One-time allies in antitrust part ways over Google

In the digital economy, 14 years is an eternity. Fast-shifting technology means that companies, once feared and seemingly invincible, fade, while new powers rise to dominance, raising fresh sets of concerns.

Exhibit A: In the spring of 1998, the federal government and 20 states filed a landmark antitrust suit against Microsoft. A few months later,Google was founded.

Now Google is the subject of major antitrust investigations in the United States and Europe. In the United States, regulators are expected to announce a decision within days to sue or settle, and under what terms. The European decision will come soon as well.

Much has changed over the years, but two lawyers who helped build the case against Microsoft are playing important roles once again. But this time, Gary L Reback and Susan A Creighton are on opposite sides.

The two lawyers, and the positions they have taken, point to some striking similarities yet also significant differences between the two high-stakes investigations — and why the pursuit of Google has proved challenging for antitrust officials.

In 1996, Reback and Creighton were partners, representing Netscape, the pioneering Web browser company. They wrote a 222-page “white paper,” laying out Microsoft’s campaign to use its dominance of personal computer software to stifle competition from Netscape, the internet insurgent. After Netscape sent their report to the Justice Department, the head of the antitrust division ordered an investigation.

Reback is now an attorney at Carr & Ferrell in Silicon Valley, where he represents several companies that have complained to the government about Google. He does not represent Microsoft, though that company is a born-again champion of antitrust action, against its rival Google.

In Google, Reback sees a familiar pattern — a giant company trying to hinder competition and attack new markets. Google, he says, is unfairly using its dominant search engine to favor the company’s offerings in online shopping, travel and local listings and thus stifle competition from Web sites that rely on Google search for traffic.

“From my perspective, it’s an instant replay of the Microsoft case,” Reback said in a recent interview, though he would not comment for this article. “It’s the same playbook.”

Not to Creighton, a partner in the Washington office of Wilson Sonsini Goodrich & Rosati, who is in Google’s corner. She has testified before Congress on Google’s behalf and negotiated with the Federal Trade Commission, the agency conducting the antitrust investigation, and where she was a senior official during the Bush administration.

“Google’s conduct is pro-competitive,” Creighton declared in her Senate testimony last year. “Far from threatening competition, Google has consistently enhanced consumer welfare by increasing the services available to consumers.”

Creighton hits two main themes in Google’s defence. The first is the consumer benefit of all Google’s free services. The second is that the cost to consumers of switching to Internet alternatives like Microsoft’s Bing search engine, the Expedia travel site or Yelp local listings is “zero,” she said. Or, as Google repeatedly says, competition is “just a click away.”

© 2012 The New York Times News Service