Earlier this year, in one of the most absurd court rulings in modern times, federal judge Amit Mehta ruled that Google violated U.S. antitrust law by gaining a monopoly in the search engine markets.
In the days or weeks ahead, the courts will decide whether to break up one of America’s most iconic companies or to sell off some of its activities and products. The latest reports are that the courts may require Google to sell off its popular Chrome browser. (To whom? China?) It may also require Google to surrender other products to help erase its market lead.
With a market cap of roughly $2 trillion, Google is one of the five most profitable companies in the world. It got there by offering a search engine service FOR FREE to hundreds of millions of customers. This may be the largest benefit to consumers of any company in world history.
Yet the courts ruled that: “Google is a monopolist, and it has acted as one to maintain its monopoly.” It was found guilty of violating Section 2 of the Sherman Act. Yet the Sherman Act was meant to protect against companies that use their size and scope to RAISE prices. Google’s sin is that it produces superior products at prices that are TOO LOW. One statistic was cited as evidence of monopoly behavior: Back in 2009, Google controlled 80% of the search engine market, and today it is closer to 90%.
What was remarkable and dangerous about this decision is that the courts openly conceded that Google gained this dominant market share by making the best search engine and that it is made easily available to almost all consumers at very low costs.
How weird is this? Keeping prices low and relentlessly improving product performance is illegal because it is unfair to a company’s competitors? This is doubly absurd given that we have the Biden administration accusing companies like grocery stores of RAISING their prices. So in America today, if you raise your prices, you are a greedy profiteer, and if you lower your prices, you’re a monopolist that has to pay restitution to your less efficient competitors.
The argument for breaking up Google gets even more nonsensical when you listen to the Biden administration’s cockeyed excuses for punishing Google. The Department of Justice’s chief antitrust officer says: “This landmark decision … paves the path for innovation for generations to come and protects access to information for all Americans.”
This is a preposterous statement. Few if any companies spend more money on product innovation and refinement than Google does. And as far as “protecting access to information for all Americans,” no company in history has opened up more access to information than Google. No other company even comes close. It has brought the equivalent of the entire Library of Congress to the fingertips of everyone with a laptop computer in a matter of a few seconds. That’s not an antitrust violation. It is a miracle of innovation that deserves our deepest appreciation.
Even worse, this lawsuit piggybacks off the hostile actions by America’s European and Chinese tech rivals, whose inferior search engines can’t compete with Google. As recourse, they want to loot tens of millions of American shareholders who invest in Google. Instead of defending an American company against foreign raiders, we have the U.S. Justice Department and federal courts giving aid to those hostile lawsuits and bolstering their legitimacy.
Can anyone imagine for a moment that a German or a Japanese or a Chinese court would be stupid enough to rule against their own domestic company that has come to dominate a globally strategic industry and has created tens of thousands of high-paying jobs for its citizens while making hundreds of billions of dollars for its own citizen shareholders? Only in America.
Many conservatives moan that Google has developed algorithms that discriminate against viewpoints and studies that have a right-leaning perspective. That’s definitely a problem, but there are many other search engines available, like Bing and DuckDuckGo, that consumers can use as alternatives to Google. We certainly don’t want the government or politicians like Sens. Bernie Sanders or Elizabeth Warren regulating what can and can’t be accessed on a private search engine platform. Even worse would be handing more business over to Chinese browsers that will clearly serve up misinformation.
Several years ago, a landmark study by economists Erik Brynjolfsson of Stanford University and Avinash Collis of Carnegie Mellon University estimated that the median U.S. user values search engines at $17,500 per year. Today, that number is easily more than $20,000 of value added for the average person with a laptop computer or a smartphone — which is nearly all of us.
This is the very definition of a gift horse to nearly all Americans. And our own government and its throng of lawyers with goofy legal theories are risking killing it.
Stephen Moore is a visiting fellow at the Heritage Foundation. He is also an economic advisor to the Trump campaign. His new book, coauthored with Arthur Laffer, is “The Trump Economic Miracle.”
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This is the most important sentence in the entire article: “That’s definitely a problem, but there are many other search engines available, like Bing and DuckDuckGo, that consumers can use as alternatives to Google.”
The author just listed the 3 major players that comprise 99.99 percent of the search market, with Google controlling 97.5 percent of that total today. There are two or three other really small, niche players in the search space, but they together don’t constitute anything more than a rounding error in the scheme of things. I personally use DuckDuckGo, as it is the only one of the top three that doesn’t track and record everything you type into the search bar, so it cuts down on endless third-party ads for junk I don’t need, and I don’t feed the government data gathering machine as much.
As to the likelihood of getting Google broken up at this point, the chance of that is effectively ZERO. It’s a multi-trillion-dollar international corporation, with a global reach and the financial resources to play in the courts for decades if necessary to prevail. So, Steven Moore is writing about a potential breakup that will never happen. He should understand all this already. Nice filler piece though.
We’ve been living the greatest American catastrophe for four years now I think life without Google is a cake walk in comparison
Breaking up Google would be smart since they promote Communism and only support democrats narratives. Google like the CDC, FDA, FBI, Fake News, etc., can’t be trusted. Google promotes Censorship violating our 1st Amendment Rights unless of course you’re a democrat then you don’t get Censored.
Sorry, Stephen, horribly wrong on this. It is impossible to avoid Google, therefore it is a problem. Google is a complete and total sellout to China and therefore is a threat to the United States.
Google needs to sell off yahoo.
It needs to sell of youtube.
It needs to sell off Android.
Very disappointed in Stephen Moore. Have you ever heard of Brave? Browser and search engine?
Google has got to be diminished. Would it were because people, like Stephen, wised up and stopped using Google, and all of its myriad even Legion subsidiaries.
Great article!! Rather than tear down this company how about the government address the issues under the free speech area that is looked at as a problem with google!!??We are a capitalist country?? The best thrive and those don’t improve or fall by the wayside!!????????