Financial Times: Big Tech collaborates to conquer

October 25, 2020 Media

It’s finally happening. The US Department of Justice has taken on the antitrust case of our time, accusing Google of illegally protecting its 92 per cent share of the global search market. Key evidence includes deals cut with Apple and other Big Tech groups to lock-in the search engine as the default option across devices and platforms. The DoJ is alleging that Google and Apple teamed up to maintain dominance. That makes perfect sense to me as there’s a paper trail of behaviour going back over a decade to suggest exactly that.

Consider the 2011 class action lawsuit that laid out in documents how, in 2007, Apple founder Steve Jobs (then the company’s chief executive) called Google to complain that a recruiter was trying to hire one of his software engineers.

Eric Schmidt (Google CEO at the time) then emailed his company’s human resources department saying, “I believe we have a policy of no recruiting from Apple . . . Can you get this stopped and let me know why this is happening? I will need to send a response back to Apple quickly.” Mr Schmidt added that he would respond “verbally, since I don’t want to create a paper trail over which we can be sued later.”

It turned out that a group of large tech companies had put in place “no call” agreements to avoid having their top talent poached by one other. Numerous antitrust lawyers, and both Republican and Democratic Congressional aides, have pointed out to me that employment cartels are the sort of thing that people can be sent to jail for. But Barack Obama’s administration settled without seeking a penalty. Google, Apple and other groups implicated in the scandal, including Adobe and Intel, later agreed to pay $415m in damages to 64,000 employees in a settlement.

It’s “an ecosystem of mutual benefit,” says Columbia University law professor Lina Khan, who helped draft the House report. To me, this ecosystem mirrors the industrial trusts at the turn of the 20th century in which oil, steel and railroad tycoons often worked together to protect their interests.