Welcome to The Corner. In this issue, we look at how the Trump DOJ’s pursuit of a Google breakup could help rewrite the rules of the internet and AI for the future.
A Brand New Internet? DOJ’s Plan to Pursue Google Breakup Remakes Online Life
Karina Montoya
Amid reports that Google asked the Trump administration to spare it from a breakup in the case it faces for its search monopoly, the U.S. Department of Justice and 33 plaintiff states reaffirmed their request to have Google divest Chrome — and Android, if competition doesn’t increase in five years — in their revised remedies submitted to court last Friday.
This new submission illustrates the complexity of having to pry open markets that have been dominated for so long by a single corporation. But by reaffirming the core of its initial plan to restructure Google, the DOJ has moved the U.S. much closer to what could prove to be a radical reordering of corporate power over communications and commerce on the internet.
Besides a breakup, the DOJ also upheld its proposal for Google to offer syndication licenses of its search indexes — the collections of data that make the web ‘searchable’ — at marginal cost and under non-discriminatory terms. In practice, this would reduce costs for rivals to access Google’s massive storage of websites and ranking signals, while giving them freedom to display search results differently from Google. Years before the Google trial, Daniel Hanley, senior legal analyst at Open Markets Institute had also put forward this type of solution to increase competition in search.
Lawyers who work for Google competitors believe this would increase competition in search ads as well. “The syndication license also imposes interoperability obligations on Google to ensure it supports a competitor’s ability to make money out of search text ads using Google’s search index,” Tim Cowen, chair of antitrust at the UK law firm Preiskel & Co., told Open Markets. “In effect, this is a part of reseller obligations applied in telecoms where wholesale access is being provided to support retail competitors,” he added.
In their statement, the DOJ and the states did make significant compromises. For example, the DOJ replaced an outright ban on Google’s AI investments with a prior notification requirement of any plans to invest in AI or search, be it through partnerships, joint ventures, or acquisitions — including plans to expand existing deals. The provision may prove tactically valuable in court as a way to refute Google’s arguments that the DOJ’s main goal is to harm the corporation.
With this measure, the DOJ would effectively create a special vigilance framework complementary to the scope of the Hart–Scott–Rodino Act. As the Federal Trade Commission showed in a 2020 investigation, many Big Tech acquisitions fall through the cracks of the HSR Act reporting requirements.
An ultimate victory for the DOJ would also be transformative for web publishers and individual creators, in two ways. One is related to data for AI training. The new plan expands the DOJ’s November proposal prohibiting exclusionary agreements for content collection between Google and web publishers to include current agreements. This would stop Google from using AI content deals to lock in data for itself and block it for everyone else, as in the deal it struck with Reddit.
The second way is by giving web publishers — especially news media — more control of their content flowing across Google platforms while also providing them stronger protections from retaliation. The DOJ upheld and expanded the opt-out standard for web publishers to take their content out of AI model training without disappearing from Google’s search index. If approved, when web publisher or creator opts out of any Google AI product, including AI Overviews, Google cannot punish them on its search index, or on any other Google product (such as YouTube or AdSense).
Some believe these remedies will encourage stronger enforcement — and perhaps stronger laws — in Europe and elsewhere. “Overall, the plaintiffs’ legal theory on effective remedies and the resulting demands […] are very compelling,” said lawyer Thomas Höppner, a counsel to several complainants against Google, including in landmark EU cases. “They should serve as a guidance for the overdue reform of remedies in European competition law.”
Taken together, the DOJ’s decision to stay the course is an encouraging sign the Trump Administration will build on President Biden’s strong enforcement record. Then again, it’s worth remembering the Reagan Administration’s early record on antitrust.
The Reagan DOJ, for instance, opted to pursue a case against AT&T that was first filed by the Ford Administration in 1974. This resulted in the breakup of that corporation in 1982, an action that spurred a series of technological advances that helped lay the foundations for today’s internet.
But the case also notched the high water mark of antitrust enforcement under the Reagan White House, which almost immediately thereafter abandoned America’s long tradition of strong antimonopoly enforcement by embracing the pro-monopoly “Consumer Welfare” philosophy.
Open Markets Legal Team Testifies On Ohio and Minnesota Bills Involving Noncompetes
Open Markets legal team delivered written testimony in support of SB 11, an Ohio bill that prohibits non-compete clauses for all workers in the state. Testifying on behalf of the Ohio bill, legal director Sandeep Vaheesan highlights how non-competes limit workers' flexibility, depress wages, and hinder small business formation. Read Vaheesan’s full testimony here.
At the same time, Open Markets came out against a bill in Minnesota, which already has a law banning noncompetes, that seeks to exempt employees involved in research and development and those with responsibility over trade secrets. In his testimony, chief economist Brian Callaci argued against a Minnesota bill that uses weak justification to exempt employees from noncompetes, saying that other legal tools, like trade secret laws or non-solicitation agreements, are more effective and less restrictive. Read Callaci’s full testimony here.
📝 WHAT WE'VE BEEN UP TO:
Open Markets legal director Sandeep Vaheesan wrote an op-ed for The American Prospect arguing that expanding publicly owned electricity is a better way to fight climate change than relying on Big Tech or unregulated private utilities to manage the process. “Instead of picking between Big Tech and private utilities to lead, we should put public power at the forefront of a national decarbonization program,” he urges.
CNBC quoted Open Markets transportation policy analyst Arnav Rao as saying that multiple policy approaches are required to revive the U.S.’s moribund shipbuilding industry. “U.S. shipbuilding needs a system of tariffs and subsidy to ensure that key inputs, including steel, are made in America,” Rao said.
The New Republic quoted OMI food program manager Claire Kelloway on how Trump’s tariffs are adversely impacting agriculture. Kelloway said becoming more self-sufficient in food production is more “complicated” than raising barriers at the border. It “involves building up regional supply chains and processing, and supporting farmers that are using more sustainable practices and fair labor standards,” she said.
Open Markets submitted a comment welcoming the UK's draft Strategic Steer to the Competition and Markets Authority, saying strong enforcement fosters economic growth by ensuring startups and challengers can compete against dominant incumbents. Among its recommendations are to balance speed with rigorous enforcement to prevent rushed, ineffective decisions; to avoid excessive collaboration with businesses to prevent regulatory capture, and; to expand stakeholder engagement to include civil society groups, not just businesses and consumers. Read the comment here.
The Center for Journalism & Liberty at the Open Markets Institute applauded the Department of Justice’s reiteration of its plan to force Google to sell Chrome — and perhaps Android, too, if competition doesn’t increase — to address concerns over its search monopoly. “It’s clear that the DOJ sees structural separations have proven to be effective and are necessary to correct Google’s misconduct,” CJL director Dr. Courtney Radsch said.
CJL director Dr. Radsch last week spoke on a panel at the UK Media Freedom Forum on limiting the impact of corporate interests on media freedom. The panelists discussed how the rapid development of AI has brought a new slate of issues, including copyright and loss of jobs, and what states can do to curb the power of corporations to protect media freedom.
Radsch also cohosted the AI Innovator Collaborative event, a monthly gathering for Online News Association members using AI in journalism to connect and share ideas. This month’s discussion was on licensing and legislation strategy and how newsrooms can protect and prepare themselves for AI revenue opportunities.
Tech Policy Press cites a policy brief coauthored by Open Markets Europe director Max von Thun urging the European Union to stand firm in regulating Big Tech platforms despite attacks from the Trump administration and U.S. tech billionaires. “There has been broad support for the EU to continue to uphold the rule of law and enforce its digital rulebook,” the article reads.
South Africa’s Business Day publication quoted CJL director Radsch on the value of news to Google’s bottomline in which she says that news content “accounts for the majority of Google’s $280 billion annual revenue.”
🔊 ANTI-MONOPOLY RISING:
The Department of Justice’s Antitrust Division is probing egg producers to determine whether anticompetitive practices like supply and price coordination may be contributing to massive egg price increases. (ABC News)
The DOJ is also investingating Norfolk Southern and a Virginia railroad company for anticompetitive practices in the state. (FreightWaves)
Several hospitals announced lawsuits against Blue Cross Blue Shield over anticompetitive practices. The flurry of lawsuits, filed in California, Pennsylvania, and Illinois, came from providers who opted out of a $2.8 billion class action settlement against the insurer for coordinating with rivals to avoid competing in certain markets. (Reuters)
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📈 VITAL STAT:
100 Million
The maximum criminal penalties California lawmakers are considering for companies that violate the state’s antitrust law, up from $1 million. A bill filed in the state senate last week would strengthen California’s Cartwright Act, the more than 100-year-old law the state’s attorney general has used to sue companies including Amazon and the energy trading firm Vitol. (Bloomberg Government)
📚 WHAT WE'RE READING:
Careless People: A Cautionary Tale of Power, Greed, and Lost Idealism — Facebook whistleblower Sarah Wynn-Williams recounts her seven years as the corporation’s director of global public policy. In her alarming memoir, Wynn-Williams describes a series of decisions by leaders like Mark Zuckerberg and Sheryl Sandberg that put corporate greed ahead of people’s safety and rights. For example, in one of many concerning episodes, Wynn-Williams describes the company building censorship tools in its quest to be allowed to operate in China.
Order Legal Director Sandeep Vaheesan’s new book:
Sandeep Vaheesan, the legal director at the Open Markets Institute, published his first book Democracy in Power: A History of Electrification in the United States on December 3, 2024. Vaheesan examines the history—and presents a possible future—of the people of the United States wresting control of the power sector from Wall Street, including through institutions like the Tennessee Valley Authority and rural electric cooperatives.
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