Mike Lee, Google, and a Curious Antitrust Flip-Flop

COMMENTARY
Mike Lee, Google, and a Curious Antitrust Flip-Flop
AP Photo/Pablo Martinez Monsivais
Mike Lee, Google, and a Curious Antitrust Flip-Flop
AP Photo/Pablo Martinez Monsivais
X
Story Stream
recent articles

On his Aug. 20 Fox News show, Tucker Carlson detailed how Senate antitrust subcommittee Chairman Mike Lee transformed from one of Google’s harshest critics into one of its most loyal defenders faster than you can say “Monopoly!” From 2011 to 2015, Lee pressed the Federal Trade Commission to pursue antitrust violations against Google for its Internet search dominance, grilled its CEO, Eric Schmidt, for the company’s abuses, and supported the European Union’s investigation into the search-engine giant. After the FTC slapped Google on the wrist, he said he would investigate the Obama White House’s improper interference with the investigation. 

Now, Lee has done a complete 180. As a possible explanation for the flip-flop, Carlson pointed to investments in Utah by Google and Facebook along with Google’s fundraising for Lee.  The two-term senator declined an invitation to discuss the issue on the show, but responded with a press release claiming to refute “Left-Wing Attacks on Mike Lee.” Carlson’s segment relied heavily on a report by the Google Transparency Project, an initiative of the generally left-of-center watchdog group Campaign for Accountability. Whatever the funders’ politics, GTP has gone after Google’s ties to Hillary Clinton and Barack Obama, as well as its funding of the anti-Trump “Resistance,” so it does not strike me as partisan. And regardless, I’m far more concerned with the substance of the arguments rather than guilt-by-association attacks on the messenger. 

Moreover, Lee’s substantive attempt to defend his flip-flopping is even less persuasive than his ad hominem arguments. His press release argues that “from the very beginning we see that Sen. Lee’s approach to antitrust issues has always been guided by consumer welfare, particularly specific anti-competitive behavior that leads to increased prices for consumers.”   While Carlson did not mention the consumer welfare standard at all, GTP’s report noted that Lee’s hearing on the consumer welfare standard was stacked with Google-funded experts. 

Both Lee and Google paint critics as opposing the “consumer welfare” standard, the classical economic term often used to measure antitrust injury.  They therefore insinuate that Google critics want to ignore economics in antitrust cases and instead use subjective criteria. The Google-funded witnesses at Lee’s hearing largely echoed these talking points. 

It is true that many academics (myself included) want antitrust law to consider how monopolies affect democracy, small businesses, privacy, and free speech. However, this does not reflect a rejection of the consumer welfare standard or any of antitrust law’s traditional economic tools — which no sane person would.   On the other hand, economics also indicates that market power can often inflict harm beyond the narrow definitions of consumer welfare.  Policymakers should be open to this possibility. 

As a further (and false) example of Google supporters tarring all criticism as rejection of the consumer welfare standard, Lee’s office goes on to claim that his opposition to the European Commission’s record fine against Google was based on its lack of reliance on the consumer welfare standard: “Condemning a foreign government for pursuing antitrust goals different than those pursued by US antitrust agencies’ [consumer welfare standard] in no way shows Sen. Lee changed his mind about anything.” 

Yet, contra this assertion, the European Commission based its decision explicitly on the consumer welfare standard. Its ruling concluded: “Google's conduct has the potential to foreclose competing comparison shopping services, which may lead to higher fees for merchants, higher prices for consumers, and less innovation.” It also ruled that Google failed to “provide arguments or evidence to show that the likely efficiencies brought about by the conduct outweigh any likely negative effects on competition and consumer welfare in the affected markets.” 

Indeed, in 2011 Lee grilled Schmidt for manipulating its search results in comparison shopping -- the exact practice at issue in the EU’s ruling. As Lee said at the hearing, “[W]hether you call this a separate algorithm or whether you have reverse-engineered one algorithm ... either way, you’ve – you’ve cooked it.” No one could possibly watch this exchange without concluding that Lee thought this practice violated antitrust laws under the consumer welfare standard. 

The consumer welfare standard is just that — a standard by which judges and antitrust enforcers determine whether a company’s conduct violates antitrust law. Lee unequivocally believed this standard was sufficient in 2011 to scrutinize Google’s growing dominance, saying, “Google’s unique presence as an Internet gatekeeper raises serious concerns about activities that may limit competition, reduce consumer choice, and thwart innovation.” 

But he has certainly flip-flopped on how the consumer welfare standard applies to Google now — and that change cannot be attributed to any decrease in Google market share or power.  In 2011, most estimates for its search market share were around 65%. Due to the rise of mobile searches, as well as the FTC’s inaction, Google’s share has increased dramatically to over 90% today. 

I won’t speculate as to what prompts Lee’s newfound love for Google, but he cannot deny that his stance has changed. As the chairman of the most important Senate subcommittee for Big Tech, he has an obligation to voters to acknowledge his current positions and explain how he got there. 

Adam Candeub is law professor and director of the Intellectual Property, Information & Communications Law Program at Michigan State University College of Law. He previously served at the Federal Communications Commission.



Comment
Show comments Hide Comments