It’s not every day that the federal government and states as varied as Tennessee and New York find themselves on the same side of a legal dispute, but these were joined by New Jersey, Virginia, Colorado, California, Rhode Island and Connecticut yesterday in filing suit against Google parent company Alphabet for antitrust violations including unlawful means of crowding out competition. If successful, the lawsuit could force the company to break up its ad business.
Google has responded with the same tired arguments about how enforcing the 1890 Sherman Antitrust Act will harm consumers and raise prices, almost unchanged from the lamentations of oil and railroad barons of old, whose sinister warnings of the heavy hand of government stifling innovation and killing off industries never came to pass.
Instead, fair and regulated competition propelled the U.S. economy to the world’s forefront throughout the 20th century. The need for robust oversight has only gotten sharper as the timetables for market dominance have gotten faster. Google went from an idea tossed around by two Stanford grad students to one of the most valuable companies on Earth, representing the lion’s share of all online ads, in fewer than two decades.
That was accomplished by gobbling up companies in every part of the online advertising business, taking control of everything from ad sales to the tools to display those ads. In essence, Google has made it such that any business or individual who wants to advertise online or on mobile in most sites has to go through Google at some point. John D. Rockefeller did the same with Standard Oil. And the feds then broke up Standard using the Sherman Act.
The lawsuit comes on the heels of several filed by the U.S. and several states in the last few years. Collectively, let’s hope that they not only rein in Google’s current anticompetitive practices but set a precedent and a tone for a new era in U.S. antitrust after a disastrously failed hands-off approach that has ultimately only harmed consumers and the entire economy.