Massive Tech faces a ‘powerful’ opponent in Merrick Garland as attorney basic

As President Joe Biden’s term begins, he’s widely expected to continue a crackdown on America’s tech giants — and experts say his pick for attorney general, Judge Merrick Garland, will be a fair yet tough opponent if he’s confirmed.

Garland, a judge on the U.S. Court of Appeals for the DC Circuit, while not regarded as an antitrust expert, would bring significant antitrust experience to the job that his predecessor didn’t have. He’s written about antitrust law, briefly taught the subject at Harvard Law School, and as a judge, he had an opportunity to weigh in on a number of antitrust cases.

“I think Merrick Garland is a very unique take for this job, from an antitrust perspective,” Carl Hittinger, antitrust lawyer and partner with BakerHostetler, told Yahoo Finance, speaking generally about Garland’s likely antitrust approach but not about particular defendants.

U.S. President Barack Obama smiles after announcing Judge Merrick Garland (L) of the United States Court of Appeals as his nominee for the U.S. Supreme Court  in the Rose Garden of the White House in Washington March 16, 2016.       REUTERS/Kevin Lamarque
U.S. President Barack Obama smiles after announcing Judge Merrick Garland (L) of the United States Court of Appeals as his nominee for the U.S. Supreme Court in the Rose Garden of the White House in Washington March 16, 2016. REUTERS/Kevin Lamarque

Garland, whose nomination for the Supreme Court was famously thwarted in 2016, has a reputation for being moderate. His perspective as a judge will likely spur him to tailor any antitrust claims to those that he thinks the Justice Department can win, Hittinger predicted. And because the U.S. appeals court judge and former federal prosecutor spent most of his career working for the government, Hittinger said he will be largely free of conflicts that would prevent him from involvement in the cases.

“He’s not going to bring cases as attorney general, in whatever area, unless the case has a basis of law, and in fact,” Hittinger said. “I think he will question with all the divisions whether the prosecution they’re bringing is the right one…and his antitrust background is going to come to bear in those decisions.”

Garland’s wealth of experience working for the government could also influence his approach to Big Tech, Global Antitrust Institute and George Mason University law professor Abbott Lipsky, Jr. said.

“He is probably an individual very sympathetic to the law enforcement view of the world, and particularly to the federal law enforcement institutions,” Lipsky said of Garland. “So he will be tough — not tough in the sense of wanting to beat up on anybody, but in the sense of wanting to apply the law fairly and wanting to do it in a practical and thoroughly considered way.”

Big Tech’s fate depends on Garland’s antitrust chief

Harry First, New York University School of Law professor, said even more so than Garland, the department’s yet-to-be-appointed deputy attorney general for the antitrust division will heavily influence cases against Big Tech. “The usual run of antitrust enforcement is controlled by the assistant AG in charge of the antitrust division,” First said.

One exception to that rule was a high-profile antitrust lawsuit the Justice Department and 11 states filed against Google (GOOG, GOOGL) in October, accusing it of engaging in anticompetitive behavior in its search and search advertising businesses. Then-Attorney General William Barr reportedly pushed hard to speed up the case against the search giant while the assistant attorney general in charge of antitrust matters was not involved at all due to a conflict of interest.

Then-Assistant AG Makan Delrahim recused himself based on his involvement as a lobbyist in Google’s controversial effort to acquire advertising platform DoubleClick, an acquisition woven inseparably into the government’s antitrust claims.

Judge Merrick Garland, U.S. President-elect Joe Biden's nominee to be U.S. Attorney General, rises to speak as Biden announces his Justice Department nominees at his transition headquarters in Wilmington, Delaware, U.S., January 7, 2021. REUTERS/Kevin Lamarque
Judge Merrick Garland, U.S. President-elect Joe Biden’s nominee to be U.S. Attorney General, rises to speak as Biden announces his Justice Department nominees at his transition headquarters in Wilmington, Delaware, U.S., January 7, 2021. REUTERS/Kevin Lamarque

Lipsky said while an AG’s close involvement in a department’s cases is rare, the relationship with each deputy varies from administration to administration.

“As for the assistant attorneys general, there are different patterns,” Lipsky said. “Barr seems to have taken a tremendous amount of responsibility in the investigation of the technology firms, and in bringing the complaint against Google.”

Garland’s past antitrust rulings show no favoritism

A review of Garland’s involvement in antitrust cases, the experts said, showed no viewpoint favoring antitrust plaintiffs or defendants. In antitrust cases where Garland participated as a judge for the D.C. Circuit, he joined the majority, but did not author any of the opinions. Reuters’ “Practical Law Antitrust” publication noted in a 2016 analysis that Garland’s participation in the majority showed “a slight pro-enforcement tendency.”

One “pro-enforcement” decision involved a proposed merger of Heinz and the baby foods maker Beech-Nut. After the FTC challenged the merger of Heinz and Beech-Nut back in 2000, Garland signed onto an opinion ruling in favor of the commission and ordering a court to pause the deal while the FTC challenged it in court. Heinz abandoned the $185 million merger after the appeals court’s ruling, which found the FTC had raised “serious and substantial questions” about the deal.

Still, Hittinger said, “There are mergers that he’s blocked when he was on the court, mergers he’s upheld. I don’t see any deference, one way or the other.”

Google case schedule is a ‘risk’

If he’s confirmed by the Senate, Garland will be entering the Justice Department amid a broader movement to rein in Big Tech. In addition to the lawsuit in October, Google was hit with two additional antitrust lawsuits in December — one from 10 states focused on ad tech and another from 38 attorneys general focused on exclusionary contracts.

Facebook (FB) 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 (AAPL) and Amazon (AMZN) remain part of ongoing investigations by federal and state officials.

Will the case against Google continue under a Biden administration? While there are instances where the Justice Department under a new administration has dropped or settled charges pending against a defendant, those instances are rare.

“It’s not unheard of and it’s not impossible,” First said, pointing out that the Reagan administration’s Justice Department dropped and settled major antitrust cases it inherited from prior administrations.

One dropped case was filed on the last day of the Johnson administration, more than a decade before Reagan took office, and sought to break up IBM. Another, inherited from the Carter administration, sought to curtail suspected price fixing between oil companies. Reagan’s DOJ also settled one of the department’s largest and most notable cases, brought against AT&T under Ford.

With the Google case, First said, he would expect the new administration may want to change the direction of the case or broaden it, though not drop claims entirely.

One major concern is the timeframe set for proceedings against Google, which is not expected to go to trial until September 2023.

He and other experts acknowledged the complexity involved in the case but compared it to one of the department’s most famous antitrust suits — the case against Microsoft, alleging it engaged in a series of anticompetitive activities such as using exclusionary agreements to protect its Windows operating system, which ended up hurting competition in the software industry.

“In the Microsoft case, the complaint was filed in May and they went to trial in September,” First said. “I was actually a little shocked at what looks to be a very deliberate pace of the [Google] litigation. That strikes me to be not a very good idea.”

Lipsky agreed that the Google case schedule poses a risk, especially when dealing with technology and disputes that could become obsolete during the course of the litigation.

In addition, Lipsky said the DOJ and the FTC have long been mindful of the string of aggressive antitrust actions brought between the late 1960s and 1970s — against IBM, oil companies, and cereal manufacturers, that failed, in part due the government’s decisions to expand charges that lengthened the time for resolution.

“All of those cases fell flat on their faces,” Lipsky said.

Alexis Keenan is a legal reporter for Yahoo Finance and former litigation attorney.

Follow Alexis Keenan on Twitter @alexiskweed.

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