good and less expensive product.

KANTER: Yes, history has a tendency to rhyme. And so, if you look at the issues that came up in our case here against Google, they resemble many of the same issues that were present in Standard Oil, and many of the same issues that were present in U.S. v. Microsoft. And so, ultimately, the monopoly playbook is one that repeats itself over and over again, and it’s important for us to enforce the antitrust laws when we see that playbook come to fruition.

ISAACSON: You talk about U.S. v. Microsoft about 20 years ago. In preparing for this, I talked to Joel Klein, who had your position back then and brought that case. And he said one of the major things was that Microsoft at the time, because that was — they were going after, was leveraging its monopoly in one field, meaning operating desktop system, to get dominance in other fields. Is that relevant to this case?

KANTER: Well, the Microsoft decision was cited throughout the court’s opinion in U.S. v. Google. And that was the last major — frankly, the last monopolization case of the United States Department of Justice brought for filing U.S. v. Google. So, these cases do not come along very often. They’re very resource intensive, and they’re historic. And so, the legal principles that were established in Microsoft, of course, we’re highly relevant to this case. Many of the same characteristics that were present in U.S. v. Microsoft were also present U.S. v. Google. In particular, the importance of network effects or feedback effects. The idea in U.S. v. Microsoft was, do the antitrust laws apply to the technology industry? The PC computer industry? And the answer to that question was unequivocally yes. Same kinds of questions came up in U.S. v. Google, do the antitrust laws and can they apply in a world of the internet, a world where products and services are given to consumers for free in exchange for advertising? The answer once again was unequivocally yes. The court found that the antitrust laws not only do apply, but that Google engaged in conduct to break the antitrust laws.

ISAACSON: Ever since the Sherman Antitrust Act and the Clayton Act more than a century ago, there have been two prongs to antitrust theory. One is harmed to consumers. Do you raise — does the consumers get harmed because they have to pay more because it’s a monopoly? But the second is something like harm to competition, even if a product is free, like Google search is free, and for that matter, Microsoft bundled a browser for free, it doesn’t directly harm consumers, but it harms competition. Why should that be part of antitrust law?

KANTER: That’s the basis of antitrust law. Antitrust law exists to protect the competitive process because we believe that competition, rivalry in our economy encourages people to do better, encourages people to deliver more, it encourages lower prices, more innovation, greater output. But it’s also important to the diversity of views and ideas when we get our information, especially on the internet, we want to have a range of sources of information so that we can be a well-informed electorate and citizenry. And so, this is a really important part of why we have antitrust laws in the first place. And you’re absolutely right. US v. Microsoft did not focus on higher prices. It focused on harm to the competitive process because that impeded innovation, it impeded market forces from delivering benefits and results to the broader economy. It’s exactly what we had here in the U.S. v. Google. The one exception, though, is we do have a very important part of the U.S. v. Google case that focuses on price, it’s advertising. And so, one of the key markets had issue in U.S. v. Google was text-based advertising, which you get people buy on search. And these are not just high-priced advertisers. Virtually, every company, whether it’s a virtual storefront or the corner store in your local area buy search ads, and they buy them in large volumes. And when the price of ads go up, the prices of the products being advertised go up. So, this is an issue that not just affects the internet highway, it affects our main streets as well.

ISAACSON: You talk about how this paves the way for innovation, this type of decision, by making sure that there’s a lot of competition. When I talk to my Tulane students and they all want to start businesses, I often say, OK. but what would happen if Google decided to go into that business and crush you? And that is why we sometimes don’t have a whole lot of startups. Can you explain specifically why this would pave the way for innovation?

KANTER: Yes, there’s a term of art called kill zones. And so, if you talk to venture capitalists, they’ll tell you that if you’re in a kill zone, meaning that the business that you’re going to go into can be elbowed out by a large monopolist, you’re better off just not investing in that business in the first place. That is not helpful to our economy and our economic growth. And so, what we want is we want the best ideas, the best innovations, the best products and services to compete on the merits.

ISAACSON: Kent Walker, who’s Google’s president of global affairs, said of this decision, he said, the decision recognizes that Google offers the best search engine, but concludes that we shouldn’t be allowed to make it easily available. Is it possible that this case will end up with us getting worse search on the internet?

KANTER: I believe the words of the court, which is the decision stands for the principle that Google is a monopolist and behaves like one in order to maintain its monopoly competition, whether it’s competition among small companies or competition against a very large company yields better outcomes for everyone. And that’s the principle of the antitrust law. That’s the principle embedded in the court’s decision. And we’re thrilled that the court agreed with our arguments and we look forward to taking this to the next phase.

ISAACSON: And last week’s verdict, which Google says it’s going to appeal, the judge hasn’t yet ruled and you haven’t yet presented on what the remedy should be. What is the realm of what those remedies could be?

KANTER: It’s important that we respect the process. And so, with respect to this particular case, I can’t comment on what we might request or suggest to the court. There’s a proceeding that will — the process that will take place. It’ll start in September, and we look forward to engaging with the court. Generally speaking, outside of this case, there are — there’s a rich body of law that explains what we should think about in the context of remedies, and U.S. v. Microsoft is a good example, where, in that case, the court both at the district court level and at an appeals level said that remedies should be forward-looking in nature in the context of an antitrust case involving technology. And so, making sure that the remedies are meaningful, making sure that the remedies reflect the violation, which, in this case, is monopolization and deals with the monopoly, and making sure that remedies reflect the market as it exists today on as it will exist in the foreseeable future are important principles to keep in mind in any case.

ISAACSON: You talked about how this case involved, not just harm to consumers, but harm to the whole competitive process, and that both those things are important and antitrust law. But let’s go back in history, about 40 or 50 years ago there was a major shift, Chicago school, Justice Scalia, many others saying, let’s just focus on price. If it doesn’t harm consumers, no harm, no foul. Is this been a shift to recently with you and Lina Khan and others to get it back into balance with both of those things considered?

KANTER: The shift has been to bring it back into balance with the law. The fact is the law has always been quite clear, and it was recently reaffirmed by the United States Supreme Court that antitrust doesn’t just apply to people who buy things, it can apply to people who offer their labor in the context of college athletes and then a case involving the NCAA, the Supreme Court explained that antitrust violations geared at people who work are no different than antitrust violations geared at people who buy. The antitrust laws have maintained these principles. In fact, we blocked a transaction involving book publishers on the basis that authors would be deprived of competition for advances for professional original works of authorship. And so, these are really important principles. Antitrust ultimately focuses on competition. There have been a number of red herrings that put in place about price. Let me be very clear about this. Price matters. Antitrust cares a lot about the welfare of consumers. It cares a lot about making sure that competition can deliver the best lowest prices to consumers. And that’s something we bring a lot of our cases to focus on and we care about deeply. It’s just not the only value that is embodied in the antitrust laws.

ISAACSON: We live in a really polarized partisan age and almost any issue immediately, there’s a split. But what surprises me or in some ways pleases me on this one is this is a case that was originally brought by Bill Barr, President Trump’s attorney general. People like J. D. Vance have praised you and Lina Khan for doing this. Why is this not become a partisan issue? And to what extent is there some ideological divide here on antitrust enforcement?

KANTER: Because I think it — this is an issue that resonates with the broader public. People want to make sure that they have the benefits of a competitive economy because a competitive economy results in greater opportunity, whether it’s a farmer who cares about return on investment for their cattle or somebody who cares about getting affordable access to health care or lower prices at the checkout line of your grocery store, and everything in between people want opportunity, they want economic freedom and they want choice. And whether it’s a conservative or someone on the other side of the political continuum, they don’t want any one company or any one ideology telling them what to think, see, or hear. And I think these are important principles. And it’s one of the reasons why they have generated so much support across the political continuum. But ultimately, the values of the antitrust laws are about rule of law. The antitrust laws were written by Congress, enacted in 1890, updated many times since then with the Clayton Act and a number of others. And our job is to enforce the law as we find it, based on the facts, based on the law as we find it. And so, if we stay focused on making sure that we are engaging in law enforcement and doing it for the right reasons when the facts support it, I think we’re going to find widespread support, and that’s exactly what we’ve encountered.

ISAACSON: In a recent interview with The Financial Times, you talked about A.I., artificial intelligence, and said, we have to look at what are the monopoly choke points for A.I. What does that mean?

KANTER: That means that in any industry, especially an industry involving technology and feedback effects that has a transformative impact on our society, it’s important to make sure that we’re preserving competitive process, and we’re doing so in real-time. And so, when people talk about A.I., it’s no different than when they talk about the internet or they talk about computers, they’re using very general terms for an industry that has lots of different components. And so, when you think about A.I., it’s not a single technology, it’s a constellation of technologies from chips and hardware, to software layers, to applications, to genetics (ph), to all sorts of use cases and scenarios. It relies on data. You have general data, but you also might have industry specific data. You might have healthcare-based A.I. or certain types of enterprise-based A.I. It’s important to make sure that we understand those distinctions, the importance of all those different variations and ensure that each one of them, each market within the broader umbrella of A.I. has the opportunity to be competitive so that innovators can innovate.

ISAACSON: Well, wait, let me pick on data, because that’s the one you use. I mean, should Google have to share its data? Should Apple have to share the data on the phones?

KANTER: Well, these are important questions, right? And so, I think there are a lot of broader questions, especially around privacy and ownership, whether data is a public good. But the reality and in this technology driven markets, especially markets that have machine learning is that data is the oil. It’s the oil that makes these businesses run. They learn by doing on large amounts of data, not just large in terms of what we might consider, you know, a big book or a library. We’re talking about the likes — of volumes of data likes of which we can’t even imagine running through servers placed across the world. And so, if data is critically important, then it is a fact that we have to understand to determine how the competitive market functions. And so, if you need access to massive amounts of data to compete, that is a market reality. I’m not saying that it necessitates that companies have to share, should or should not share data, I’m simply saying it’s a market reality that we have to recognize when understanding how competition works.

ISAACSON: You talk about how sometimes the most meaningful intervention is one that happens in real-time. You just said, we have to do this right away. You know, if you would let — why not just let the market play out for a while? In fact, Google probably could have lost its dominance in search by the advent of A.I. Isn’t it better to let things settle out before we just barrel in?

KANTER: I think one of the lessons that we’ve learned is that in technology markets that have massive network effects, markets can tip. And when they tip, it becomes exponentially more challenging for rivals to compete because of the scale, because to the data that’s necessary. And so, what we want to do is we want to make sure that if it’s necessary, and the facts in the law support it, that a little bit of intervention early on will hopefully eliminate the need for massive intervention or regulation later on. We want the competitive market ultimately to be the regulator. We want competition. We want companies fighting it out to deliver better and more to encourage and deliver more benefits to entire society. If we have monopolies, then we lose those benefits of competition. And then, often we are faced with either regulation or in this case, against Google or and others, a backward-looking remedy that tries to address 15 years of anti-competitive behavior. It’s much harder to do than it is to eliminate a few small impediments in real time. So, I think what we’ve learned is that when it’s mandated and it’s appropriate under the facts and the law, that a little bit of intervention early on can hopefully save us from unnecessarily invasive regulation or intervention later on.

ISAACSON: Jonathan Kanter, thank you so much for joining us again.

KANTER: Thank you. Pleasure to be with you.