No action looms larger than the Justice Department’s next move in the antitrust case it won challenging Google’s efforts to maintain a monopoly in search. In a court filing due Wednesday, the department is preparing to ask a judge to consider structural changes to Google’s business. Google would have to divest its Chrome browser or Android mobile operating system if it doesn’t limit how it ties its ubiquitous mobile products to the use of its search engine, according to a document seen by The Wall Street Journal.
It also would be forced to stop paying partners such as Apple billions of dollars a year to make Google’s search engine the default on web browsers, the document shows.
Google has said that spinning off Chrome and Android would harm those products, which are offered free to users. “The government putting its thumb on the scale in these ways would harm consumers, developers and American technological leadership,” said Lee-Anne Mulholland, Google’s vice president of regulatory affairs.
The department’s antitrust division also is preparing a possible legal challenge to Hewlett Packard Enterprise’s $14 billion bid for Juniper Networks, people familiar with the matter said. The division held a meeting with top company officials last week to lay out the government’s concerns, the people said. Such meetings are typically a company’s final chance to try to head off a lawsuit. No final decision has been made.
HPE and Juniper said the deal is procompetitive. The firms are working “to obtain the necessary approvals for this deal,” HPE said.
Just down Pennsylvania Avenue, the Federal Trade Commission, which shares antitrust authority with the department, is laying the groundwork to open an investigation into Microsoft’s cloud business and other practices, according to another person familiar with the matter. The probe among other things will examine whether Microsoft’s agreements prevent cloud customers from considering alternatives.
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The Justice Department is preparing a possible challenge to Hewlett Packard Enterprise’s bid for Juniper Networks. Photo: Justin Sullivan/Getty Images
Microsoft declined to comment. The Financial Times earlier reported the FTC’s planned scrutiny of the company’s cloud business.
The flurry of activity comes as Biden appointees Lina Khan, who chairs the FTC, and Jonathan Kanter, the Justice Department’s antitrust chief, are facing the end of a progressive enforcement experiment they hoped would last longer. The pair came to office with plans to be more aggressive than administrations of recent decades by blocking a broader range of mergers and challenging what they viewed as monopoly abuses at the nation’s largest companies.
“They didn’t have enough time to do it,” said William Kovacic, a George Washington University law professor and former FTC chairman. “There is reason to doubt their successors will continue on the path they tried to lay out.”
It isn’t clear how much of the new activity will be embraced once Donald Trump returns to the White House. The next administration is likely to retreat from the most controversial elements of the liberal approach, especially on merger enforcement, though bipartisan angst against tech and healthcare companies could mean those industries continue to face heavy scrutiny.
Before she steps down, Khan also wants to deliver a report aimed at revealing what advantages companies such as Microsoft receive in exchange for their investments in artificial-intelligence startups, according to people familiar with the matter. The FTC, which is concerned Big Tech firms could dominate the AI space, earlier demanded records from Microsoft, Google-owner Alphabet and Amazon about their investments in OpenAI and Anthropic, startups that are building AI models designed to match human intelligence.
Khan is celebrated by progressives for her criticism of Amazon, a company the FTC sued last year for allegedly monopolizing e-commerce. Kanter’s Justice Department, however, filed more lawsuits accusing firms of illegally monopolizing markets, suing Google (for a second time), Apple, Ticketmaster-owner Live Nation and Visa.
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FTC Chair Lina Khan has aimed to stop Big Tech from expanding into new industries or gobbling up its suppliers. Photo: Reuters
“I think the most lasting thing from us will be our litigation and our case victories,” Kanter said in an interview last week.
All of the monopoly cases will be inherited by Trump’s team. It is possible many of them could survive. The first Trump administration originally brought the search case against Google, and it ran out of time before it could file a second case that Kanter later brought challenging the company’s practices in brokering digital ads. Visa and Ticketmaster likewise drew scrutiny during the earlier Trump term.
Wall Street expects the next administration to be less antagonistic toward deals, although how the antitrust agencies approach mergers could differ by sector and industry. Oil companies and private-equity firms, historically closer to Republicans, are poised to get relief from the tough review of deals that Khan and Kanter delivered.
The Biden appointees at times filed lawsuits against mergers that looked beyond traditional legal theories. Their toughest cases targeted acquisitions that didn’t involve direct competitors.
Khan for example wanted to stop Big Tech from expanding into new industries or gobbling up its suppliers. Those proved to be difficult cases, and she failed to win them. Courts denied her bid to block Microsoft from acquiring videogame giant Activision and Facebook-owner Meta from buying a virtual-reality company, Within Unlimited. A court also turned back the Justice Department’s lawsuit to stop UnitedHealth Group from buying Change Healthcare, a technology company that helps insurers decide which claims to pay.
“The stuff they wanted to accomplish that would shift the law, they didn’t do,” said Daniel Crane, a law professor at the University of Michigan.
The Biden administration last year put out new guidelines that signal the kinds of deals it considers problematic, hoping the courts would adopt them. It is possible those guidelines could be withdrawn during Trump’s second term.
“I wish they had a higher batting average, but I’m glad they took those shots,” said Sandeep Vaheesan, legal director of Open Markets Institute, which backs tougher enforcement.
The department blocked, for the first time, airline deals while Kanter was in power. It prevailed in a trial over JetBlue’s proposal to buy Spirit Airlines. In a separate case, a court sided with its argument to unwind American Airlines’s partnership with JetBlue, finding the arrangement suppressed competition in key Northeast markets.
In the publishing industry, the department won a case that blocked Penguin Random House from acquiring rival book publisher Simon & Schuster, based on the theory that the deal would hurt bestselling authors.
“Our job is to address the mergers that are filed with us, and take action when we think there is a basis to do so,” Kanter said. “The fact that courts agreed with our approach speaks volumes.”
Khan is still waiting on a court in Oregon to decide the fate of one of her marquee merger lawsuits, which seeks to block Kroger from acquiring grocery rival Albertsons. That is the kind of case, involving large firms that compete head-to-head, that the government often wins.
Democrats who supported Khan and Kanter say it won’t be easy for the Trump administration to entirely abandon the recent approach to antitrust enforcement, because the Biden officials made headway on popularizing the issue by making it part of the wider debate about inequality and corporate power.
“The past three and a half years have created so much change,” Sen. Elizabeth Warren (D., Mass.) said in an interview. “The nonenforcement of antitrust laws that was the norm for four decades is dead.”
Lauren Thomas contributed to this article.
Write to Dave Michaels at [email protected]
