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Google Antitrust Implications of Makan Delrahim as DOJ Antitrust Chief
Submitted by Scott Cleland on Tue, 2017-03-28 16:03
President Trump’s impressive nominee to head the DOJ Antitrust Division, Makan Delrahim, enters the global antitrust stage when one company, America’s Alphabet-Google, has been under near constant antitrust investigation around the world for a decade and faces multiple pending antitrust enforcement actions.
What is the global and U.S. antitrust community to glean from this nomination?
Mr. Delrahim’s background speaks volumes, especially if one believes the adage, people are policy.
Overall, Makan Delrahim is a widely-respected, veteran antitrust official, attorney, expert, and professor, with high-level antitrust experience that check all the right boxes, organizationally, functionally, and professionally.
Mr. Delrahim’s antitrust-specific experience is outstanding.
He served: as Minority Chief Counsel of the Senate Judiciary Committee during the Microsoft monopolization trial from 1998-2000; as Majority Chief of Staff and Chief Counsel for Senate Judiciary Committee Chairman Orin Hatch from 2000-2003 during the Microsoft monopolization case appeal; as DOJ Deputy Assistant Attorney General for the last two Republican DOJ Antitrust Chiefs, Hew Pate and Tom Barnett, from 2003-2005, where he specialized in global coordination of antitrust/cartel enforcement and intellectual property related antitrust issues; as a Commissioner of the U.S. Antitrust Modernization Commission from 2003-2007; and as an Adjunct Professor of Law at Pepperdine University from 2011-2016.
Mr. Delrahim also obviously enjoys the highest level of trust.
President Trump and his White House Counsel Don McGahn, have entrusted their current White House Deputy Counsel for Nominations, Makan Delrahim, with running point on the single most important legal task of the new Trump Presidency, shepherding the selection and confirmation of the next U.S. Supreme Court Justice, Neil Gorsuch, through an exceptionally demanding process. This responsibility also conveys the strong implicit trust of both the current U.S. Attorney General Jeff Sessions and the current Senate Judiciary Chairman Charles Grassley, both of whom Mr. Delrahim worked for when they were Senators on the Judiciary Committee, when Mr. Delrahim was the Committee’s Chief of Staff.
Thus, the next DOJ Antitrust Chief, Makan Delrahim, when confirmed by the Senate, can be expected to be a traditional Republican antitrust enforcer, with: a constitutional conservative approach to the law; a strong respect for intellectual property rights; a rich appreciation of international antitrust enforcement; a practical focus on the antitrust long view; and a whole lot more clout than any traditional DOJ Antitrust Chief.
The main initial question here is who now has “the lead” on Google antitrust enforcement -- the FTC or the DOJ?
Conventional wisdom assumes it’s the FTC.
The FTC did the last in-depth Google antitrust enforcement investigation which closed abruptly and chaotically in early January 2013. A few sparse news reports over the last four years have suggested that the FTC is still investigating, but none of the normal indicators of a serious investigation – civil investigative demands or an outside counsel – are present.
However, current circumstances suggest conventional wisdom may be incorrect.
For the last four years, nothing material has happened on the FTC/DOJ Google antitrust front, other than periodic FTC-Google antitrust public embarrassments.
(Remember the FTC-Google Staff Report was mistakenly released and it totally contradicted the FTC’s public story that staff found nothing worthy of prosecution. And remember Buzzfeed caught the FTC Chairman putting out a press release defending Google that was largely written by the Google lobbyist who requested it from the FTC.)
Four years is so long a period, that many may have forgotten that the DOJ and FTC used to “take turns” addressing Google antitrust matters.
This DOJ-FTC “take turns” approach to Google started with Mr. Delrahim’s former DOJ antitrust boss Tom Barnett, and his former DOJ deputy peer Deb Majoras who became FTC Chair.
Consider the DOJ/FTC ping-pong oversight of Google over the last decade: 2006 DOJ Google-YouTube; 2007 FTC Google-DoubleClick; 2008 DOJ Google-Yahoo Ad Agreement; 2009 DOJ Google-Book Settlement; 2009 FTC Google-AdMob; 2010 DOJ Microsoft-Yahoo competition to Google; 2010 DOJ Google-ITA; 2010 DOJ stopped Google-Apple-Intel-Adobe employee poaching collusion; 2011 FTC-Google Search bias investigation; 2011 DOJ Google-Motorola: 2012 FTC Google-Android investigation; 2013 FTC closes all Google antitrust investigations; 2013-2017 DOJ opposed all EU antitrust investigations and enforcement against Google.
What this shows is “taking turns” wasn’t a hard and fast rule, but was negotiated as they went along.
What may turn out to be most relevant here is the situation at the FTC.
For the last four years, it has become a de facto FTC-Google antitrust non-enforcement zone. It’s done nothing with the Google-Android tying case, despite obvious contractual evidence, successful Android cases prosecutions overseas, and the case being surprisingly analogous to the successful DOJ prosecution of Microsoft for illegal contractual tying.
Moreover, the FTC currently does not even have a majority quorum to officially act.
Furthermore, this would not be the first time that the DOJ would have to take over a dysfunctional FTC tech-related antitrust prosecution.
For example, after the FTC launched an antitrust probe into Microsoft for colluding with IBM in 1990, and after two years of FTC deadlocks in advancing a prosecution, the DOJ had to take over the case in 1993. In 1994 the DOJ and Microsoft entered a consent decree to resolve that initial matter. In 1998, the DOJ filed its successful seminal Sherman Act monopolization case against Microsoft. (See Wired timeline here.)
In short, my initial main takeaway from the formal nomination of Makan Delrahim to head the DOJ Antitrust Division, is that if Makan Delrahim wants the DOJ to take the antitrust lead on the overall Google antitrust problem/case, he apparently has the institutional trust, clout, and authority to make it happen.
Scott Cleland served as Deputy U.S. Coordinator for International Communications & Information Policy in the George H. W. Bush Administration. He is President of Precursor LLC, an internetization consultancy for Fortune 500 companies, some of which are Google competitors, and Chairman of NetCompetition, a pro-competition e-forum supported by broadband interests. He is also author of “Search & Destroy: Why You Can’t Trust Google Inc.” Cleland has testified before both the Senate and House antitrust subcommittees on Google and before the relevant House oversight subcommittee on Google’s privacy problems.