Congress on the Sidelines as U.S. Takes on Google

WASHINGTON—The Justice Department lawsuit against

Alphabet Inc.

unit Google seeks to achieve in court what some in Congress have tried and failed to do: curb the power of America’s largest technology companies.

Tech companies spent heavily last year to successfully block major technology legislation, and that winning streak is expected to continue as Washington transitions to two years of divided government. 

With Republicans now in control of the House, compromise on any legislation will be a steeper climb, especially when it involves some of America’s most valuable and influential companies. 

While many lawmakers are concerned about tech giants’ increasingly central role in America’s economy and discourse, they often diverge when it comes to defining the government’s role in policing online speech or digital-market competition. 

That legislative impasse has made the executive and judicial branches of government the principal battlegrounds between Washington and Silicon Valley, with Google at the center of the action. 

“Over the next two years, courts and the executive branch will likely take the lead in shaping the future of tech policy, alongside states and international governments,” said

Matt Perault,

a policy adviser at equity research firm New Street Research. “Congress has had an ambitious agenda for reforming tech regulation, but the chances of passing legislation are extremely small, and it will get even harder in a divided Congress.”

The Justice Department lawsuit filed Tuesday seeks to break up Google’s lucrative business as a broker of digital advertising on the grounds that the company has illegally monopolized the ad technology market. Google said the lawsuit relies on a flawed picture of the competitive advertising market. 

And next month, the Supreme Court will hear arguments in a case targeting Google’s YouTube that challenges the liability shield internet platforms enjoy for third-party content. The plaintiffs say that platforms shouldn’t be protected when they recommend harmful content. Google says that approach could force websites to tighten censorship or allow harmful content to proliferate. 

More challenges may lie ahead. When President Biden in a Wall Street Journal op-ed called for a congressional compromise on tech regulation, he said his administration “has been hard at work putting these principles into practice, to the extent that existing laws let us.” 

He called out commercial data privacy rules under development at the Federal Trade Commission and a “significant funding boost” recently secured for antitrust enforcement by the Justice Department and FTC.  

The Justice Department also has probed

Apple Inc.

over antitrust concerns. The FTC is waging a monopolization lawsuit against

Facebook

owner Meta Platforms Inc., seeking to block a major merger by

Microsoft Corp.

, and pursuing an antitrust investigation into

Amazon.com.

Inc.

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Congress has tried repeatedly in recent years to rein in Big Tech’s power. The Competition and Transparency in Digital Advertising Act, a bipartisan bill introduced last May, would prohibit the owner of a large digital-advertising business from controlling multiple parts of the market, effectively breaking up Google’s ad technology business. 

Some lawmakers remain optimistic that the legislation has a shot, including Rep. Ken Buck (R. Col.), a sponsor in the House.

 “We have a good bipartisan coalition of members who recognize the role of antitrust law” in addressing concerns about tech giants, Mr. Buck said. 

But a big potential obstacle is House Speaker Kevin McCarthy (R., Calif.), who has criticized antitrust legislation targeting large technology companies. A spokesperson for Mr. McCarthy didn’t immediately respond to a request for comment.  

Sen. Mike Lee (R., Utah) wants uniform rules that promote fair play.



Photo:

Anna Moneymaker/Getty Images

Sen.

Mike Lee

(R., Utah), who introduced the digital-advertising bill in the Senate last year, said in a statement Tuesday that even if the lawsuit against Google succeeds, “Congress must act to ensure that the same rules of fairness and competition apply to all market participants and benefit all consumers. We can’t allow one monopolist to replace another.”

In addition to the digital-ads bill, a broader bill targeting self-dealing by large tech companies also failed during the last Congress. It would have barred large tech platforms such as Amazon’s marketplace or Google’s search engine from promoting their own products and services over those of competitors. The bill cleared two House and Senate committees in bipartisan votes.  

Without a change in law, cases such as the one announced Tuesday will be harder for the government to win in court, said

Paul Gallant,

a policy analyst with brokerage

Cowen Inc.

Efforts such as the FTC’s privacy rules also face likely legal challenges. 

Nevertheless, he expects those rules to be forthcoming, along with antitrust cases against Amazon and Apple. “For the next couple of years,” he said, “I think the administration is tech’s biggest risk.” 

John D. McKinnon contributed to this article.

Write to Ryan Tracy at [email protected]

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