Once upon a time, frivolous litigation was something conservatives of almost all stripes vociferously opposed.
Fast forward to 2020, however, and it has become the favorite tool of many self-styled proponents of the free market. As more conservatives evolve into anti-tech populists, these lawsuits are being targeted at American tech companies to extract political concessions.
Aside from being petty political maneuvers, these suits are disastrous policies with potential long-term consequences. These lawsuits will cost taxpayers at all levels of government millions of dollars.
The recent omnibus/stimulus bill gives both the Department of Justice (DOJ) and Federal Trade Commission (FTC) a combined $38 million boost, in a preview of how much these suits will cost states as well.
Google has been a particularly popular target as of late. In October, the DOJ filed a lawsuit against the tech giant, vaguely alleging anticompetitive behavior.
Recently, Texas (along with eight other states) sued complaining about Google’s dominance in the online advertising market. Finally, a coalition of 35 states — plus Guam, Puerto Rico, and Washington, D.C. — filed a suit very similar to DOJ’s allegations.
The DOJ lawsuit attempts to paint Google as a “monopoly.” However, this could not be further from the truth. While Google certainly holds a lion’s share of the online search market, it has been steadily declining since late 2018.
Google faces very real competition from companies like DuckDuckGo and Amazon, where most product-specific searches begin. Google does not lack competitors. Its dominance is a result of providing better, more efficient services to consumers. This is really what suits like the DOJ’s will harm if allowed to succeed.
Texas makes the counterfactual claim that Google is positioning itself to dominate the online ad market as a monopoly. They ignore the fact that digital advertising prices have fallen, not risen. Conversely, in the same suit, Texas also alleges
Google has worked illegally with Facebook to coordinate ad strategies. Google can either be a monopoly or be working hand in hand with its main competitor. However, both statements cannot be true. It is clear Texas is throwing everything at the wall to see what sticks.
This latest 35-state coalition effort to go after Google alleges that Google is seeking to disadvantage its competitors and promote its own products. If that is enough to warrant a lawsuit from roughly two-thirds of the nation’s attorneys general, then most successful businesses in America are in deep trouble.
It should be the goal of any right-minded businessman to implement policies that increase market share at the expense of competitors and to promote their own products. This is hardly a new strategy. Yet, in their rush to ride the wave of anti-big tech fervor, these attorneys general seemed to forget this very basic truth.
The effort to score cheap political points — at great taxpayer expense — during this moment in our nation’s history has dangerous prospects for the future. Lawsuits like these create mountains of uncertainty not only for tech giants like Google, but for upstart competitors as well.
The notion that there is a certain unspoken threshold at which government regulators can declare you a monopoly and sue you will hang over tech entrepreneurs across the nation.
It will greatly disincentivize investment and actually serve to advantage the tech giants themselves. After all, only they have the vast resources to deal with the barrage of fickle lawsuits.
Lawsuits like this also create massive taxpayer burdens as new attorneys are hired by the state or current attorneys are tasked with this frivolous lawsuit instead of bigger and more important issues.
America’s relative hands-off approach to the technology sector has allowed it to become a global leader.
The political grudges of this time should not be used as a pretense to destroy what made America dominant in the first place.
Taxpayers and consumers cannot risk setting precedents that will harm the marketplace and leave the nation wanting.
