Jennifer Oliver, an antitrust attorney and a certified privacy professional, kicked off the webinar with some background for those of you less familiar with antitrust. Here is a recap of what she had to say. 

Section 7 of the Clayton Act prohibits mergers whose effect may be to substantially lessen competition or to tend to create a monopoly. Most Section 7 suits are filed by the government or private plaintiffs seeking to prevent damage to competition before the damage happens. While there is no allegation of violation of Section 7 in U.S. v. Google, many would argue that Google’s earlier acquisitions have harmed competition or quashed nascent competitors and should have been examined more closely.

The Sherman Act, part of which is implicated in the Google case, is more familiar to attorneys and businesspeople.

Section 2 of the Sherman Act, which is most relevant to U.S. v. Google, says you cannot monopolize or attempt to monopolize a line of interstate commerce through anti-competitive conduct. Contrary to a common misconception, monopolies are not per se illegal which, if you think about it, makes sense: If you invent a new product, you have 100% of the market for that product. Competitors will follow. But the fact of monopolizing a market is not in itself illegal. What is illegal is acquiring or maintaining that monopoly in a defined “relevant market” through anti-competitive conduct. Monopoly power is often measured in terms of the ability to control prices in the relevant market, or to exclude competitors in that market, which often means that smaller rivals can’t reach scale or can’t exercise any sort of price discipline over the monopolist.

How do we define the relevant market? That is an art onto itself in antitrust law, but you must define both product and geographic markets to successfully allege a monopoly exists. The concept of “product substitutes” is very important here, e.g., Would consumers be able to switch to another product if the alleged monopolist raised its prices or otherwise harmed consumers, for example through diminished quality or privacy?

Next we ask whether anticompetitive conduct was used to obtain a monopoly, and/or whether anticompetitive conduct is ongoing to maintain a monopoly. A monopolist may achieve its dominance illegally, while not maintaining its status through anticompetitive conduct, or vice versa. The relevant statutes are very broad and are open to judicial interpretation. Much of the conduct in modern monopolization cases occurs in new markets that didn’t exist when the laws were written. Internet search engines and digital advertising are perfect examples.

While anticompetitive conduct is not explicitly defined by Section 2 of the Sherman Act, caselaw offers examples, including exercising the power to engage in conduct that raises a rival’s costs and pricing below cost to drive rivals out of business.

These are key questions in U.S. v. Google. Does Google have monopoly power, has the relevant market been defined, and has it engaged in anticompetitive conduct? The panel discusses these issues and more.