The government sues Amazon, as its Google case gets stuck behind closed doors

Three years ago, a House of Representatives subcommittee on antitrust released a four-hundred-plus-page report that detailed the allegedly anticompetitive practices of the four major digital platforms—Google, Amazon, Apple, and Meta (then known as Facebook)—and called on the Department of Justice to take action. A few weeks later, the government did exactly that, filing a landmark antitrust lawsuit against Google in which it alleged that the company engaged in various anticompetitive practices, including a multibillion-dollar deal that made Google the default search engine on Apple phones. As I wrote for CJR at the time, some observers saw the suit as an attempt by William Barr, then the attorney general, to make the Trump administration look tough on tech; others saw it as correcting what many believed to be the antitrust failures of the past two decades. But many analysts also foresaw a legal quagmire, arguing that the case was likely to be substantially weaker than the federal government’s landmark antitrust action that put the brakes on Microsoft in 1998.

The Justice Department continued to build its case against Google under the Biden administration, and last month the case arrived in court. According to the suit, Google—which has a market value of almost two trillion dollars—controls more than 90 percent of the online search market. (Its dominance of the search advertising market is the subject of a separate lawsuit that has yet to reach trial.) The Justice Department intends to prove that Google has abused this search monopoly in order to harm its competitors and that the company has maintained the monopoly through illegal means. (For more details of the arguments, read my newsletter previewing the case just as it was getting underway.)

Observers have compared the Google lawsuit and the 1998 case against Microsoft on various substantive grounds. But legal experts have pointed to one striking difference between the two: whereas the Microsoft trial—including video testimony and other documents—was open to the public, the Google trial has been shrouded in a high level of secrecy. As Caitlin Vogus described it for the Freedom of the Press Foundation, a nonprofit advocacy group, Amit Mehta, the judge hearing the Google case, has already imposed measures limiting transparency—including the sealing of documents and testimony, asking the Justice Department to remove exhibits that were presented in court from the public internet, and the refusal to provide the kind of audio broadcast used in the Microsoft trial.

The Freedom of the Press Foundation and other advocacy groups, such as the American Economic Liberties Project, argue that the court has caved to the demands of Google, Apple, and other tech companies, claiming that they have convinced the judge that greater transparency could reveal their trade secrets or otherwise embarrass them by generating “clickbait.” Because of the restrictions that Mehta has imposed, information about the proceedings is now limited to a small group of reporters, as well as a few bloggers and other interested observers, including a law student whom the AELP hired to write for Big Tech on Trial, a newsletter dedicated to the case that was started by Matthew Stoller, the director of research for the AELP.

The lack of public information about the trial has already created some confusion about the specifics of the case. In addition to bloggers writing for tech newsletters, Megan Gray—a former official with the Federal Trade Commission and former executive with DuckDuckGo, a search engine that competes with Google—has also been a regular observer of the case. Last week, Gray wrote an op-ed for Wired magazine based on a slide from an internal Google presentation that was put forward in court. According to Gray, the slide proved that Google inserted brand names into users’ search queries, in order to generate more advertising revenue for itself. Google, however, complained that the article was inaccurate, and Wired ultimately took Gray’s piece down and added a note saying that after reviewing “relevant material provided to us following its publication,” the editors decided that the story did not meet Wired’s editorial standards. (An archived version of the op-ed still exists.)

In a series of recent posts on X (formerly Twitter), Gray acknowledged that she might have misinterpreted the Google slide, in part because—as she put it in her now-deleted op-ed—”spectators like myself have only a few seconds to scribble down the contents of exhibits shown.” However, in her X posts and in comments to Charlie Warzel, of The Atlantic, Gray stood by her central argument, which is that the “Google Search team and Google Ad team are working together to turn non-commercial queries into commercial queries, which hurts users and advertisers.” Google’s rebuttal, she argued, isn’t a “slam-dunk.” She added, citing her experience at the FTC, that no one should “ever take Google at face value.”

Whatever the specific facts around the slide that Gray wrote about, Warzel noted that the blurring of search and advertising, and the way that this affects our online behavior, is at the heart not just of the Google case, but of other federal antitrust actions. “For most of us, evidence about Big Tech’s products tends to be anecdotal or fuzzy—more vibes-based than factual,” Warzel writes. Google may not be altering billions of queries in the manner that Gray’s op-ed suggested, he adds, “but the company is constantly tweaking and ranking what we see, while injecting ads and proprietary widgets into our feed, thereby altering our experience.” While the Justice Department still needs to prove that such behavior is illegal, as Warzel sees it, the fact that a case has been filed at all reinforces the sense that we are all being taken advantage of by “dark patterns” of Web design.

Google isn’t the only current target of the Biden administration’s antitrust regulators: last week, the FTC and seventeen states filed a similar case against Amazon, alleging that the company uses anticompetitive tactics in order to preserve its market power and profit margins. According to a report in the Wall Street Journal, the suit alleges that an Amazon algorithm called Project Nessie monitored the prices of goods across the Web, in an attempt to determine whether competitors were matching Amazon’s prices. If they were, the complaint says, Amazon would then hike prices in the hope that its competitors would do likewise. An anonymous source familiar with the program told the Journal that the company made more than a billion dollars in revenue by using the algorithm. An Amazon spokesperson told the Journal that the lawsuit “grossly mischaracterized the tool,” and that Nessie was merely intended to keep prices from falling to unsustainable levels.

Warzel, paraphrasing the FTC’s allegation, wrote that Nessie “demonstrates the sheer scope of Amazon’s power in online markets”; the project, he added, “arguably amounted to a form of unilateral price fixing, where Amazon essentially goaded its competitors into acting like cartel members without even knowing they’d done so.” Such behavior would betray “an astonishing form of influence, powered by behind-the-scenes technology,” Warzel wrote. It could also help the FTC get around one of the defenses that tech giants typically rely on in antitrust cases, which is that their services are either free or cheap, and that, as such, consumers are not harmed by using them. As I explained recently, antitrust law in the US is based not on whether a company has a monopoly, but whether it obtained or maintained that monopoly by anticompetitive means—and the primary measure of harm has traditionally been whether such behavior resulted in consumers’ paying higher prices. In 2018, for example, the Supreme Court found that American Express engaged in anticompetitive behavior but was innocent under antitrust laws, because consumers benefited from its actions.

The Journal writes that the lawsuit against Amazon marks a milestone in the Biden administration’s “aggressive approach” to enforcing antitrust laws, and credits that approach to Lina Khan, the chair of the agency, a longtime critic of Amazon who wrote in the Yale Law Journal in 2017 that both federal regulators and the courts have dropped the ball when it comes to prosecuting monopolists. The Journal also notes, however, that Khan has had some difficulty convincing the courts of the validity of her arguments: the FTC tried to block recent acquisitions by Meta and Microsoft and failed to meet the burden of proof in either case. Not to be dissuaded, the FTC sued Meta in 2021, claiming that the company has a monopoly on social media and should be forced to sell WhatsApp and Instagram. A trial date in the case hasn’t been set, but it is expected to begin next year.

Whether the Amazon and Meta cases will involve the same kind of secrecy as the Google case remains to be seen. But the lack of transparency in the Google case has rubbed some seasoned legal observers the wrong way. Tim Wu, a law professor at Columbia University who has also worked as an antitrust adviser to the Biden administration, told the New York Times that there is an irony in Google’s attempts to limit disclosure. “It’s ironic for a company to suck up all our information and know everything about us and we can’t know a damn thing about them,” Wu said. “We deserve a better look at them.”

Other notable stories:

• Vanity Fair’s Joe Pompeo and CNN’s Oliver Darcy profiled the relatively few reporters for Western news organizations who are based full-time in Gaza and are currently putting their safety on the line to cover the Israeli siege of the territory. Yesterday, as the conflict entered its fifth day since Hamas attacked Israel on Saturday, misinformation continued to circulate online, including a widely shared claim that the US was evacuating its embassy in neighboring Lebanon, which the embassy was forced to debunk. Meanwhile, Barak Ravid, of Axios, reported that nearly half of Israeli households tuned in as President Biden gave a speech expressing solidarity with the country. And Kan, the Israeli public broadcaster, confirmed that Ayelet Arnin, one of its news editors, was among those killed in the Hamas massacre at a music festival. She was twenty-two.
• On Tuesday, Patty Stonesifer, the interim CEO at the Washington Post, informed staffers that the paper would be cutting two hundred and forty jobs, and that it hoped to do so by offering voluntary buyouts. Yesterday, staffers learned more about the proposed cuts, which will fall equally on the business and editorial sides of the paper; on the latter score, the Metro desk will be hit particularly hard. Stonesifer told employees that the cuts were necessary because the Post premised its recent growth on overly rosy financial projections, but denied that the paper’s business is on unsound footing. When a staffer took Jeff Bezos, the billionaire owner, to task over the cuts, Stonesifer insisted that he is open to further investment. The Post’s Elahe Izadi and Will Sommer have more.
• Felicia Sonmez, a reporter who was fired by the Post amid a social media controversy last year, has a new job covering growth and development at Blue Ridge Public Radio, in Asheville, North Carolina. In other media-jobs news, Paul Beckett, the DC bureau chief at the Wall Street Journal, will take on a full-time role focused on securing the freedom of Evan Gershkovich, the Journal reporter who was jailed in Russia earlier this year. (“Let’s hope it is a short-term assignment,” Beckett wrote.) And Cenk Uygur, the founder of the progressive media channel The Young Turks, will challenge Biden for the Democratic presidential nomination as a “proxy” for Biden’s liberal opponents; Semafor has more.
• Jozef Síkela, the Czech energy minister, took aim at Daniel Křetínský, a billionaire with interests in the energy and media sectors, suggesting to the Financial Times that a paper owned by Křetínský attacked the government for acquiring a pipeline business because Křetínský’s firm had also wanted to buy it. Síkela warned that Křetínský could try similar tactics in other countries—he owns several titles in France (though he recently divested from Le Monde) and is reportedly interested in acquiring the Telegraph in the UK—though his companies rejected any insinuation of editorial interference.
• And, after a variety of high-profile journalists were spotted earlier this year at the wedding of Britain’s right-wing former finance minister and his former top aide (who also once worked at the BBC), Politico’s Annabelle Dickson explored the appropriateness of many British political journalists’ being friends with the people they cover. Reporters’ befriending people on their beats is a “fact of life,” the journalist James Ball told Dickson. “But that doesn’t necessarily mean that we can’t do more about them than we do now.” 

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