The Justice Department has argued in a federal antitrust lawsuit that Google is a dominant tech company that abused its market power to bully industry partners, protect its monopoly and stifle competition.
It has a familiar ring to it. As US et al. v. Google is going to trial this week, with clear echoes of the landmark federal lawsuit against Microsoft a quarter-century ago. In the Google case, as with Microsoft at the time, the tech giant is accused of using its tremendous market power to unfairly cut competitors out of potential customers.
But On the eve of Google testIt seems inconceivable that this case could attract as widespread attention as Microsoft’s proceedings. Microsoft Was a Unique Tech Titan in the Late 1990s And its leader, Bill Gates, was a national icon.
The Microsoft trial, which began in October 1998, lasted more than eight months with 76 days of testimony. Every major news organization covered it. New York Times reported On daily proceedings.
It was a test that often dealt with neurological concepts such as “network effects” and “switching costs”. Nevertheless, the Times gave it the kind of daily coverage usually reserved for very few courtroom dramas over the years, such as oj simpson trial And this Lindbergh kidnapping case,
For several days, spin sessions took place on the steps of the courthouse. Microsoft representatives would say that the government has presented isolated passages of text out of context, which is certainly not evidence of anti-competitive conduct. The Justice Department and attorneys for the states involved in the lawsuit will mostly say that the damning testimony speaks for itself.
Microsoft was found by a federal judge to have repeatedly violated the country’s antitrust laws. An appeals court upheld most of that decision but cast doubt on the government’s preferred remedy – breaking up the company.
In its lawsuit against Google, the Justice Department points to the Microsoft case and that company’s tactics in the 1990s. The government declared, “Google deploys the same playbook that Microsoft did with its personal computer operating system, Windows, by illegally using its power in online search.
But Kent Walker, Google’s president of global affairs, Said there are big differences between the Microsoft of the dot-com boom and the Google of today. At the time, Mr. Walker was deputy general counsel of Netscape, the commercial leader of Internet browsing software, which was a key target of Microsoft’s campaign to reduce competition.
Nearly 90 percent of personal computers used Microsoft’s Windows software, which was the main gateway to the young Internet, and Microsoft controlled the software and services displayed on those Windows PC screens.
Google, on the other hand, will have to work with and pay partners who make smartphones, browsers and other devices, Mr. Walker said. He said the deal with companies like Apple and Samsung to make Google the default search engine on their smartphones is legal and will benefit consumers, giving them the best technology and reducing costs for device makers and their customers.
“We think there are some aspects of the Microsoft case that are actually very helpful to us,” Mr. Walker said in an interview.
When Microsoft’s testing began, it was the high tide of early Internet excitement. E-commerce was just getting started, and every industry wanted to jump on the digital bandwagon. This was before mobile computing. The first BlackBerry, originally an email device, was introduced in 1999. The iPhone, which started the smartphone era, didn’t arrive until 2007. If you wanted to go online, chances are you did it through a computer running Windows.
Microsoft was rich, powerful, and ambitious. It had started to move beyond software. In 1996, it entered the media business by establishing a cable channel, MSNBC, and a website, MSNBC.com, in partnership with NBC (years later Microsoft abandoned its stake in both).
One after another, industry executives are worried about what Microsoft might do next, sharing a sentiment expressed by Rupert Murdoch, chairman of News Corp.: “Everyone in the communications business is nervous about Microsoft. Which includes me.”
Today, Google doesn’t seem as big as Microsoft once was. It is a member of the Big Tech Club. It is an undisputed giant in search and online advertising, and its software and artificial intelligence capabilities may extend to other industries. But its Big Tech counterparts – Amazon, Apple, Meta (Facebook) and even Microsoft – are all under scrutiny in the United States and abroad.
The Microsoft case also had a great personal dimension because of Mr. Gates’ stature. He was the richest man in the world, and during the trial, as the stock market boomed, Mr. Gates’s stake in Microsoft increased to $100 billion. In 1995, a researcher at the Massachusetts Institute of Technology created a website called Bill Gates Personal Wealth Clock to keep track of Mr. Gates’s net worth.
Surveys showed that Mr. Gates was widely praised as a talented entrepreneur. He was the leader of Microsoft, deeply involved in the company’s operations and especially its Internet strategy. Colleagues said he saw the government’s distrust as an attack on his life’s work.
Mr. Gates was not a witness at the trial, but Excerpts from his videotaped statement The testimony was shown. He was babbling, unresponsive, and forgetful. At one point, he did not understand the term “market share”. (The joke shortly thereafter was that “share” was a concept he did not understand.)
Later, Microsoft officials said that Mr. Gates was only following the legal advice given to narrow questions and avoiding broad or reactive answers. If so, it was bad advice. His testimony undermined his and Microsoft’s credibility with the judge.
Google’s founders, Sergey Brin and Larry Page, have little major role to play in the current matter. They are no longer deeply involved in the company. Sundar Pichai, chief executive of Alphabet, Google’s parent company, is a thoughtful, soft-spoken company man who joined Google in 2004 and rose through the ranks.
Although the legal theory advanced by the Justice Department mirrors the one used in the Microsoft case, the outcome of the trial will depend on the evidence presented to Judge Amit P. Mehta of the U.S. District Court for the District of Columbia.
The government has already suggested that its evidence will lack the express language of the Microsoft case. There’s no equivalent to “Netscape’s air supply cut” or a pile of emails filled with no-holds-barred jargon.
In the Google suit, the government cited the search company’s instructions to its employees to avoid words like “kill,” “crush” and “block” in their emails.
“Google learned one thing from Microsoft – choosing its words carefully to avoid antitrust scrutiny,” the Justice Department wrote.
William Kovacic, a law professor at George Washington University and former chairman of the Federal Trade Commission, said, for its part, the government has borrowed heavily from the Microsoft case in its lawsuit against Google because those legal principles “weigh so heavily against Microsoft.” did a good job”. ,
After the George W. Bush administration came to power, the Department of Justice and Microsoft reached an agreement, The resulting consent decree prohibited Microsoft from enforcing restrictive covenants, freed PC makers from loading and displaying other companies’ software, and forced Microsoft to disclose more technical information.
Many criticized the consent decree as toothless. Harvard Business School professor David Yoffee was initially a critic, but changed his views.
Today, Mr. Yoffee teaches a course on antitrust and technology, and it starts with the Microsoft consent decree. “There were a number of actions that were no longer possible because of the consent decree,” he said. “This limited Microsoft’s ability to go after newcomers, not at an angle, but behind those trying to compete head-to-head with Microsoft.”
The major beneficiary of the more open environment was an Internet search start-up, with new technology and, subsequently, a new business model, Mr. Yoffee said. It was called Google. It was founded in September 1998, a month before the Microsoft trial began.