Monopoly Power

Judge Amit Mehta ruled with the United States Department of Justice (DOJ), finding that Google has monopoly power in the search and advertising markets. This finding is hardly a shock. It has been an open secret for years that Google pays Apple an astronomical amount of money each year to ensure that Google search is the default in Apple's Safari browser. In 2022 alone, Apple paid Google over twenty billion dollars. While I have no qualms with the ruling, the Department of Justice is overreaching in a few of their suggested remedies.

A forced sale of the Chrome browser would do little as a remedy toward reducing Google's monopoly power and raises logistical questions about how such a deal would be structured, given that any sale hinges on finding an interested buyer. Companies that could realistically afford to purchase Chrome, such as Amazon, are facing antitrust scrutiny.

Despite their simple appearance, web browsers are incredibly complex applications that must adhere to a myriad of continually evolving web standards. These high development and maintenance costs are the reason most browsers are only one piece in a company's application portfolio – it's extremely difficult to monetize a browser directly without linking it to other services. Therefore, any company that could purchase Chrome would face the same ugly monetization incentives – such as aggressively selling user data to third parties – that we currently have.

Chrome is built from Chromium, an open-source software project created and largely maintained by Google that serves as the backbone of many popular web browsers, including Microsoft Edge. Would Google still be permitted to maintain Chromium, and if so, what is stopping Google from forking the project and creating another browser?

This remedy proposed by the DOJ fails to directly address the lack of competition in the search market. The lack of competition is rooted in the deals Google has made with other companies to keep Google search the default – and often only – search engine on many platforms.

Apple, the DOJ, and the DMA

While technology evolves at a breakneck pace, regulatory bodies designed in a bygone era of slow, incremental progress often find themselves in a perpetual game of catch-up. This dynamic is particularly evident in the United States Department of Justice’s (DOJ’s) scrutiny of Apple, a company known for its stringent control over its ecosystem. The complaint highlights five examples of “suppress[ing] technologies that would have increased competition among smartphones.” The complaint centers on accusations of the company suppressing technologies that could have increased competition in the smartphone market.

The Department of Justice cites five primary examples:

• Suppressing Third-party Super Apps: By limiting the capabilities and integration of third-party applications, Apple effectively restricts the potential for all-in-one solutions that could compete with its services.

• Blocking Cloud-streaming Apps: Apple's App Store policies have been criticized for limiting the functionality of cloud-streaming services, potentially stifling innovation and competition.

• Preventing Third-party Messaging Apps from Achieving Quality Parity with Apple Messages: This practice allegedly undermines consumer choice by disadvantaging alternative messaging platforms.

• Artificially Limiting Connectivity of Third-party Smartwatches: By doing so, Apple ensures that its own smartwatch remains the most compatible and feature-rich option for iPhone users.

• Denying Access to Third-party, Cross-platform Digital Wallets: This restriction potentially limits the financial services ecosystem available to Apple device users, keeping them within Apple's proprietary Wallet app.

These allegations suggest a strategic effort by Apple to maintain its dominance in the smartphone and related markets by hindering competitors' ability to offer viable alternatives to consumers.

A Misguided Comparison to Microsoft's Antitrust Case

The complaint also makes a controversial comparison to the 1998 antitrust case against Microsoft, implying that the ruling against Microsoft paved the way for Apple's success in the smartphone era. This oversimplification overlooks the seismic shifts in technology, particularly the advent of mobile computing and smartphones, areas where Microsoft initially lagged. Apple's rise was less about Microsoft's constraints and more about seizing the opportunities presented by new technologies and consumer demands.

A Constructive Path Forward

The challenges and controversies surrounding the DOJ's approach to regulating Apple underscore a fundamental truth: litigation and investigations alone are not sufficient to foster a healthy, competitive tech ecosystem. What is needed is a clear set of industry expectations, codified into law by Congress, that balances innovation with fair competition. This legislative approach should be informed by a deep understanding of technology, a commitment to consumer welfare, and a nuanced appreciation of the global competitive landscape.

We must strive for a regulatory framework that is as dynamic and innovative as the technology it seeks to govern, ensuring a future where competition thrives, and consumers benefit from a wealth of choices.