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A Google Breakup Would Serve Progressive Aims and Punish Business

by Stella Morgan

The Role of Antitrust in Shaping the Economy: Progressives’ Vision vs. the American Way

There is an ongoing debate in Washington regarding the extent to which antitrust laws can be utilized as a tool for reshaping the economy. Historically, both Democrats and Republicans have viewed antitrust enforcement as a matter of law enforcement – if a company breaks the law, it should face consequences. However, a new group of antitrust progressives has emerged with a more ambitious vision. They see antitrust as a framework for designing preferred economic outcomes.

According to antitrust progressives, the government should be responsible for picking winners and losers in the market. This means restraining companies that have achieved a certain level of commercial success in the name of fairness. Recent high-profile challenges, such as the Justice Department’s antitrust lawsuit against Google, are examples of these ideas being put into action.

Tim Wu, a Columbia University law professor and former economic adviser to President Joe Biden, is one of the leading proponents of this progressive antitrust movement. He has advocated for a breakup of Google, suggesting that the company should be forced to sell off its Chrome browser. Wu sees the ongoing Google trial as an opportunity to “rewrite our future.”

Wu and others who share this mindset have a broad concept of the role of antitrust law in the US, leaning heavily in the direction of government intervention. They argue that just as progressive tax policies aim to redistribute wealth, progressive antitrust policies aim to reallocate economic power. They believe that some markets cannot be left to develop on their own, and antitrust law provides a means for rebalancing economic power and creating more equity between different economic actors.

For successful companies like Google, this means that a day of reckoning may come when the government steps in to curtail what is seen as monopolistic control, allowing other competitors to gain a larger market share. Wu and others who support this interventionist approach to antitrust law consider it a distinctively American form of industrial policy. However, critics argue that this approach resembles the centralized planning associated with failed economic experiments of the past, such as the Soviet Union.

It is important to note that US antitrust law does not prohibit monopolies. In fact, the reason our laws do not prohibit monopolies is to incentivize companies and investors to strive for greatness. The law focuses on prohibiting anticompetitive conduct by monopolists rather than outright banning companies from achieving dominance in the market. This is where the rule of law comes into play. The government cannot simply decide by fiat that a company has become too powerful and must be reined in. The burden of proof lies on those prosecuting the case.

Those advocating for the breakup of Google, such as Tim Wu, often overlook the fact that the government must demonstrate that the company holds a monopoly market position and that it acquired or maintained that position through unlawful behavior, rather than through legitimate competition. Actions such as Google paying for the right to have its search engine set as the default on certain online platforms could be interpreted as a strategic business move rather than anticompetitive behavior.

Even if the court found that Google engaged in anticompetitive practices, this alone would not justify breaking up the company. Past cases in which courts ordered companies to sell off assets as a remedy for antitrust violations were based on specific facts and circumstances. What may have been appropriate for a different industry four decades ago may not be relevant to the current case involving Google.

Today, Google faces new competition that poses a potentially existential threat to its business. The company has invested billions of dollars in research and development to design innovative products that can help it stay ahead in a rapidly evolving market. These actions do not reflect the behavior of an unrestrained monopolist but rather the reality of a market where success can be fleeting.

Ultimately, the future of Google and its market position should be determined by consumers and the market itself, not by government intervention through antitrust lawsuits. There is no threat to democracy in this situation. The American way is about allowing individuals to decide if Google remains on top or if a new competitor with a better offering emerges. It is a system that values competition and rewards innovation.

In conclusion, the debate surrounding the role of antitrust in shaping the economy is a complex one. Antitrust progressives advocate for government intervention to rebalance economic power and promote equity, while critics argue for the importance of the rule of law and the incentives provided by the current system. Ultimately, the decision lies in finding a balance that ensures fair competition while allowing for innovation and economic growth.

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