Philip Verveer, the legal mind behind the historic lawsuit that dismantled AT&T in the 1980s, has voiced confidence in the Department of Justice’s (DOJ) current antitrust case against tech giant Google. Verveer, who spearheaded the action against AT&T in the 1970s, believes the odds of a DOJ victory against Google are favorable. “I think the government has a 50%-plus chance,” Verveer stated in an interview.
While drawing parallels between the two cases, Verveer acknowledged distinct challenges faced by the current Justice Department. He pointed to the pervasive influence Google holds in the realm of online search, akin to AT&T’s dominance in telecommunications during its heyday.
In the 1970s, Verveer, then a young prosecutor, drafted the lawsuit that ultimately led to AT&T’s disintegration, breaking its stranglehold on phone service and equipment monopolies. The DOJ’s efforts culminated in a landmark 1984 settlement, paving the way for the emergence of regional telecom companies such as Verizon, T-Mobile, and the present-day AT&T.
The repercussions of AT&T’s dissolution remain palpable today, with over 307 million smartphone users essentially confined to a singular choice in wireless providers. Pre-installed services, including Google’s web browsing dominance, further underscore the enduring impact of the AT&T case.
Verveer categorizes both the AT&T and Google cases as instances of “vertical foreclosure,” aiming to dismantle business structures accused of impeding competition by exerting control over multiple markets.
Verveer’s scrutiny of AT&T was prompted by rival company MCI’s complaints to the Justice Department regarding AT&T’s perceived monopoly. Convinced of the government’s compelling case, Verveer presented his findings to higher-ups in April 1974. The green light from then-Attorney General William Saxbe came in November of the same year, amid the post-Nixon era’s emphasis on good governance.
Harold Greene, the presiding judge in the AT&T case, sided with the government’s arguments, potentially influencing the company’s decision to settle. Greene affirmed that the Bell System had violated antitrust laws over an extended period.
However, critics, including Carl Hittinger of BakerHostetler, who represented AT&T, contended that the company’s innovative contributions should not have warranted punishment. Hittinger cautioned against reflexively advocating for breakups in cases of anticompetitive behavior, citing post-dissolution challenges.
In contrast to the AT&T era, antitrust experts note current judicial interpretations of anti-competitive conduct have grown more restrained. Presently, lower prices are often viewed as beneficial to consumers, posing a hurdle for prosecutors in the Google case.
To surmount this obstacle, prosecutors argue that the personal data consumers provide to Google in exchange for search results renders Google Search not truly free. Despite legal complexities, Verveer remains optimistic, highlighting the universal acknowledgment of Google’s pivotal role in internet search.
Central to the government’s case is the allegation that Google leverages contracts to secure its search engine as the default on various devices, thereby stifling competition. Verveer suggested Google’s response to Judge Amit Mehta’s query about users switching defaults may pose a challenge for the tech giant.
With billions allegedly spent by Google on securing default positions, Verveer emphasized the substantial advantage gained in doing so.
The DOJ’s battle against Google unfolds amid a rapidly evolving tech landscape, with Verveer’s historic precedent lending weight to the government’s pursuit of a more competitive digital sphere.
Source: Yahoo finance