Jared Willis: Antitrust actions need to bring consumers back in focus

New York, USA - September 24, 2021: Search in google panel on ipad screen close up view using pen

As Washington prepares for the transfer of power to President-elect Donald Trump’s administration, incoming regulators have an opportunity to position our tech sector to better compete globally, reversing the previous administration’s antitrust overreach.

As our foreign rivals, like China, race to compete with the United States on artificial intelligence, space travel, and beyond, an overzealous Department of Justice (DOJ) is pursuing an aggressive range of antitrust actions that threaten to undermine U.S. dominance in the global tech sector, expose proprietary data to foreign powers and, perhaps most problematically, do nothing for the consumer.

The Sherman Antitrust Act was passed in 1890 in response to growing concerns that consolidation in the oil industry was leading to consumers paying exorbitant prices for essential goods.

Sen. John Sherman, the Act’s author, would likely be appalled to know that the intended beneficiary of the Act, the consumer, would not be at the core of its use but might actually be harmed by it.

Over time, the Act has become a tool for interventionist government overreach to put the proverbial thumb on the scales of business operations. Recent trends have seen the Act used not to protect consumers but to punish successful businesses in favor of less successful competitors.

The Google search case is an excellent example of this.

President Joe Biden’s DOJ argues that Google has illegally monopolized the online search market by engaging in business practices that favor its search engine. If you look at this issue through the lens of the Sherman Act’s original intent, you have to ask, how is the consumer being harmed, and how do we prevent that harm? Taking for granted that access to information is an essential good, are consumers unable to access information? Is it more expensive than it should be for them to do so? Is Google’s domination of the search market driving the cost of other essential goods up?

Despite the glaring lack of negative consumer impact, the remedies the DOJ is pursuing further highlight the total disregard for consumer welfare. The remedies being considered include providing competitors access to search algorithms and proprietary data; breaking up parts of Google’s business by divesting assets like Chrome, Android and AI products; and limiting Google’s ability to default to their search engine in their products and contracts with other companies.

Regardless of which combination of these remedies (if any) comes to fruition, the result is the same: a weakening of Google, but more problematically, the creation of a precedent for the government to dismantle large tech corporations to the detriment of our nation’s interests and national security.

This leads to a cascade of consequences. Forcing Google to make its proprietary data available to competitors creates additional exposure points for consumers battling to control their personal data, not to mention the potential for abuse of this data by foreign actors. The consumer will be left with an artificially fractured market where data governance and ownership become more obscure and more difficult to navigate. Forced divestments reduce revenue and resources that can be used to invest in innovation and reduce incentives for tech corporations to expand offerings or pursue emerging technologies, stifling growth.

More frighteningly, these remedies and the precedent they set weaken the U.S. tech sector at a time when we can least afford it.

China has made it clear, as companies like TikTok and Temu draw scrutiny for their connections to the Chinese Communist Party and their well-documented data privacy invasions, that it is not just an economic competitor but a technological adversary.

This adversary has spent about $184 billion (as of 2023) investing in the AI space. Russia has continued to prove itself a force to be reckoned with in cyberspace, as it continues to be implicated in high-profile attacks on elections systems, energy grids, and other critical sectors across the globe.

The U.S. can’t afford to cede ground in this sector to our adversaries and let countries like Russia and China sit in the driver’s seat.

President-elect Trump should be applauded for his recent opposition to breaking up Google. The new administration should expand on this position, allow the tech industry to expand on American dominance in the space, and return to the original intent of our antitrust laws: protecting American consumers.

By rejecting the interventionist policies of the previous administration, it will do just that.

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Jared Willis is a licensed attorney and president of Catalyst Strategies.