By Ryan Tracy in Washington and Valentina Pop in Brussels
As U.S. officials prepare an antitrust probe of Alphabet Inc.'s
Google and possibly other Silicon Valley giants, a loose-knit crew
of its rivals is gearing up to help.
In industries from news to travel to online shopping,
competitors of Google are readying documents and data in
anticipation of meetings with the Justice Department, according to
industry representatives.
Many of these companies have long argued that Big Tech platforms
illegally abuse their market power. In recent years some of them
have found a receptive audience in Europe, where authorities have
thrice fined Google for alleged monopolistic practices. Google has
paid the fines but is challenging them in court.
Now rivals are stepping up their advocacy in the U.S., where
antitrust enforcers recently divvied up the job of examining
antitrust concerns at large tech platforms, with the Justice
Department preparing a Google probe. The Wall Street Journal
reported on the potential probes by the department and the Federal
Trade Commission earlier this month, citing people familiar with
the matter.
Antitrust lawyers say any probe could take years to complete.
Battle lines are already forming. Google is preparing its own data
and arguments, the Journal has reported. It also recently
overhauled its Washington lobbying operation with an eye toward
amplifying the message that its products promote competition and
benefit consumers.
Google has successfully navigated U.S. regulatory scrutiny of
several previous mergers. In 2012 and early 2013, it persuaded the
FTC not to pursue a possible antitrust case by agreeing to change
some business practices.
A Google spokeswoman declined to comment.
The stable of Google critics includes TripAdvisor Inc. and Yelp
Inc., which accuse the search giant of unfairly favoring its own
content.
Oracle Corp., which has a long-pending copyright case against
Google, has briefed European antitrust regulators about Google's
use of data to target ads and was part of a successful coalition of
plaintiffs against Google's alleged anticompetitive behavior in its
Android operating system for smartphones, which led to a record
fine issued by the European Commission last year, of EUR4.3
billion.
News Corp, which owns The Wall Street Journal, and other
publishers say Google and other tech platforms siphon ad revenue
away from content creators.
All these companies say they would welcome further antitrust
scrutiny. They and others are expected to seek out Justice
Department officials as they prepare a Google probe, according to
industry executives and antitrust lawyers.
Still more firms haven't criticized Google publicly, but
privately stand ready to provide information to U.S. authorities
about practices they view as potentially anticompetitive, according
to industry representatives.
"There is a lot more concern that you hear behind closed doors,"
said Jason Kint, chief executive of Digital Content Next, a trade
association for online publishers that has argued online tech
platforms are harming competition and consumers.
"Cautious and quiet optimism," is how Mr. Kint described his
members' mood upon hearing the news of the potential Justice
Department probe.
Private testimony was key in the FTC's previous probe of Google,
when competitors such as Microsoft Corp. provided regulators
information on Google's business practices, according to an
internal FTC report from 2012. A Microsoft spokeswoman said the
firm hasn't filed a formal antitrust complaint with U.S. regulators
and declined to comment further.
Last month a veteran of the online advertising industry -- which
Google leads, but where rivals don't typically criticize it
publicly -- told the Senate Judiciary Committee that policy makers
should consider breaking up tech giants.
"We need to assume that internet giants, like any other big
companies, will use their assets to maximize profit and strategic
value," said Brian O'Kelley, former chief executive of AppNexus, an
advertising technology firm bought by AT&T Inc. last year after
what he says was an unsuccessful attempt to compete with "the
Google Super-monopoly."
"Either break up the internet giants or force them to treat
their component parts at arm's-length," he said.
In addition to information gathered from U.S. companies, federal
authorities can gather evidence from abroad. During the 2012 FTC
probe, U.S. and European investigators shared documents and
"updated one another on theories and evidence" during regular
phones calls, according to the internal FTC report. EU antitrust
officials say they are willing to cooperate again with their U.S.
counterparts once they open the probe.
Regulatory agencies generally need a company's permission before
sharing private business data with another regulator, but companies
typically grant that permission so as not to antagonize
investigators, experts said.
To some extent, antitrust probes are more straightforward in
Europe than in the U.S. because the European Commission, the
antitrust enforcer, has the power to launch an investigation and to
decide on the fines and the remedies that the company must comply
with. The company can then appeal in EU courts, but the
reputational damage is done and it takes years for the courts to
rule on the appeals.
In the U.S., the Justice Department would have to bring the
lawsuit in a federal-district court. "In that sense it is more
difficult," said Thomas Vinje, a partner at Clifford Chance who
represented Oracle and other companies in their complaint against
Google's alleged abuse of dominance in the smartphone operating
system.
Despite having succeeded in getting a record fine against Google
last year, Mr. Vinje says the commission moved too slowly for the
decision to matter and that Google's anticompetitive behavior
persists. "Unless you move quickly and impose serious and effective
remedies, it's a waste of time," Mr. Vinje said.
Write to Ryan Tracy at ryan.tracy@wsj.com and Valentina Pop at
valentina.pop@wsj.com
(END) Dow Jones Newswires
June 24, 2019 05:44 ET (09:44 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
Alphabet (NASDAQ:GOOG)
Historical Stock Chart
From Apr 2024 to May 2024
Alphabet (NASDAQ:GOOG)
Historical Stock Chart
From May 2023 to May 2024