It’s a familiar legal argument: a dominant technology company has abused its market power to bully industry partners, protect its monopoly and stymie competition.
The Justice Department’s case against Internet search giant Google has unmistakable echoes of the landmark federal lawsuit against Microsoft a quarter-century ago. As was the case with Microsoft then, Google is accused of using its overwhelming market power to unfairly alienate potential customers from competitors.
The lawsuit against Google refers to the Microsoft case and the tactics used by that company in the 1990s, when it was accused of trying to stifle competition in the early days of Internet browsers. “Google is using the same playbook,” the government declares, by illegally using its power to search the Internet, just as Microsoft did with its personal computer operating system, Windows.
Back then, if you wanted to connect to the Internet, you probably did so through a Windows computer. About 90 percent of personal computers use Microsoft Windows software, and Microsoft controls the programs and services that appear on the screens of Windows computers.
But Microsoft was also called out in a different way during opening statements on Tuesday.
Google’s lead courtroom attorney, John E. Schmidtlin, to focus the judge’s attention on Microsoft – another tech giant, rather than on Google’s smaller competitors in the search market, such as DuckDuckGo.
Schmidtlin said that Microsoft’s Bing search engine lags behind Google in market share not because of improper methods followed by Google, but because it is a lower-quality product.
“Microsoft has failed to invest, and it has failed to innovate,” compared to Google, he said.
Bing, DuckDuckGo and Yahoo aren’t Google’s only competitors, Schmidtlin said. He name-checked Wayfair, Walmart, Amazon, and Overstock for shopping, TripAdvisor, Booking.com, Hotels.com, Expedia for travel, Doordash, Grubhub, UberEats, and Yelp for food delivery.
Although the legal theory advanced by the Department of Justice against Google mirrors the theory used in the Microsoft case, that was a different era. When Microsoft’s experiment began, it was the high tide of the early Internet euphoria. E-commerce was just beginning, and every industry wanted to jump on the digital bandwagon. The first BlackBerry, essentially an email device, was introduced in 1999. The iPhone, which ushered in the smartphone era, didn’t arrive until 2007.
The Microsoft case eventually ended in settlement. The resulting consent decree prevented the company from enforcing restrictive contracts, freed computer makers to download and highlight other companies’ software, and forced Microsoft to disclose more technical information.
The main beneficiary of the more open environment was a start-up Internet search company called Google, with new technology and a new business model later on. It was founded in September 1998, one month before the Microsoft experiment began.
“Infuriatingly humble alcohol fanatic. Unapologetic beer practitioner. Analyst.”