The new trustbusting


October 21, 2020 The New York Times, Wednesday Morning

Larry Page, left, and Sergey Brin at Google headquarters in 2004.Ben Margot/Associated Press
When two Stanford University graduate students, Sergey Brin and Larry Page, founded Google in 1998, the U.S. economy looked different than it does today.

For one thing, big companies weren’t as dominant. Small businesses — those with fewer than 100 workers — still employed more Americans, combined, than companies with at least 1,000 employers: <!–more
By The New York Times | Source: U.S. Bureau of Labor Statistics
The economy was also performing better in the late 1990s than it has been lately. Back then, incomes and net worth were rising up and down the economic spectrum. In recent years, the gains have slowed or stopped for every group but the very rich.
The connection between these two trends — the rise of corporate concentration and the slowdown in living standards for most Americans — helps explain why the country may be on the cusp of a new era of trustbusting.
If it is, yesterday could represent the start of that era. The Justice Department filed a lawsuit against Google, accusing it of holding an illegal monopoly over internet search and search advertising. State officials are investigating the company as well, and both federal and state officials are also scrutinizing Facebook, Amazon and some other large companies.
The common thread in these investigations is a concern that big companies have become so powerful that they’re bad for the country. They can distort government policy through lobbyists, lawyers and campaign donations. The companies can hold down wages, because workers don’t always have good employment alternatives. And the companies often squash, or buy, any competitors that threaten their position.
Google is different from past behemoths in that it does not charge money for many of its products (like web search). But there is still reason to worry about its dominance. Its control over web search means it can charge high prices for ads, a particular problem for small businesses. It can also hurt consumers by cluttering its search results with ads, knowing users can’t easily use a rival search engine.
The Washington Post’s Geoffrey Fowler ran a clever experiment this week, comparing the quality of Google searches in 2020 and 2000. His conclusion: “Google increasingly fails us.” As Tim Wu, an antitrust expert, told me yesterday, “A secure monopoly doesn’t have to improve its product.”
Google disputes these criticisms, saying people use it “because they choose to, not because they’re forced to.” Pierre Lemieux, an economist, has previously argued that antitrust action against Google is unnecessary because internet dominance is often temporary.
Whatever the outcome of the case, it will most likely take years to play out, The Times’s Shira Ovide writes. And no single case will change the direction of the U.S. economy. But a larger campaign against monopolization could. Although increasing corporate concentration is hardly the only reason so many families are struggling, it does seem to be an important one.
It’s also the rare area of economic policy with some bipartisan agreement, Sarah Miller, an antitrust advocate who runs the American Economic Liberties Project, notes. The Trump administration brought the Google case, with encouragement from both Democrats and Republicans in Congress.
How often, as Recode’s Peter Kafka asks, do Attorney General William Barr and Senator Elizabeth Warren agree on anything?
For more:
“The Google suit may prove to be the opening salvo in a war between Washington and Silicon Valley,” Eric Levitz writes in New York magazine.The Times’s Brian Chen explains Google’s far-reaching role in your life.Steve Lohr — who covered the similar case against Microsoft in the 1990s — offers a simple breakdown of this case.

By Giovanni Russonello




Where things stand

The Justice Department filed a sweeping antitrust lawsuit against Google yesterday, accusing the company of illegally maintaining a monopoly on search traffic and search advertising in the government’s boldest challenge to Big Tech in a generation.

Eleven Republican state attorneys general signed on to support the federal lawsuit yesterday, and seven more states — including New York — may soon file a separate lawsuit against Google, Letitia James, New York’s attorney general, announced yesterday. She said that if those states moved forward with their suit against Google, they would join up with the feds.

Google objected to the Justice Department’s suit, calling it “deeply flawed.” But consumer advocates were joined by lawmakers in both parties in hailing the move.

David Cicilline, a Democratic congressman and the chairman of the House Judiciary antitrust subcommittee, wrote in a tweet yesterday: “This step is long overdue. It is time to restore competition online.”
THE LATEST NEWS
THE VIRUS
A Covid-19 test being performed in Green Bay, Wisc.Gabriela Bhaskar/Reuters
The U.S. is averaging 59,000 new coronavirus cases a day, the most since the beginning of August.Researchers in London plan to infect volunteers with the virus, then test vaccine candidates on them next year.With infections surging at the University of Michigan, local health officials ordered students to shelter in place for two weeks. “It’s basically a concession that the ill-conceived reopening plan didn’t work,” Nicholas Bagley, a Michigan Law professor tweeted.A recent surge of cases in Alaska offers a cautionary tale of pandemic life in cold weather.Nearly 300,000 more Americans have died this year than in a typical year. The official coronavirus death count is 220,000.Mitch McConnell, the Senate majority leader, advised the White House not to strike a stimulus deal with Democrats before Election Day. He cited the deal’s cost and the Senate’s need to conduct a Supreme Court confirmation quickly.
THE 2020 CAMPAIGN
President Trump urged Barr, the attorney general, to investigate Joe Biden’s family, citing allegations of corruption for which there is no evidence.Florida started in-person voting and broke records. The number of ballots cast — including by mail — already exceeds 30 percent of the state’s final 2016 tally.Could Biden win in a landslide? Yes, he could, and some Democrats are dreaming about it.Daily polling diary: Georgia has two separate Senate races this year (because of a retirement), and both are extremely close, a new Times/Siena College poll shows. One reason Republicans are hanging in: They’re winning about 20 percent of Georgia’s nonwhite voters.
OTHER BIG STORIES
Security forces in Nigeria shot at people protesting against police brutality. Witnesses said they saw some protesters die.The Danish police recaptured the man who killed the journalist Kim Wall on a submarine in 2017, after he briefly escaped from prison.Elliott Broidy, a former top fund-raiser for Trump, admitted to accepting millions of dollars from a fugitive Malaysian businessman to lobby the White House in his favor.The fiancée of the slain journalist Jamal Khashoggi is suing Crown Prince Mohammed bin Salman of Saudi Arabia, to uncover more information. U.S. officials have said the prince ordered the 2018 murder.The latest from The Times’s investigation into Trump’s taxes: The president has a Chinese bank account he failed to disclose publicly.
The Wrangler feedyard in Tulia, Texas.George Steinmetz for The New York Times
A Morning read: The U.S. is home to 95 million cattle, all belching out planet-warming methane. Scientists are hoping that changes to the animals’ diets could help slow climate change.
Lives Lived: With hits like “Gimme Some Lovin’” and “I’m a Man,” the British rocker Spencer Davis led one of the most successful bands of the 1960s. Davis has died at 81.
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