Google’s big antitrust case has historic parallels in the 1911 Standard Oil decision
Google’s big antitrust case has historic parallels in the 1911 Standard Oil decision
Google’s internet search business was deemed an illegal monopoly, according to a decision in federal court on Tuesday.
The ruling rebuked Google’s practice of signing multi-billion-dollar contracts with smartphone makers Apple and Samsung. Those contracts meant those companies had to use Google as the default search engine. Google said it will appeal the decision.
The case could have major ramifications for how the government regulates tech giants in the internet era. It also has parallels with another blockbuster antitrust case more than 100 years ago, when the economy was headlined by a different set of corporate titans.
One similarity between Google and Standard Oil, the energy giant of the 20th century: ubiquity, said Rebecca Haw Allensworth, a Vanderbilt law professor.
“Both of them were very, very dominant, and a big part of all Americans’ everyday lives,” Haw Allensworth said.
Their anti-competitive playbooks have similarities too, said Laura Phillips-Sawyer, a professor of business law at the University of Georgia. Google had exclusive contracts with smartphone makers, and back in the day, “Standard Oil was being accused of using anti-competitive exclusive contracts with its distributors,” Phillips-Sawyer said.
Distributors like railroads, which were forbidden from transporting anyone else’s oil. In 1911, the courts said that’s not okay.
“Supreme Court comes down and issues one of its strongest antitrust rulings,” Phillips-Sawyer said. “They break up Standard Oil.”
And that is where parallels with Google likely end, said Spencer Waller, an antitrust researcher at Loyola University Chicago. He said forced breakups have become less common in recent decades.
So, for Google, “I expect that the Court will tell them to change various aspects of behavior,” Waller said.
Like requiring a choice screen, so when you open your phone, you select whether you want Google, Bing or something else to run your searches.
According to Waller, if he had that choice, he would “probably not” turn to Google as a preferred search engine.
Because, he said, he’s a fan of competition.
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