Stoller on DOJ’s lawsuit against Google: It’s a narrow case, but ‘it’s massive’

On Tuesday, the U.S. Department of Justice and 11 U.S. states filed a new antitrust lawsuit against Google, targeting the tech company’s dominance in its Google Search and search advertising businesses. Matt Stoller, from the American Economic Liberties Project, joins The Final Round to discuss the latest on the DOJ’s new lawsuit and what it means for the tech giant.

Video Transcript

JEN ROGERS: OK, onto something we're going to be talking about for, I'm going to say 10 years. But we'll have to see what he thinks. This big news out of the DOJ, the Justice Department suing Google for antitrust violations [INAUDIBLE] DOJ. We've got 11 US states filing an antitrust lawsuit against Google. They are accused of engaging in anti-competitive behavior in search and search advertising businesses.

I want to bring in Matt Stoller right now. He is an author. He's covered this anti-competitive and monopoly behavior extensively for his book, "Goliath." He also has a blog where he writes about all of these issues. And he is the research director at the American Economic Liberties Project.

So, Matt, the news comes out this morning, and I want to know, I guess, what your first reaction was to the timing of it. Because I'd read a blog post where you wrote, I want Barr to bring a big case and to succeed at it. But a lot of that has to do with having a case that's ready. Does this seem too early to you in terms of the timing? Are you worried about it at all?

MATT STOLLER: No, I read the complaint. It's a solid complaint. It's well argued. It's good framing. I mean, it's narrow, so it's only handling how they distribute search, not the behavior they're engaging in with search. They also don't touch things like ad tech or YouTube or other parts of the business. But it's a solid complaint. I'm not worried that it's too early.

JEN ROGERS: What about the fact that it comes from Bill Barr's Justice Department, that the states that we have signing on with Republican governors? Why is that important to pay attention to right now?

MATT STOLLER: Well, I mean, I think-- so I'm a Democrat. And, you know, I'm not just saying that I'm a Democrat so that I can agree with a Republican. I actually am a Democrat. And Democrats don't trust Bill Barr. I mean, they didn't know if Bill Barr was going to release this complaint and say, see, you know, even Democrats agree that Google is mean to conservatives. So that's why they didn't sign on.

But it's a good complaint. There's nothing-- there's no nonsense about anti-conservative bias. It's purely about contractual arrangements for distributing search and Google's control of Chrome and Android. It's stuff that's been litigated around the world.

But, you know, Democrats aren't going to sign on to a case two weeks before an election that might help Donald Trump get re-elected. So that's really what's going on here. But I guess the Democrats' state attorney generals around the country, they're going to bring their own cases, and it'll all probably be consolidated into one at some point.

DAN ROBERTS: Matt, Dan Roberts here. I'm glad you clarified how narrow this is because I think that some of the hubbub and fear here and all the headlines has sort of lost sight of that. They just say, wow, here it is finally, this big salvo. It's an antitrust case against Google. Oh, wow. Still going to be very significant, obviously, but important that we just focus on the fact that for now, it's just about search.

And what's interesting is that the complaint mentions Apple and coming as the default search engine on Apple products. And in that way, it kind of brings Apple into the conversation. And of course, you know, there's also been an antitrust conversation around Apple and Apple zone App Store.

And then separately, but related, we've got the antitrust conversation that has gone on for years on end about Amazon. And in many ways, when all these have come up, we've had some healthy skepticism about whether anything would actually come of it. And I think you still might see a lot of skepticism that Google needs to be worried about this.

I mean, the stock is up right now, Alphabet stock. So I guess I'd ask you whether you think that, you know, there's really any reason to think this will be the one that does it, or might this be yet another kind of red herring, even though it looks like the most serious step? I mean, if you're Alphabet, do you think Alphabet is actually legitimately concerned here?

MATT STOLLER: Well, I mean, look, when standard oil was broken up, the stock price went up. When AT&T was broken up, you know, its stock price went up. When you had electric utilities broken up in the 1930s and '40s, typically bonded stockholders did very well. So, you know, and IBM wasn't broken up in 1982. And it didn't do particularly well in terms of share.

So we have to disentangle whether it's good for the company versus whether it's good for the executives. I mean, executives like to-- they're empire builders. So it's not good for Jeff Bezos if Amazon gets broken up. But it'd probably be worth more to shareholders if Amazon was broken up. And the same thing is going on here with Google as well.

It is a narrow case. But that said, you know, you've got a conservative Republican administration saying we're going to break up a trillion dollar company. That's a huge deal, right? Ideologically, it's a huge deal in terms of Google's business. It's a huge deal in terms of just American political economy. It's a huge deal.

So, yeah, it's a narrow case. They should broaden it. There's a lot more we're going to need to do to Google through Congress, through regulatory choices, and through other cases. But I don't want to understate this. Like, it's massive, right? It's massive.

SEANA SMITH: Matt, going off of that, I mean, is this something that's going to last for years? Are we looking at another similar scenario like we did back with Microsoft a number of years ago? And then, I know it's very, very early to tell and we're still parsing through what the possible scenarios are of this, but at this point, from what we know from your coverage of this so far, what do you think is the most likely remedy?

MATT STOLLER: I mean, I think that this isn't going to be like Microsoft. It's going to be much bigger. The politics are just very different. Because in the 1990s, nobody cared about monopoly power. It was kind of an anomaly, in some ways.

Today, you know, big tech and market power is a political question. Donald Trump tweets about it. You know, the Democrats talk about it. Like, a couple of weeks ago, the House Antitrust Subcommittee chaired by David Cicilline came out with a report saying, break all these guys up. It's in the Democratic platform of 2016 and 2020.

This is political now. So this is a big deal. And it's not going to end with just with this suit. This suit is going to go on for a while. But you're also going to see regulatory action. You're going to see legislative action. You're going to see action all over the world.

And you're going to see private rights of actions because the business world is really split over these guys. I mean, you know, this is kind of the Fortune 5, right? The big five against everyone else in the economy.

So this is a very different scenario than the 1990s. It's going to be going on for years. But ultimately, we're going to break these guys up. We're going to get control of them, and then we're going to regulate the component parts so that they're safe for democracy.

MELODY HAHM: Matt, we've talked about the political environment. We've talked about the business environment. What about the consumer? You know, kind of parsing through the whole Google complaint, notably, there's about one sentence that mentions consumer harm specifically as the reason for this antitrust suit to actually come about. Is that at all a concern? You know, from the consumer perspective, we all have been covering it as media folks.

But for folks who are on Google, dependent on Google every single day, find it a really good user experience, what's the argument to be made here? How do you really see, you know, breaking up Google potentially opening up other companies, even though Bing, Yahoo, have all existed in the past?

MATT STOLLER: Yeah, I mean, that's a-- it's a long and complicated question. But the gist is, you know, consumers-- you know, you don't know what you're missing if it doesn't exist, right? So part of what's happening is Google's quality has gone down. You know, when you google things now, you basically have to stroll down to find any organic search results. It's all ads. And the ads are disguised so that sometimes you can't even tell that they're ads.

And so, you know, if you go somewhere on Google, you know, it might take you somewhere, and you might say, OK, I've found sort of what I'm looking for. But maybe it wasn't necessarily the best result. And if you find, say, a doctor on Google and it's not the doctor with the best reviews, you know, you won't ever know that you missed out on a better doctor. You just might get subpar medical care. So the consumer harm is real. It's just the consumers won't necessarily know that they've been harmed.

And then there's all the other stuff. You know, they're killing publishers. They're killing newspapers. They're killing kind of a whole set of a whole ecosystem online. And so consumers are missing out on that as well. So, you know, that's kind of what I'd say about it.

But if we didn't have this search monopoly, I mean, there would be so much more kind of amazing innovation in the search space. I mean, collectively-- yeah, so that's kind of how I go at it.

JEN ROGERS: Hey, Matt, does it depend on who wins the election for how Google's case goes? Are there any implications?

MATT STOLLER: Yeah, there are. I think that-- well, first of all, we don't really know what Joe Biden is going to do. My sense is that Joe Biden will likely be more aggressive on this than Donald Trump was, for a lot of reasons that have to do with who Joe Biden is, what he thinks, but also about the pressure that he's going to get from Congress. And the dialogue in the Democratic Party is just totally different than it was four years ago.

But I mean, Donald Trump brought this case. So it's not like Donald Trump is necessarily Bill Barr. This isn't necessarily going to go away if Donald Trump gets re-elected because they brought this case. So it's kind of-- I think Biden is going to be stronger. I think Congress is going to get more involved.

But this is really bipartisan, and that's what makes that so odd to look at in our political moment. Because there's nothing that is bipartisan anymore. And this really is.

JEN ROGERS: Matt Stoller, great to get a chance to talk with you. You can't plug your book, but I'm just going to say, we had you on last year when it came out, "Goliath, The 100-Year War Between Monopoly Power and Democracy." A good read especially on a day like today. And of course, you also have your day job. So, you know, I guess we'll give you credit for that, too. American Economic Liberties Project Matt Stoller, thanks so much.

MATT STOLLER: Hey, thanks for having me.