Photo illustration by John Lyman

Tech

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The DOJ Does Not Respect Consumer Choice

The Department of Justice (DOJ) is out of control, and it’s hurting the future of American innovation. Recent lawsuits against tech companies alleging violations of antitrust law under the Sherman Act claim to protect consumers but instead punish businesses for being successful. If the DOJ continues to go after tech products that the majority of Americans prefer to use, companies will soon believe that winning at trial is more important than winning customers.

The lawsuits against Google and Apple are designed to de-emphasize consumer welfare in questions of antitrust violations. Instead, regulators want to make company bigness an economic crime and use government overreach to address social problems. At first glance, this may sound like protecting competition in the market. In practice, however, using the government to protect less successful market competitors rather than consumer choice creates uncertainty, stifles innovation, and slows economic growth.

The DOJ’s case against Google is a prime example of how this lawfare sidelines consumer interests. In August, a court sided with the DOJ ruling that Google violated antitrust law by maintaining its supposed monopoly of the online search engine market. In the filing, the DOJ alleged that the company illegally blocks competitors from distribution channels by entering into agreements with phone and browser makers to make Google the default search engine. However, Google maintains that people use their search engine simply because it is the best. After all, users are free to change their default settings to use alternative search engines whenever they please.

So what does this mean for the 87.96% of users in the United States currently using Google search? At least for now, uncertainty while the court decides what remedies to impose. If the court follows the lead of the European Union, where Google was also deemed a monopolist, the remedy could be a hefty $2.6 billion fine and the mandated implementation of a default search engine choice screen.

Despite these measures, Google remains the most preferred choice among users and remains dominant in the EU, making up 91.22% of the search engine market. However, one thing is certain: Heavy administrative oversight over the online search engine market will cost tech companies time and money as they navigate legal complexities rather than their customers’ dynamic needs and interests.

The court’s ruling on the Google case comes as a DOJ lawsuit against Apple, filed in March of this year, is just ramping up. In the newest installment of antitrust litigation, the DOJ alleges that Apple maintains a monopoly in the smartphone market by illegally blocking third-party features and functionality. Unlike claims brought against Apple in the European Union that only focus on Apple’s App Store policies, the DOJ targets Apple smartphone’s iOS, iMessage, App Store, and payment and wearables, encompassing a large swath of Apple’s business. This ecosystem totaled $200 billion in revenue for Apple in 2023.

If the court rules in the DOJ’s favor, Apple may be forced to open its software to allow more competition. However, doing so would risk Apple’s enhanced security system, enjoyed across 2.2 billion devices worldwide. In the meantime, Apple must focus on winning at trial and divert valuable resources otherwise used to decode market signals and drive innovation. In response to the lawsuit, Apple stated that the lawsuit “threatens who we are” and will distract the company from serving its customers.

The distractions won’t end with the court case if Apple loses. As pointed out by Alden Abbot, the former general counsel of the Federal Trade Commission, even the DOJ’s own proposed remedies “would be virtually impossible to administer by a court.”

Advocates of the DOJ’s approach to antitrust litigation claim that these efforts are intended to keep outsized power from the hands of a few. However, ignoring consumer welfare and punishing successful businesses by artificially propping up competitors through government action will have the opposite effect. Legal action and complicated remedies shift decision-making authority away from the companies that are beholden to the consumer to government officials who are removed from market accountability. Ultimately, the DOJ’s current approach will devalue the power of customer choice.

Simply put, the DOJ isn’t looking out for consumer welfare. If it were, it would respect that consumers have chosen big tech companies for one simple reason: they’re simply the best.