Next Round in Net Neutrality - Antitrust Law Suits?

By partyofone Posted in User Blogs — Comments (6) / Email this page » / Leave a comment »

Google has taken a new tack in the net neutrality wars. It is now warning the telcos that if they misuse their monopsony positions to interfere with the services of competitors, it stands ready to pursue antitrust actions.

See Reuters Story Here

The kind of antitrust action they seem to be talking about, which involves leveraging monopoly or monopsony power in one market to get an advantage in another, is a tough claim to win. Antitrust law has changed since I was expert in it ten years ago, but back then, at least, it was far from clear that you could win such a claim even if a monopolist flat out admitted that they were trying to leverage monopoly power to disadvantage competitors in a different market.

In the story, they threaten to go talk to the DOJ antitrust division. As threats go, that's a pretty empty one. The DOJ antitrust folks might or might give them a meeting, but historically that group has been a highly professional office, and they certainly are not going to bring suit on Google's say so. Even if the staffers see a real problem, it's far from clear that in this administration higher level support and resources will be forthcoming.

Of course, Google might be suggesting that they stand ready to bring private actions if they spot violations. That would require Google being injured by the telco's actions, which is not a given even if the telcos start selling preferential access.

If Google and the telcos tee off in court, a generation of antitrust lawyers will be able to start pricing the yachts and ski lodges they have been coveting. If Google gets any traction at all, a case like they threaten easily employ dozens, if not hundreds, of lawyers for years if not decades.

Google's threat is a reminder how far this particular market is from being a free market - with the regulatory overlay, with the monopoly and monopsony aspects - the battle is more likely to be fought and decided at a variety of governmental and judicial levels than in anything resembling a market.

If it turns into an antitrust brouhaha, I wouldn't rule out regulators in the EU looking for a way to get involved, even if the preference only involves the last mile pipes on US soil. The Europeans did not apply as extensively the economic insights brought into US antitrust law by the likes of Bork, Posner and Easterbrook, and have been receptive to emotionally appealing but economically less provable theories such as monopoly leveraging claims.

There is another option isn't there? by Neil Stevens

Google could find users who get injured by these monopoly providers, and help them get a lawsuit going. Just create some legal aid entity and dump money into it, ready to fire up some class action mania.

Or am I wrong on this?

Reply To This — User Info — #1

Microsoft case by zuiko

The case here is a much better, once you have baby bells shutting off, or rendering unusable through performance reductions, 3rd party VoIP services. Or cable companies doing the same thing with VoIP and VoD. Services they just happen to sell themselves, of course.

The Microsoft case hinged upon a bogus definition of the marketplace to define them as a monopoly. They were not. They also didn't harm consumers at all. The same can't be said about telcos and cable companies. Their whole agenda is to protect their existing monopoly by rendering the competition inoperable. Where did Microsoft do anything like that?

The real reason the telcos are safer than Microsoft is that the telcos have been paying their protection on time since the beginning of time, while Microsoft did not until it was too late.

Reply To This — User Info — #2

Dunno about that by partyofone

First of all, Microsoft was basically a tying case, which, while tough enough, is easier than what would have to be alleged here. I could be wrong, but based on what I'm reading, the telcos are not proposing to do anything as crude as tying.

Second, Microsoft basically walked. The trial judge's verdict got tossed by the DC Circuit, and the Bush administration got rid of the case with a settlement that imposed relatively trivial sanctions on Microsoft.

The case lives on in the EU antitrust world, but I think I mentioned that the EU approaches antitrust significantly differently.

The one thing the Microsoft case does show is the potential for lawyers to grow fat and happy off such cases.

Reply To This — User Info — #3

Professional? by HaroldHutchison

I'd think Microsoft would beg to differ...

Reply To This — User Info — #4

Basically Right by partyofone

Google could do that.

There are some ethical constraints that they would have to take into account in setting it up (problems can arise when the person paying the lawyer has a different agenda than the actual client), but if they set up an adequately funded nonprofit to do cause litigation, it could work.

Reply To This — User Info — #5

Let's not forget by jonlester

that we got the terrible Windows M.E. operating system entirely because Microsoft needed to make its legal expenses back. I think all of us could have waited another year using Windows 98 before XP was ready.

Reply To This — User Info — #6

Redstate