By William K. Black
July 22, 2018 Bloomington, MN
Trump’s language problems do not end with his double negatives and his endless contradictions of what he has just said or tweeted about Putin’s assault on our democracy. Trump lies about everything, all the time. His lies, however, frequently reveal the greater truth – he lives to betray America, his responsibilities as President, and his base. One classic example is the illegal abuse of monopoly power used against Americans and people globally. Trump has managed to embrace, contemporaneously, polar views on monopoly power – and both views are wrong. That takes some doing. One would think that taking opposite views would help you be right half the time.
Under United States law, the intentional abuse of monopoly power is both illegal and criminal. Our Department of Justice (DOJ) and Federal Trade Commission (FTC) can bring civil suits to stop the abuse and penalize it – including treble damages and orders to reduce greatly the monopoly power. DOJ can also bring a criminal prosecution. In the European Union (EU), such monopoly power abuses are generally only subject to civil sanctions and orders to reduce monopoly power. (Some EU nations criminalize “hardcore” cartel actions.) DOJ can prosecute either, or both, the firm and the officers involved in abusing the monopoly power. EU nations often do not permit prosecutions of the firm even for cartels.
Understanding the concept of abuse of monopoly power requires understanding a subtle aspect of the antitrust laws that is largely the same in the United States and the EU. A firm can lawfully gain monopoly power by having a superior product. Such a dominant firm, however, cannot use that monopoly power to preserve, deepen, or extend that monopoly power. DOJ, for example, successfully proved that Microsoft used its monopoly power from the Windows operating system to extend unlawfully its monopoly power into other software applications. After the DOJ’s 2000 legal victory, however, the incoming Bush administration deliberately gutted any effective remedy order against Microsoft.
The EU antitrust investigation found that Google’s parent (Alphabet) used its monopoly power arising from the Android operating system’s dominance (Android’s operating system runs about 80% of all smart phones) to unlawfully harm software competitors. The EU antitrust authority ordered Alphabet to pay a fine in excess of $5 billion and face additional fines if it failed to end its illegal abuse of its monopoly power.
CEOs order illegal abuses of monopoly power to enrich themselves at the expense of consumers. These CEOs are already exceptionally wealthy, so this is a particularly outrageous example of illegal activity that can cause great harm to consumers and honest competitors. The abuses increase price, decrease quality, and decrease innovation.
The President’s responsibilities include protecting us as consumers and competitors from the unlawful and criminal abuse of monopoly power by firms like Google and Alphabet. The EU’s actions against Google and Alphabet’s illegal conduct should have delighted Trump. Trump believes it is appropriate for him to advise DOJ and the FTC to sue and prosecute particular people and firms, so he should have been urging DOJ and the FTC to prosecute and sue Google and its controlling executives to ensure the end of their abuse of monopoly power. As our readers would have accurately predicted, Trump did the opposite, tweeting:
I told you so! The European Union just slapped a Five Billion Dollar fine on one of our great companies, Google. They truly have taken advantage of the U.S., but not for long!
All humans understand the sweetness of “I told you so.” We all understand why this would be particularly sweet for Trump because he is nearly always wrong about anything other than his base’s willingness to support him even if he murdered his critics in public. The obvious problem is that Trump is lying repeatedly in his tweet. First, he did not ‘tell us so.’ If he had, he would have gleefully quoted himself. What Trump ‘told us’ about the EU was a gargantuan lie. The context was a reporter asking Trump to identify America’s “biggest foe globally right now.” Trump’s first and primary response to that question was “the European Union.”
Second, when the EU enforces its laws against the abuse of monopoly power that does not “take advantage of the U.S.” The EU action against an illegal abuse of monopoly power helped the United States. It helped the people of the United States (consumers) and it helped Googles’ honest competitors. Many of those competitors are U.S. firms and they nearly all do or would sell to American consumers. Google is the entity that has “taken advantage of the U.S.”
Trump conflates “Google” with “the U.S.” to make the absurd claim that the EU’s enforcement of the antitrust laws against Google’s illegal monopoly conduct “take[s] advantage” of “the U.S.” Google is not the United States. When it acts unlawfully in the U.S. or abroad the responsible governments should punish those acts and prevent future unlawful acts. Remember that the EU ordered much larger fines should Google refuse to cease its illegal abuse of monopoly power in the EU. That remedy is highly likely to cause Google to cease those illegal abuses in the EU.
Third, the most important U.S. policy question is whether the Trump administration will act to prevent Google from continuing to take “advantage of the U.S.” through its illegal actions – actions that are criminal in the United States if the EU investigative findings about Google’s actions and its officers’ intent are correct. In any honest administration, the DOJ and the FTC would have welcomed the EU investigation and eagerly sought access to its findings to aid their own investigations of Google’s alleged illegal conduct that took place largely in the U.S. and aimed largely at U.S. consumers and competitors. It would be outrageous if Google were to cease that illegal assault on EU consumers and competitors while remaining free to continue, or even increase, those same illegal and even criminal actions against U.S. consumers and competitors. Trump’s tweet indicates that he supports that outrage.
There is no indication that the DOJ and the FTC are even investigating Google and its senior officers’ alleged unlawful and criminal actions. Trump, 18 months into his term, has left the FTC without a permanent chair of even a quorum. The Obama administration showed weakness in enforcing the antitrust laws in general and its FTC appointees’ refusal to act against what its Competition Bureau’s investigation and analysis found to be Google’s abuse of its monopoly power. Google’s senior executives were notoriously close allies of the Clintons and Obama, but quickly pivoted after Trump’s election to support, though not consistently, Trump.
Fourth, that brings us to Trump’s promise “but not for long.” In context, Trump is claiming he will soon take some action to force the EU to allow U.S. firms (or at least “great” U.S. firms) to commit illegal actions that harm EU consumers and honest competitors with impunity. The ability of powerful firms to commit illegal acts with impunity defines the concept of “the swamp.” Trump, a leading swamp denizen, infamously lied when he promised to “drain the swamp.” Instead, he is trying to extend the U.S. swamp to Europe. The good news is that the “but not for long” Trump threat is a lie. Trump has no power to extort or ability to convince the EU to allow U.S. firms to violate EU law with impunity.
Trump, being Trump, also contradicted himself on antitrust policy within days of his attack on the EU for enforcing its antitrust laws. Trump believes in antitrust enforcement against one company – Amazon – though under Trump’s ‘logic’ it is an even ‘greater company’ than Google. Trump suddenly gets concerned about antitrust when it comes to Amazon due to two Trumpian characteristics – his desire to use U.S. government power to harm his critics and his addiction to lies. Jeff Bezos is Amazon’s controlling owner. Bezos, but not Amazon, owns the Washington Post. The Post has been Trump’s most effective media critic. Trump wants to silence the Post.
Trump’s problem is that he realizes that he has no ability to silence the Post directly. Trump decided, therefore, to attack Amazon – even though it has no ownership interest in the Post. Trump has no understanding even of his own history – even of his own history last week. Trump’s lack of understand (and honesty) led to his tweet gem today in which Trump claimed the Post was an “expensive lobbyist” for Amazon and its “huge antitrust” problem. Trump also repeated his long-debunked lie that Amazon causes grave losses to the U.S. Postal Service – by using the USPS for millions of deliveries. (Amazon materially reduces USPS losses.)
It is Trump, not the Post, who only days ago acted as the world’s most “expensive lobbyist” for Google. He issued his threat against the EU for the sole purpose of extorting the EU to drop its “huge antitrust” fine and allow Google to continue to harm U.S. and EU consumers and honest competitors by continuing to violate U.S. and EU antitrust laws with impunity. Trump’s only real Amazon problem is that vastly more Americans have a positive view of Amazon than Trump.