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The power of Big Tech to tamp down potential business rivals stretches all the way into the courtroom, a leading antitrust attorney testified before the House Judiciary Subcommittee on Antitrust on Thursday.
John Thorne, a partner with the law firm Kellogg, Hansen, Todd, Figel & Frederick, testified that the Justice Department (DOJ) and state attorneys general lack the resources necessary to effectively enforce their antitrust laws and their cases now pending against Google (GOOG, GOOGL).
“The cases right now against Google are the hardest cases ever litigated in our courts,” Thorne testified, describing the state and federal attorneys handling the lawsuits as great lawyers whose departments are underfunded and underpaid.
“The staff lawyers at DOJ, and the staff lawyers at the Texas Attorney General's Office, and the other states that are in that case, are paid below market, but they are working above market,” Thorne said. “They do not have the same resources that their opponent has.”
Thorne said lawyers working on behalf of the Texas Attorney General requested $43 million from the state’s legislature, solely for the purpose of hiring expert witnesses in what they described as a bidding war. “The answer from the finance chair of the Texas Senate was, “‘I don't think that's gonna be enough money for you. I don't think you can actually win this with that [budget],’” Thorne said.
"Fancy lawyer" needed for individual antitrust case
Another witness, Dr. Hal Singer, managing director for Econ One, told lawmakers that the cards are also stacked against individual players who wish to bring an antitrust case against Big Tech companies, particularly against Amazon, which requires its sellers to arbitrate legal claims individually and outside of court.
“To bring an antitrust case against Amazon, by yourself, you'd have to hire a fancy antitrust lawyer and you'd have to hire a fancy antitrust economist, and just the scale doesn't make sense to bring these claims, individually. And so the system is rigged, effectively, to immunize Amazon from antitrust scrutiny, at least in by private complainants,” Singer said.
Antitrust cases can move faster
According to Thorne, sufficient funding for antitrust cases could ensure they don't drag out so long that they're no longer relevant to consumers. “Closely related to resources is how long it takes to get an antitrust trust case to trial,” Thorne said. “If it takes years to investigate, and then years to get the trial, that's a lot of years the public is denied competition, waiting for law enforcement. I know these cases can move faster because I've seen it done.”
The lawsuits accuse the company of using its monopoly power to exclude rivals from the online search and advertising markets and of improperly entering exclusionary contracts with Apple and other companies that make Google the default search engine on mobile devices; Google is also accused of denying specialized search sites like Expedia (EXPE), Angie’s List, and Yelp (YELP) of “prime real estate” on its search results page.
Facebook is also facing two antitrust lawsuits: one brought by the Federal Trade Commission (FTC) seeking to break it up, and another brought by 48 U.S. attorneys general claiming it violates antitrust law by buying up competitors. The competitive practices of Apple and Amazon remain part of ongoing investigations by federal and state officials.
Alexis Keenan is a legal reporter for Yahoo Finance and former litigation attorney.
Follow Alexis Keenan on Twitter @alexiskweed.