Your trusted source for the latest news and insights on Markets, Economy, Companies, Money, and Personal Finance.
Popular

Google Hires Experienced Lawyer to Defend Against Antitrust Allegations

When the government started an antitrust investigation into Google, one of the company’s top lawyers, Kent Walker, said the solution was not a charm offensive. Google just needed to explain how its business functioned.

It was 2009, and the Federal Trade Commission was assessing whether Google had rigged technology markets in its favor. Mr. Walker’s plan worked. The company agreed to a few small business practice changes in a 2013 settlement and maintained its search engine dominance for another decade.

Now, Google and its parent company, Alphabet, are facing their most significant legal challenge. They are preparing to face off next week in federal court against the Justice Department and a collection of states, which claim the tech giant illegally abused its monopoly power to keep its search engine on top.

The Justice Department has argued that Google illegally used agreements with phone makers like Apple and Samsung, as well as internet browsers like Mozilla, to be the default search engine for their users, preventing smaller rivals from getting access to that business.

The court fight — the most important antitrust case since the Justice Department took on Microsoft 25 years ago — strikes at the heart of Alphabet’s $1.7 trillion empire and could strip power and influence away from the world’s most successful internet company.

If Google loses and a judge then approves remedies, it could eventually be forced to restructure in some way, and it could be hit with enormous fines and a prohibition on search distribution deals. That would translate to fewer users, deflated profits and perhaps even limits on how Google is able to innovate with new technologies like artificial intelligence.

To fend off the regulators’ claims, Google needs to convince Judge Amit P. Mehta of U.S. District Court for the District of Columbia that Google’s decades of dominance are due to its superior product, not abusive tactics.

The company is counting on Mr. Walker, 62, once again. Since being hired as Google’s general counsel in 2006, Mr. Walker has been an architect of the company’s legal strategy, overseeing a victory in a protracted courtroom showdown with rival Oracle and a case that could have held Google liable for users’ social media posts. Both legal fights went to the Supreme Court.

That Mr. Walker is defending an industry giant against the monopoly claims of regulators is an odd turnabout in his long career. He grew up in Palo Alto, Calif., in the heart of Silicon Valley, and graduated from Harvard and Stanford Law School. Starting in 1990, he spent five formative years at the Justice Department, where he worked on the prosecution of Kevin Mitnick, once the most wanted hacker in the country.

In 1997, Mr. Walker began a pivotal four-year tenure at the pioneering internet company Netscape as deputy general counsel, bringing him into the landmark antitrust proceedings against Microsoft. The Windows company was accused of bundling its products together to snuff out other web browsers, including Netscape’s Navigator.

In a recent interview, Mr. Walker argued that he is still fighting for the same thing — that consumers should have easy access to the services they like the most. He discussed the case in societal terms, framing it as a battle over how much innovation is permissible under American antitrust law and a fight that will have “important implications for the tech sector.”

Mr. Walker has dozens of in-house lawyers and hundreds of other employees helping on the antitrust case, he said. Google has also hired three law firms to take the lead on the litigation.

John E. Schmidtlein, an experienced antitrust lawyer and a partner at the law firm Williams & Connolly, will lead Google’s courtroom defense. Wendy W.H. Waszmer, a partner at Wilson Sonsini Goodrich & Rosati, will also argue for Google in court. They will have three weeks to make their case after the Justice Department and attorneys general from 35 states, the District of Columbia, Puerto Rico and Guam make theirs.

The company contends that it faces stiff competition from a number of alternative services where consumers can find products and information online, including Amazon and TikTok.

Google also argues that its partnerships with companies like Apple and Samsung are lawful and that consumers can change their default search engine in five or fewer steps on these phones. The company will also point out that when users open a Safari browser on an iPhone, they can see quick links to a variety of other services besides Google, including Microsoft’s Bing search engine and Wikipedia.

The search giant will also seek to undermine the premise of the Justice Department’s suit, claiming that the government has used antitrust law in a novel way to punish the company because of its popularity.

“American law should be about promoting benefits for consumers: that’s lower price, that’s more innovation, that’s more opportunity,” Mr. Walker said. “If we move away from that and make it harder for companies to provide great goods and services for consumers, that’s going to be bad for everyone.”

Gregory Rosston, Stanford’s public policy program director, said both sides would argue about whether the search market would be more competitive if Google did not have default-search agreements.

“Google is going to argue Apple had no interest in developing a search engine,” Dr. Rosston said. “They do search in Siri and other things, but they’re not very good at it. The government is going to say, well, they could have done it or they could have done a deal with Bing or some other start-up search engine, and maybe people would have done more searches with those.”

“Generally, antitrust laws take a dim view of agreements between competitors to divide up or not enter a market,” he added.

For nearly two decades, Google executives have depended on Mr. Walker to protect the company from high-stakes litigation. But at times, Mr. Walker has also had to simply explain how the legal system works. Harry Litman, a friend and former Justice Department colleague of Mr. Walker, recounted a story he shared at a reunion for U.S. attorneys several years ago.

Mr. Walker was in a meeting with Google’s co-founders, Larry Page and Sergey Brin, discussing a spate of lawsuits around the world, Mr. Litman said. One of the co-founders asked: Why can’t we have a single judge in every country who would get up to speed on the internet and oversee lawsuits against us?

Mr. Walker “was chuckling about his job, having to explain to these extremely rational people why the law doesn’t always work in such a rational way,” Mr. Litman said.

Despite what colleagues and friends describe as Mr. Walker’s Boy Scout persona, his team can be known for hardball tactics, legal opponents say. David Boies, who successfully prosecuted Microsoft for the Justice Department more than 20 years ago, said Google failed to produce documents, denied all liability and fought for every inch.

Mr. Boies is suing Google in two civil cases, including one that accuses the company of tracking users without their knowledge while in its web browser’s Incognito mode. He said he had gotten sanctions against Google twice, including a million-dollar penalty, for failing to deliver relevant evidence.

“They hold the ground until it breaks,” he said. “They don’t bend.”

Share this article
Shareable URL
Prev Post

Reimagining Economic Policy: Conservatives Tackle Inequality

Next Post

3 Top-Performing Stocks to Invest In During September

Leave a Reply

Your email address will not be published. Required fields are marked *

Read next
The F.T.C. sued to dam the largest grocery store merger in U.S. historical past. The regulator moved to dam…
Bob’s Pink Mill Pure Meals was based in 1978, but it surely wasn’t till a number of years later that the…