Alphabet-Google Big Takeaways from Trump Antitrust Chief’s Senate Answers

Reportedly the EU will rule Google has abused its search dominance this summer, putting the growth and profitability of the ~30% European part of Alphabet-Google’s revenue base at risk.

The logical next important question will be if this EU antitrust enforcement means U.S. antitrust enforcement eventually will follow, expanding Alphabet-Google’s growth and profitability risk, to the combined ~80% U.S. and European revenue base of Alphabet-Google.

Why do the answers of President Trump’s nominee for DOJ Antitrust Chief, Makan Delrahim, to the Senate Committee overseeing his confirmation process, merit close attention as it pertains to Alphabet-Google’s U.S. antitrust risk?

Mr. Delrahim’s is highly likely to be confirmed by the Senate to head the DOJ Antitrust Division, and it is likely to occur in June.

Thus, his written answers under oath to the Senate Judiciary Committee represent the best accessible, most-recent, most-reliable, forward-looking evidence upon which to discern the general direction Mr. Delrahim and U.S. antitrust enforcement is likely to pursue on the Google antitrust matter.

Summary of Big Takeaways

First, a confirmed DOJ Antitrust Chief, Makan Delrahim, is not going to bash the EU publicly or privately for protectionism for ruling that Google abused its dominance in search, like Google got the Obama Administration to do in 2015. This will matter because it will signal implicitly to markets and others that Google’s antitrust risk may not be limited to the EU, but could involve the U.S. as well. This would put ~80% of Alphabet-Google’s revenue base under antitrust risk.

Second, DOJ likely will investigate alleged ad cartel collusion between Google and Facebook. If it concludes Google and Facebook have colluded, it will accelerate the risk as cartel cases are easier to prove, prosecute, and settle.

Third, if the DOJ pursues cartel enforcement action, it would follow Google would be at greater risk of a Sherman Act Section 1 & 2 case as well.

Fourth, DOJ likely will take the lead on Google antitrust matters, either lessening or eliminating the FTC’s involvement in Google and probably Facebook antitrust matters.



After seven years of EU antitrust investigations, EU antitrust chief Margrethe Vestager officially charged Google with abuses of dominance: in search 4-15, Android OS 4-16, and search advertising 7-16. Recently, a senior EU antitrust official signaled the EU could rule on all the cases “in the next few months.” My sources confirm at least one of the three, search which is the most foundational case, will be concluded before the August break.

Apparently, the market is paying no attention to these developments. Alphabet-Google’s stock is up 83% since the EU officially charged Google with abuse of its search dominance two years ago. Alphabet-Google is now the second most valuable company in the world with a market capitalization of ~$687b, which is more than the GDP of all, but 18 countries of the world.


Big Takeaways

First, U.S. won’t publicly criticize EU for Google antitrust enforcement.

In response to a question from Senate Judiciary Committee Chairman Grassley, about the proper role of antitrust in a high-tech, ecommerce economy:

Mr. Delrahim stated: “Antitrust has a vital role to play in the high-tech, ecommerce economy to protect consumers. Actions by firms that threaten competition in the high-tech, ecommerce economy, whether by merger or conduct, should be investigated and pursued if the investigation uncovers an antitrust law violation.”

In response to Senate Judiciary Committee Chairman Grassley’s question about foreign governments’ potential for misuse of antitrust law for competitive advantage, the operative part of Mr. Delrahim’s answer was: if confirmed “I will… ensure American businesses and consumers are not harmed by discriminatory antitrust enforcement by foreign antitrust authorities.” [Bold added]

Analysis: The operative part of that commitment was the determinative word “discriminatory” -- effectively meaning an abuse of power by a foreign authority. This is not only his stated standard under oath, but it is the clear right legal and policy standard.

Mr. Delrahim is not going to oppose the EU antitrust cases against Google, publicly or behind the scenes, for the following reasons.

Before the EU launched its Google antitrust investigation in 2011, both the DOJ and the EU were both on the same page opposing Google on antitrust grounds, during the W. Bush Administration in blocking the Google-Yahoo Ad Agreement, and during the Obama Administration’s first term under the Varney DOJ Antitrust Division in opposing the Google Book Settlement as anticompetitive, and requiring a consent decree in the Google-ITA acquisition.

In 2011, the EU essentially followed the U.S.’ lead in launching its Google antitrust investigation after a September 2011 Senate hearing highly critical of Google’s commercial behaviors.

In October 2012, the FTC staff report on its Google antitrust investigative findings said: “Staff concludes that Google’s conduct has resulted – and will result – in real harm to consumers and to innovation in the online search and advertising markets. Google has strengthened its monopolies over search and search advertising through anticompetitive means, and has forestalled competitors ability to challenge those monopolies, and this will have lasting negative effects on consumer welfare.” P. 116

In January 2013, the FTC Commissioners voted to close the Google antitrust investigation, but did not repudiate the findings of the FTC Staff report. It was the commissioners’ collective prosecutorial judgment that they did not believe the FTC could prove their case in a U.S. court because Google’s behaviors in biasing search to favor its own products “could be plausibly justified as innovations that improved Google’s product and the experience of its users. It [the FTC] therefore has chosen to close the investigation.”  (The EU has a different antitrust law than the U.S. with a lower threshold of dominance; different decisionmaker authorities; and due process procedures.)

The EU then provided Google with three opportunities to settle the EU’s proposed search charges against Google, but each time it failed in part because Google insisted that the EU antitrust authorities legally bind itself from investigating Google for any antitrust issue/problem for the five years after the settlement date – a de facto, going forward, five-year, EU pardon for any potential future antitrust violations.

After five years of investigations and three failed antitrust settlement attempts, the new European Commission filed official Statements of Objections in three different cases (search, Android and search advertising). The EU then gave Google as many extensions as they requested to prepare their defenses. Google also declined its right to have a public hearing to challenge the charges against it.

This seven year EU-Google investigation that: 1) began with the U.S. investigating Google’s search practices; 2) has afforded Google with exceptional opportunities to resolve the case in a settlement; and 3) ensured Google procedurally could put forth its best defense -- is the antithesis of “discriminatory antitrust enforcement by foreign authorities,” Mr. Delrahim’s stated standard for judging this type of matter. [Bold added]

So far, these facts present a fair EU adjudicative process so far, and that is before Google has the opportunity and right to appeal the EC DGComp’s ultimate decisions to Europe’s High Court.  

Whether Mr. Delrahim ultimately decides to prosecute Google for antitrust offenses or not, will be his call based on the facts and his best judgement of U.S. law and court precedent.

However, given the clear history of this case above and the litany of facts, and given the fact that EU antitrust law is legitimately different from America’s,it is hard to imagine Mr. Delrahim or the Trump Administration publicly claiming the EU’s prosecution of Google is an abuse of their antitrust power, like President Obama publicly implied in 2015.


Second, DOJ likely will investigate alleged ad cartel collusion between Google and Facebook.

In response to a written question from Senator Franken on Google & Facebook and the free flow of information:

Mr. Delrahim stated: “To the extent that companies with market dominance take anticompetitive actions to stifle competition, vigorous and timely antitrust enforcement is appropriate. If credible allegations of antitrust law violations are made, such allegations will be investigated if I am confirmed.”

Here is the question for, the global antitrust readership of this blog and this specific Google-Facebook Ad Cartel research series, to answer. Are the allegations in this research series -- i.e. that Google likely colluded with Facebook in  first quarter 2014 to each abruptly stop competing directly with each other going forward so they could jointly dominate the digital advertising business going forward -- “credible allegations of antitrust law violations according to Mr. Delrahim and his future DOJ antitrust enforcement team?

In response to a written question from Ranking Member, Senator Feinstein “What will you do to protect consumers?

Mr. Delrahim stated:

“If confirmed my focus for the Antitrust Division would be on cartel behavior that raises prices or otherwise adversely affects the welfare of consumers; mergers or other forms of consolidation that risk substantial lessening of competition; and single firm or collusive conduct that suppresses the free market competition to which consumers are entitled.” [Bolds added]


Third, Google could be at risk of a Sherman Act Section 1 & 2 case.

In responses to Senator Blumenthal’s questions specifically on online platforms:

Mr. Delrahim stated:Section 1 and Section 2 of the Sherman Act govern the competitive behavior of businesses throughout the economy, including Internet-based platforms. Those laws prevent companies from engaging in conduct that harms competition without appropriate justification. Whether any particular conduct is an antitrust violation will depend on the facts and circumstances surrounding the conduct. As a general matter, however, platforms with monopoly power may not engage in exclusionary conduct that harms consumers in violation of antitrust laws. [Bold added]

Mr. Delrahim stated:“If I am confirmed, the Antitrust Division will investigate and vigorously enforce the antitrust laws with respect to online platforms as I would in any industry, based on the economic and analytical tools appropriate to the circumstances and to ensure robust competition and innovation.” [Bold added]


Fourth, DOJ likely will take the lead on Google antitrust matters, either lessening or eliminating the FTC’s involvement in Google and probably Facebook matters.

In response to a question from Senate Judiciary Committee Chairman Grassley, about the shared antitrust jurisdiction of the DOJ Antitrust Division and the FTC:

Mr. Delrahim stated: “The FTC and the Department of Justice share certain jurisdiction over merger and civil nonmerger matters in many but not all industries. For example, airline and telecommunications mergers are subject to the jurisdiction of only the Department of Justice. Over the years the two agencies have developed a clearance process to ensure that only one agency reviews particular transactions or conduct. If I am confirmed, I will work closely with the Federal Trade Commission to review past divisions of responsibility and ensure that future divisions of responsibility between the agencies are both appropriate and efficient.” [Bolds added]

Mr. Delrahim’s answer speaks volumes.

First, he made it clear that FTC only has jurisdiction over “civil nonmerger matters,” and by implication non-criminal matters. It is important to note that serious cartel offenses are criminal offenses that only DOJ has the authority to prosecute. The FTC does not have criminal antitrust authority. If Mr. Delrahim investigates Google and Facebook for ad cartel collusion, practically Google and Facebook antitrust matters would be out of the FTC’s antitrust league.

Second, there are industries where only the DOJ has jurisdiction. The online platforms and their potential cartel dynamic could eventually make some or all this industry like airlines and telecommunications.

Third, if it matters to Mr. Delrahim for “a clearance process to ensure that only one agency reviews particular transactions or conduct,” it’s obvious that both agencies inappropriately and inefficiently have been reviewing the same particular conduct in search, search syndication, search advertising, and search advertising syndication for a decade. Given DOJ is the official liaison with the EU, and it alone has criminal cartel enforcement authority, the DOJ is the appropriate and efficient choice for overseeing Google matters going forward.

Fourth, if Mr. Delrahim review[s] past divisions of responsibility” he will find that the two agencies have inappropriately applied different legal approaches and inefficiently had opposite antitrust records with Google. The best way for Mr. Delrahim to “ensure that future divisions of responsibility between the agencies are both appropriate and efficient” is for the DOJ to take the exclusive lead on Google and Google and Facebook cartel collusion going forward.

In sum, Mr. Delrahim’s answers under oath to the Senate Judiciary Committee have provided more strong evidence that the Trump DOJ and Delrahim DOJ Antitrust Division will pursue a by the book, traditional antitrust approach to the Google antitrust issue, and will let the facts, analysis, and the law determine the outcome.

That’s a big and welcome departure from the second term of the Obama Administration where it was made effectively clear to any potential complainants, and the antitrust community, that the Google-friendly, Ramirez FTC and Hesse-Baer-Hesse DOJ Antitrust Division, had no interest in seriously hearing or investigating any Google antitrust matter.


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.


Google (& Facebook) Antitrust Series


Part i: Why Did Google & Facebook Stop Competing with Each Other? [8-3-16]

Part ii: Google’s Information is Power, Info-poly Power [9-18-16]

Part iii: What No Bids for Twitter Tell Us about Google-Facebook & Online Advertising [10-21-16]

Part iv: Five Worst Google Antitrust Decisions [11-4-16]

Part 1: America’s Indefensible Media Concentration Double Standard [12-5-16]

Part 2: The Google-Facebook Online Ad Cartel is the Biggest Competition Problem [1-12-17]

Part 3: Twitter & Snap Evidence Confirm Goobook Ad Cartel Crushing Competition [2-15-17]

Part 4: Look What’s Happened Since the FTC Stopped Google Antitrust Enforcement [3-13-17]

Part 5: Google Antitrust Implications of Makan Delrahim as DOJ Antitrust Chief [3-28-17]

Part 6: Trump Administration Implications for Google Antitrust in EU, US & Markets [4-7-17]

Part 7: 6 Reasons Trump DOJ Will Take Lead from FTC in Google Antitrust Enforcement [4-13-17]

Part 8: Google-Russia Antitrust Deal Has Big Implications for EU Cases, Trump DOJ [4-19-17]

Part 9: Google Takeaways from Trump Antitrust Chief’s Senate Confirmation Hearing [5-11-17]

Part 10: New Evidence Google Facebook Ad Cartel Crushing Competition Market Failing [5-18-17]

Part 11: Alphabet-Google Big Takeaways from Trump Antitrust Chief’s Senate Answers [6-1-17]