The laws of economics can be seen at work nearly everywhere if one only endeavors to take note of them. That which Frédéric Bastiat wrote is “not seen” is not invisible but rather overlooked — overlooked by lawmakers and bureaucrats who, in their excitement to achieve some perceived public good, prefer not to investigate the effects of their pet policies; such investigations all too often provide good evidence that those policies should not be pursued.
Earlier this month, federal district court judge Amit Mehta rendered a remedies ruling in the Department of Justice (DOJ)’s antitrust case against Google Search. The court’s lengthy order makes clear that Judge Mehta has seen that which often goes unseen. He largely rejected the government’s extravagant remedies proposals, which amounted to little more than an attempt to leverage a liability finding against Google for the purpose of rearranging the online search market to soothe the myopia of bureaucrats in Washington.
The DOJ seems to see itself engaged in a great war against a private company, a company that, the Trump administration believes, is hostile to the political faction that this administration leads. In April, standing next to the courthouse, DOJ antitrust chief Gail Slater defended her agency’s suit (a case whose legal particulars concern economics and competitive markets), noting: “You know what is dangerous? The threat Google presents to our freedom of speech.”
Quite naturally, DOJ has also posited that Google threatens competition in the online search market, but her introduction of non-economic grievances is not insignificant. Such a theory of antitrust points to the conclusion that the economic and cultural power of hostile firms ought to be dismantled, never mind the havoc inflicted on the law, innovation, or the dynamism of American industry. This conclusion has little to do with economics — indeed, it is at odds with Econ 101.
Rejecting proposals for an enforced divestment of the Google Chrome browser, extensive compelled data-sharing, and mandates for user choice screens and public education, Mehta instead favored more modest and tailored remedies. Mehta confined his order to remedies likely to ameliorate damage done to competition, as outlined in his liability ruling of August 2024. He would not accede to the DOJ’s request that antitrust law be deployed as a means of central planning. Discrete findings of anticompetitive conduct warrant discrete, tailored remedies — and no more. Perhaps most notably, Google may continue to contract with phone manufacturers and the proprietors of web browsers to secure prime placement — though not exclusive placement — for its search engine.
Mehta seems to maintain a sturdy skepticism with respect to the knowledge available to judges and bureaucrats and their competency to interfere in, and to tinker with, markets. “Ultimately,” he wrote, “when crafting a remedial decree, judges must ‘be mindful…of their limitations’ and approach the task with ‘a healthy dose of judicial humility.’”
In his discussion and rejection of the DOJ’s bid to forbid Google to pay to secure preferential placement on, e.g., browsers and mobile devices — the prohibition of which would rob companies such as Apple and Mozilla of a good deal of revenue — Mehta professed outright ignorance. Outlining the likely impediments such a ruling and such revenue losses would erect against innovation and competition, he wrote: “The court cannot predict to any degree of certainty that one or more of these effects will in fact occur.” Moreover, he argued, “if one or more of these adverse market impacts were to come to pass, it would harm consumer welfare. That could manifest in various ways, including higher prices, less innovation, and less competition.” The DOJ (not to mention the left- and right-wing antitrust activists who share its technocratic sensibilities) has no such qualms. Nonetheless, as the court acknowledged, knowledge problems persist — even in digital markets, which many in both major political parties yearn to regulate.
Even since issuing his liability finding last year — which, it ought to be noted, is likely to fall on appeal — Mehta seems now to have discovered new reason for his skepticism. Google now contends with new competitive threats to its dominance of online search: social media, specialized online platforms, and most significantly generative artificial intelligence (GenAI). It has been noted that Mehta’s liability finding expended few words discussing AI, yet the intervening year, and the developments that have occurred in that time, rendered a consideration of the technology in the remedies order unavoidable.
Mehta has grasped another fundamental element of markets and innovation: time. Time comes for all — especially market incumbents. The DOJ’s case began in 2020, filed under the first Trump administration. It was carried forward by the Biden administration, and Trump 2.0 has sought to bring it to completion. In these years, innovation has proceeded too quickly for the government’s lawyers to keep pace. It will not surprise free marketeers to learn that, once again, state action has fallen years behind the evolution of markets.
“The emergence of GenAI changed the course of this case,” Mehta stated. This observation appears on the first page of his opinion. “Google’s own witness…testified that the volume of Google Search queries in Apple’s Safari web browser had declined for the first time in 22 years likely due to the emergence of GenAI chatbots,” Mehta noted later. To strengthen its slipping hold on its dominant market share, the company has integrated AI features into Google Search and has marketed its own GenAI product, Gemini. Again, the changes wrought in markets by time and innovation became central: “Since the liability trial, Google has deepened the integration between Search and GenAI by incorporating AI Overviews into its SERP and introducing AI Mode, both of which ‘are expanding the types of queries [users] are typing into Google Search,’” he reported.
Google has good reason to fret. According to one analysis, summarized by The Wall Street Journal, “[a]lmost 60 percent of US consumers used a chatbot to help research or decide on a purchase in the past 30 days.” While GenAI tools synthesize and serve up information differently from traditional general search platforms, they fulfill many of the same consumer demands. Technology companies — incumbent and upstart alike — innovate unceasingly to perfect old products and develop new ones to serve their consumers better. Innovation and competition are a fierce game — unflaggingly iterative and ruthlessly responsive to consumer demand — and any firm that stumbles is likely to join the likes of Myspace and Yahoo in the netherworld.
The premises underlying Mehta’s order illuminate the beautiful unpredictability of markets, the capacity of spontaneous order to provide for the needs and desires of humanity. From this process of experimentation and innovation springs new goods and services undreamt of by legislators, bureaucrats, and judges (and, for that matter, likely undreamt of by entrepreneurs themselves until the moment of discovery). Untold numbers of men and women — generally unknown to one another — combine their talents and tenacity and hazard great and risky endeavors for the purpose of serving their fellow man, most of whom also remain unknown. Myriad threads are woven together into a tapestry, across time, industries, and national borders.
Even if only latently, Judge Mehta realized two things: First, that he could not foresee what is to come next in the online search market and the technology sector generally; second, bureaucratic micromanagement of technology markets would produce ills — even if he could not foresee what those ills might be.
The laws of economics can be seen at work nearly everywhere, and Judge Mehta very wisely took note of them.