Google’s defense team in the biggest tech monopolization case of the modern era includes veterans of a similarly historic US antitrust case. But back then they were on the government’s side.
(Bloomberg) — Google’s defense team in the biggest tech monopolization case of the modern era includes veterans of a similarly historic US antitrust case. But back then they were on the government’s side.
For the next 10 weeks, lawyers for Alphabet Inc.’s Google will face off against federal prosecutors and state attorneys general at the same Washington DC courthouse where decades ago several worked for the Justice Department or fought side-by-side with it in the last major US monopolization case against Microsoft Corp.
The Google case is the first in a series of battles over the future of the internet, as antitrust cases against Meta Platforms Inc., Amazon.com Inc. and Apple Inc. wait in the wings. Yet few attorneys have experience with major monopolization trials because the government last brought suit against a tech company for antitrust violations more than 25 years ago in the Microsoft case.
Kent Walker, Google’s chief legal officer, and Susan Creighton, a top antitrust adviser to the company, both represented Netscape Communications Corp., a Silicon Valley start up with a web browser Microsoft was accused of hindering. John Schmidtlein, now serving as Google’s lead litigator, represented several states suing Microsoft for antitrust violations and Mark Popofsky, another of the company’s antitrust advisers, represented the Justice Department in the suit.
Walker, who was Netscape’s deputy general counsel, recalled that he was often called on to explain how Microsoft limited distribution of Netscape’s browser and helped prepare the company’s chief executive officer to testify at the trial. He acknowledged some similarities between the cases.
“People wanted Netscape because it was the best browser,” Walker said in an interview. “We think in this case, and it’s clear, most people want to use Google search. They want to use Chrome.”
But he rejected the idea that Google, like Microsoft before it, has sought to limit the ability of consumers to switch away from the pre-selected option, known as a default.
“It was much harder to have users have choice back then,” Walker said, recalling that Netscape, later purchased by AOL, would mail CDs to consumers to download the software for a different browser. These days it takes “two clicks, five taps or four taps. It’s a whole lot easier to change your browser or your search engine.”
The Justice Department has accused Google of freezing out competitors in the online search engine market through deals like the one it has with Apple in which it has paid the iPhone maker billions of dollars since 2005 to be the default search engine on its Safari web browser.
Microsoft in 1998 was found to have maintained a monopoly in the personal computer operating system market by illegally restricting competition through contracts it put on manufacturers restricting removal of its web browser and installation other programs. The court initially recommended breaking up the company but that was overturned on appeal and Microsoft changed some business practices as part of a settlement.
The Google case “has a lot of similarities to the Microsoft case,” said Doug Melamed, a former Justice Department official during the trial who is now a scholar-in-residence at Stanford Law School. “You have an incumbent monopoly, Google, that is using its various sources of power to induce particularly distributors, basically on access to search engines to favor Google and thereby relatively disfavor disadvantaged” search engines.
Antitrust ‘Road Map’
The Microsoft case allowed the courts “early on in the development of the internet, to sort of lay out a road map of here’s how antitrust can and should think about technology issues,” Creighton, another lawyer for Google, said in an interview.
Creighton, now a partner at Wilson Sonsini Goodrich & Rosati, authored a crucial 222-page white paper on behalf of Netscape that is credited with triggering the Justice Department’s investigation and eventual suit against Microsoft.
Netscape was the first popular browser, released in December 1994. Microsoft didn’t introduce its Internet Explorer browser until six months later. The 1996 white paper laid out Netscape’s allegations, including that Microsoft had threatened to stop selling its Windows operating system to Compaq Computers if the company kept featuring Netscape’s browser instead of Internet Explorer.
“This is, at bottom, a very simple case,” the Netscape white paper said. “It is about a monopolist (Microsoft) that has maintained its monopoly for more than 10 years. That monopoly is threatened by the introduction of a new technology (web software) that is a partial substitute — and, in time — could become a complete substitute for the monopoly product.”
In an interview, Creighton said she developed the ideas behind the white paper after speaking with Netscape co-founder Marc Andreessen about the problems the company was facing because of Microsoft’s conduct. Creighton wasn’t involved in the later litigation but said the case was crucial for the Justice Department and courts in understanding how antitrust should apply to the internet.
Creighton will attend the trial representing Google, though the questioning of witnesses will mostly be handled by her partner Wendy Waszmer and Schmidtlein, a partner at Williams & Connolly LLP. Schmidtlein and other Williams & Connolly lawyers represented a group of states that opposed the US settlement with Microsoft and litigated a 32-day trial in 2002 over whether the proposed remedy was good enough to resolve the antitrust violations.
Also at the front tables representing Google will be Popofsky, who now heads Ropes & Gray’s antitrust practice and specializes in appeals. The son of a famed antitrust attorney, Popofsky worked as a litigator on the Microsoft case and argued an appeal that allowed the public to watch the deposition of former Microsoft CEO Bill Gates.
Unlike in Microsoft where the Justice Department turned to an outside litigator, David Boies, for trial help, the agency is relying on mostly home-grown talent for the Google case.
Lead attorney Kenneth Dintzer, a 30-year veteran of the department, is no stranger to high-stakes trials. He served as the lead attorney in defending the federal government in a lawsuit brought by Maurice “Hank” Greenberg over the bailout of insurance giant American International Group Inc. He also previously served as a lead attorney in the Justice Department’s successful challenge on AT&T Inc.’s proposed merger with T-Mobile US Inc.
Only one of the Justice Department’s lead litigators — Adam Severt — was involved in the Microsoft case. After joining the agency in 2004, he helped oversee the tech giant’s compliance with a settlement that aimed to protect development and distribution of new software. In the years since he has been involved in several of the Justice Department’s major antitrust litigations, including its suit against American Express Co. over its rules barring businesses from steering customers to lower cost cards and a pair of merger challenges blocking high-profile mergers in the health insurance industry.
Rounding out the main courtroom team are Meagan K. Bellshaw, who was involved in the Justice Department’s successful challenge to Penguin Random House LLC’s acquisition of Simon & Schuster Inc., and David Dahlquist, who joined the Justice Department last year after 22 years as a litigation partner at the law firm Winston & Strawn LLP in Chicago.
Attorneys general for 35 states, the District of Columbia, Puerto Rico and Guam will simultaneously present their own case against Google at the trial. The states’ case mirrors many of the allegations brought by the Justice Department, but features additional allegations about how Google allegedly used its popular search advertising tool, SA360, to block advertisers from buying ads on Microsoft’s Bing.
The states hired two veterans of the Obama-era Justice Department to help litigate their case. Both William Cavanaugh and Jonathan Sallet served as the Justice Department’s top antitrust litigator during the Obama administration.
Cavanaugh argued against a major copyright settlement that Google reached with the Authors Guild over its Google Books project. That settlement was ultimately rejected, though litigation found Google’s project was exempt from copyright law because of fair use protections.
Sallet was general counsel at the Federal Communications Commission, helping the agency win a challenge to its proposed net neutrality rules. He later moved to the Justice Department, helping oversee litigation against health insurance mergers and the ultimately abandoned merger between Comcast Corp. and Time Warner Cable Inc.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.