Tech

Google has few political allies and a history of complaints, so an antitrust case may move quickly, experts say

Jennifer Elias
WATCH LIVE
Key Points
  • The DOJ is better prepared to handle an antitrust investigation into Google than it was with Microsoft, law experts say.
  • Both political parties are skeptical of Google's scale, and the FTC already conducted an investigation into Google's anti-competitive behavior.
  • "I don't know if it's the Trump administration that triggered it exactly but it could have been what broke the dam," said Gary Reback, who helped spearhead the case against Microsoft and has represented some clients who complained about Google.
Google cofounder and Alphabet CEO Larry Page.
David Paul Morris | Bloomberg | Getty Images

News broke Friday that the U.S. Department of Justice is reportedly preparing an investigation into Alphabet's Google for antitrust violations.

Since the news broke, many have compared the Google investigation to a years-long federal investigation into Microsoft two decades ago.

But two antitrust lawyers told CNBC that once the DOJ makes a formal announcement, which could take months, the process will probably move much more quickly than the Microsoft case did.

The DOJ's antitrust investigation with Microsoft kicked off in 1992 and went through several stages before the DOJ sued Microsoft in 1998. In 2000, a district court ordered Microsoft to be broken into two companies, but the ruling was overturned on appeal. Finally, Microsoft and the DOJ settled in 2001, with the government imposing several rules the company had to follow for years.  

From initial investigation to settlement, the ordeal lasted nine years. While Microsoft escaped a breakup, it had to pay billions in fines from follow-on lawsuits from competitors and state governments, and was arguably more timid in its actions in the 2000s because of government scrutiny, paving the way for competitors like Google and Apple to cut into its dominance.

Silicon Valley antitrust lawyer Gary Reback, who spearheaded efforts that led to the government's antitrust case against Microsoft and has worked with some clients who have complained about Google, and Rutgers Law School professor Michael A. Carrier agree that any Google investigation will probably be front-loaded, meaning it will move faster than the Microsoft case.

"Even though this is complicated, I don't know that it's going to be that kind of ordeal," said Reback, referring to the Microsoft case.

That's partly because the FTC already investigated Google earlier this decade. Although it ended the investigation without ordering any penalties, the Wall Street Journal has reported that some FTC officials concluded in 2012 that the company had used anti-competitive tactics with its search engine, such as favoring its own sites in search results and copying information from third-party sites to make its own results better. 

"If they were starting from scratch, it could take years," Reback said, "but they (DOJ) now have more information."

"My sense is that the DOJ would really want to make sure that they can find an antitrust violation rather than just an unease that the company is too big," said Carrier, who specializes in antitrust and IP law.

The two lawyers noted that both sides of the aisle are currently skeptical of big tech, leaving Google without political shelter.

"I've been taking companies to Washington where they've complained about Google for a long time and there were politicians blocking it once, but the blockers aren't there anymore," Reback said. "I don't know if it's the Trump administration that triggered it exactly but it could have been what broke the dam."

Though details of any investigation are still unknown, the attorneys predict the DOJ's target concerns would be in Google's search and advertising businesses as well as its practice of bundling applications. They believe the agency will be silent for several months before announcing any formal investigation or case.

In the meantime, Google investors are right to worry, said Carrier.

"Any time an actor as powerful as the Department of Justice antitrust division is involved, that is something that investors should take into account because it would be a really big deal if they found a case."

Meanwhile, other big tech companies could also come under fire. According to the Washington Post, the DOJ is  divvying up big-tech antitrust duties with the Federal Trade Commission, which is reportedly looking into Amazon.

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