Earlier this week, the House of Representatives passed H.R. 1435, the Preserving Choice in Vehicle Purchases Act.  This was introduced by Representative John Joyce (R-Pa.) and would prevent the U.S. Environmental Protection Agency from issuing Clean Air Act waivers for new regulations that would ban sales of new motor vehicles with internal combustion engines (ICEs). No one state should hold equal or greater regulatory power than the federal government. The harms that the California Air Resources Board’s (CARB) regulations will bring to U.S. auto manufacturers and the energy grid will all eventually be borne by taxpayers and result in less consumer choice. In August 2022, CARB enacted new requirements on automakers effectively banning the sale of new ICE cars and light trucks by 2035 and limiting consumer choice in new vehicles to zero-emission vehicles (ZEV), including plug-in hybrids, full battery-electric, and hydrogen fuel cell vehicles. There are three significant issues with CARB’s policy: the clear violation of consumer choice, strain on an increasingly unreliably energy grid, and the inevitable rise in cost of taxpayer-funded ZEV credits. Read TPA’s letter sent to members of Congress.
 

The DOJ's Frivolous Antitrust Case
 
The Department of Justice (DOJ) has begun the most significant antitrust case brought in decades against the tech industry. The government alleges that Google Search has obtained monopoly status among search engines and it maintains this market dominance through unfair, anticompetitive practices. Specifically, it objects to business agreements that place Google Search and other services as the default for many web browsers and smart devices.  I know many people may have issues with Google, but this case goes way beyond Google and shows the weaponization of the DOJ. And, the outcome of Google’s trial has implications far beyond the online search market. The underlying question at issue is whether antitrust authorities should subvert the market’s competitive forces, and consumer welfare, to satisfy their own arbitrary economic preferences and discomfort with big business. DOJ’s case has two legally fatal flaws. First, although Google dominates the search-engine market, the relevant online search market is much broader, including Amazon and other online marketplaces, product-specific services’ apps (e.g., Expedia), and, increasingly, social-media platforms such as Instagram and TikTok. Second, Google’s arrangements to receive default-search status – often referred to falsely as “exclusivity” agreements – in fact benefit consumers and otherwise enhance competition. These deals do not preclude users from conveniently choosing to use another search engine and have clear analogues to accepted off-line retail practices. Despite the DOJ’s pretenses to the contrary, Google’s success stems almost entirely from its product’s functional superiority over those of competitors.
 
Google’s Default Search Agreements are Pro-Competitive and Pro-Consumer
 
Aware of its own competitive mortality, Google has innovated unrelentingly to better its product and to ward off insurgent competitors. This dynamic typifies a properly functioning market, in which the company that provides the best product – irrespective of its status as either an upstart or an incumbent – wins. Google’s default-search contracts benefit it, of course, but such practices, known as “slotting fees,” are common to many industries. Food companies, for example, regularly pay grocery stores for a more prominent display location. It is not Google, but browser owners, phone manufacturers, and phone carriers that initiate these default agreements. They gain revenue or free access to Google’s mobile app suite, and they provide to their users a pre-set, usable product that requires minimal configuration out of the box. Further, Google’s agreements with Android-device manufacturers and cell carriers have enabled those companies to compete more robustly with Apple’s iOS line and to lower the consumer cost of devices and services.
 
Consumers Have Made Their Choice
 
Despite default-search agreements, any consumer who dislikes Google Search may easily switch to a competitor. The consumer has no less choice due to Google’s default status. Android users may remove the pre-loaded Google Search widget with two clicks. On iPhone, it requires just four clicks to change the default Safari search engine. The Safari on a Mac contains a drop-down menu from which the user may select her preferred option. Even should another search engine supplant Google Search as a common default, many users would continue to prefer it. Indeed, in 2014, Mozilla Firefox adopted Yahoo as its default search engine only to replace it with the superior Google Search following user dissatisfaction. On Bing, the native default search engine on Microsoft’s Edge browser, “Google” is one of the terms users most often search. Put simply, other search engines fail to compete with Google because their products fall short.
 
What’s Really At Stake
 
The DOJ has embarked on an unholy crusade to reshape tech markets and eventually the entire economy. Such efforts end invariably in limited consumer choice, high prices, and stunted innovation. The American tech sector,  conceived in liberty, has proven indispensable to the country’s continued economic dominance. Meanwhile, would-be technocrats stateside need only study Europe’s technological stagnation to understand the economically stifling effects of hyperregulation. Google has maintained its market share primarily through rough-and-tumble competition. It’s continued success does not, however, suggest that it will remain forever successful. A.I., other innovations, and the ineluctable force of creative destruction will ensure that tech markets remain prosperous and competitive.
 
Only economically foolish, short-sighted government tinkering can ruin this process.