Prepared remarks: Lessons from Microsoft: A State AG Perspective (April 25, 2025)

In my career as an antitrust lawyer, scholar, and enforcer, I have the great fortune of starting my career with a front row seat to watch what will remain a seminal case in antitrust law—U.S. v. Microsoft.[1]  I am doubly fortunate to be leading what may well be a second such case—Colorado v. Google[2]; a case that applies the core principles from the Microsoft case to new circumstances.

As you know, the remedies phase of the Google case began this week, so we are in the thick of it. That’s not the best time to assess its enduring legacy, but I can offer a series of reflections that bear further examination.  And that will be the spirit of my talk today, discussing (1) the important role of the states in antitrust enforcement; (2) the manner in which bipartisan efforts at the state level reinforce the traditional, and essential, bipartisan nature of antitrust enforcement; and (3) the importance of remedies in fulfilling our enforcement responsibilities.

I.     The Critical Role of States in Antitrust Enforcement

Last time I joined you here, by video in the spring of 2020, I talked about the “Enduring Promise of Antitrust.”[3]  The essence of my remarks focused on the role of state Attorneys General and the role of the states.  Those comments put the Microsoft case front and center.  As I discussed at that time:

In that case, the federal government ultimately decided—after a remand on the remedies issue by the Circuit Court of Appeals of the District of Columbia—on a regulatory remedy and declined to pursue structural relief.  A number of states that were part of this litigation took a different view and proceeded to challenge the absence of divestiture.  As this case was litigated and ultimately decided, it was accepted that the states have the requisite authority to pursue a different view from the federal government if they choose to do so.[4]

The states in that case ultimately influenced the final decree.  Whereas some states challenged the U.S. Department of Justice’s settlement, other states had successfully worked to improve it.  Notably, the final decree contains a provision requiring interoperability of communications protocols that went beyond the unlawful conduct, but that the D.C. Circuit approved as important for opening doors to competition that had been closed shut.[5]

I mentioned, in my talk four years ago, that the view adopted by the courts in Microsoft about the important role of the states was the right view, but not, at that time, an entirely accepted one.  By contrast, the USDOJ in the Sprint/T-Mobile case took a very different approach.  Notably, “the DOJ asserted in its brief that the states’ ‘[quasi-sovereign] role does not permit states to override the sovereign interests of the United States.’”[6]  Put differently, the USDOJ’s position was that it, without any role for the states, was the “supreme arbiter of antitrust law.”[7]  Thankfully, the court that considered the states’ challenge to the Sprint/T-Mobile merger rejected this position, concluding that “[h]aving been tasked with independently reviewing the legality of the Proposed Merger, the Court is not bound by the conclusions of these regulatory agencies.”[8]

Times have changed and the states are more fruitfully working with federal enforcers in the spirit of the Microsoft case, where the states were free to operate on their own where they so choose.  Notably, during Colorado’s challenge to the Kroger/Albertsons merger, the USDOJ filed a statement of interest, explaining that states can “often provide unique perspectives on the competitive harm of certain restraints within their jurisdictions, and state antitrust laws can provide bases for seeking and tailoring certain remedies.”[9] In its filing, the USDOJ also made the important point that many state antitrust enforcers even predate federal antitrust enforcement[10] and recognized that, as the Supreme Court stated in the California v. American Stores case, the role of states in antitrust enforcement “was in no sense an afterthought; it was an integral part of the congressional plan for protecting competition.”[11] We look forward to, under Gail Slater’s leadership, this wise view continuing to hold sway.

The ability of states to impact antitrust enforcement is growing.  As we gain experience, we have a more seasoned set of lawyers who can take on the biggest cases.  This increasing capacity of state enforcement will complement federal enforcement, sometimes through independent or multi-state action, and sometimes by acting as a force multiplier in concert with federal enforcers.  And we are stronger because of our bipartisan cooperation.

II.      The States Represent the Essential Bipartisan Nature of Antitrust Enforcement

When I was first elected as Colorado’s Attorney General, one of the first people who reached out to me was Nebraska Attorney General Doug Peterson.  Doug told me that he and a few other state attorneys general, including outgoing Illinois Attorney General Lisa Madigan, were deeply concerned about the rising market power of Big Tech companies like Google.  He added that he understood I had a strong background in antitrust, which would be valuable as states started investigating these companies.

As I was planning my transition, I said to my Chief Deputy Natalie Hanlon Leh that I had heard from AG Peterson about the importance of antitrust enforcement to him and other state AGs. I added that, just because I had a strong background in this area, that did not mean it was the right decision for Colorado to play a major role in such cases.  To my knowledge, for example, Colorado had never led a major state AG effort against a major company.  But Doug was persuasive, and a great partnership was born.

The initial investigation of Google started under President Trump and the state AGs were collaborative with the Trump Administration as it investigated the case.  Ultimately, the USDOJ filed their case first, but Colorado, Nebraska, and a coalition of 38 attorneys general filed shortly thereafter and worked together to keep the two cases on the same track.  After AG Peterson rolled off as Attorney General, we were fortunate to have Tennessee Republican AG Jonathan Skrmetti join our ranks and step into Doug’s shoes.  The state AG coalition in this case—like others I have worked on—was a model of pooling resources and expertise to litigate a case together that we could not have done as effectively, if at all, on our own.[12]

I want to make one simple—but I believe powerful—point about how we have operated as a multistate coalition.  Right now, we are just about evenly divided between Republican and Democratic AGs.  But during this litigation of this case (now in its fifth year) there has not been a single time that we have disagreed on any issue—of strategy or tactics or personnel or budget—on a partisan basis.  Not even once.  That is powerful testimony to all 38 attorneys general and their staffs, as well as how antitrust enforcement operates.

As we filed the Google case, we were most fortunate to have, as a valued partner and counsellor, Iowa Attorney General Tom Miller on our team.  AG Miller and I first met when I was the counsel to Joel Klein, the Assistant Attorney General at the USDOJ in charge of the Antitrust Division.  At that time, AG Miller also demonstrated his commitment to bipartisan antitrust enforcement, ensuring that a bipartisan coalition of states worked together on U.S. v. Microsoft.  And leading Republicans in Congress, like Senate Judiciary Committee Chair Orrin Hatch, also supported that landmark case.[13]

After litigating the Google Search case under a Biden Administration, we are deep into the remedies phase, working with a second Trump Administration.  We thus have the opportunity to again demonstrate how the enforcement of the antitrust laws and protecting consumers—particularly in this time of rising costs and harms to consumers—is a bipartisan priority.  I believe that our bipartisan collation and cooperation demonstrates that, even in a sharply divided time, state attorneys general are better together. And I believe that we set an example for the kind of bipartisan cooperation that exists between state and federal antitrust enforcers.

I learned this from Tom Miller:  State AG offices are better together.  Indeed, as was true then, we are at our best when federal enforcers and states pool their resources and share their thoughts in fruitful collaboration.  One opportunity, which I hope becomes an established norm, is respecting how both between states and between the states and the federal government, there can be a respectful and constructive “challenge culture,” as it has been called,[14] whereby there is room to challenge and improve ideas, always avoiding groupthink.

On the importance of the bipartisan commitment to robust antitrust enforcement, a final point worth making is that it is imperative that antitrust be principled and always treat like cases alike, respecting the rule of law.  The reasons we have the Tunney Act, which calls for an independent judicial assessment of a settlement of an antitrust challenge, is to guard against breaches of this norm, as happened under President Nixon.[15]  To encourage robust entrepreneurship and full and fair competition, it is important that the USDOJ never take actions because of the particular company or individual involved.

In the Google search litigation, we are working effectively with the USDOJ as we litigate the remedies phase of the case.  We are working hard together because, to paraphrase Chief Justice Marshall, where there is a wrong there must be a remedy.[16]  And with our recent victory in our other monopolization case against Google, involving the monopolization of the ad tech market,[17] we are proceeding to a remedial phase in that case as well.  Let me turn now to some reflections on remedies.

III.       Reflections on Remedies      

In August 2024, Judge Mehta issued his decision finding that “Google is a monopolist, and it has acted as one to maintain its monopoly.”[18]  That ruling, of course, called for the need to conduct a remedies phase of the case.  To that end, last month, our state coalition and the USDOJ filed our revised proposed final order on remedies.  In that filing, we ask the Court to pry open the markets that Google has monopolized by, among other things, divesting Chrome, syndicating certain search and ads products, and ending its anticompetitive default placements.  In addition, the states are asking for Google to fund a public education campaign to educate users about Google alternatives.[19]  Google filed its proposal as well.  We began the remedies proceeding this Monday, April 21^st, with the opening statements delivered, in tandem, by the lead counsel for the DOJ and the lead counsel for our coalition.  The judge has told us that he intends to issue his remedies opinion in August.

Our ultimate goal is simple: To restore lost competition through effective, forward-looking remedies.  The starting point is to recognize that, by its conduct, Google has maintained monopolies, boosted its profits, raised barriers to entry, and kept competition at bay.  Consequently, simply ending the contractual practices that were the basis of the liability decision would leave Google with the accrued advantages of monopoly and with competitors at a continuing, artificial, disadvantage.  In other words, Google would effectively enjoy the fruits of its illegal conduct.

The settled law of antitrust remedies requires addressing the harms caused by the monopolist.  Importantly, as the Supreme Court has explained, “When the purpose to restrain trade appears from a clear violation of law, it is not necessary that all of the untraveled roads to that end be left open and that only the worn one be closed.”[20]  Rather, antitrust remedies should seek to “restore competition.”[21]

One obvious remedial option is divestiture or structural relief.  The goal of a divestiture is often to shift economic incentives and abilities in a manner that promotes competition without the need for detailed and continuing judicial monitoring.  After all, remedies must be both effective and administrable.  Divestiture relief, such as what we are seeking in the Google case, has the virtue of being both.  As an alternative to a traditional divestiture remedy, we have also suggested a contingent divestiture provision,” referred to in the case as “contingent structural relief,” along the lines of what the Federal Trade Commission has mandated in the past in the nature of a “crown jewel provision.”[22]  Such a provision would keep the threat of a divestiture in the background as a deterrent in the event that Google undermined the impact of conduct remedies through noncompliance.

Like in Microsoft, we are also proposing options for conduct remedies.  In Microsoft, the court opted for such relief on the theory that they could “prevent future violations.”[23]  And the court also embraced such a relief as a means to restore competition to the market, explaining that the remedies should reach practices that were not a basis for the liability decision.  As noted above, state attorneys general played a role in crafting such relief, with New York, Ohio, Illinois, Kentucky, Louisiana, Maryland, Michigan, North Carolina, and Wisconsin proposing a requirement, adopted by the district court and the D.C. Circuit, that Microsoft be required to disclose so-called communications protocols that empowered new forms of connection between the Windows operating system on a computer and a non-Microsoft server.[24]

In proposing conduct remedies in the Google case, we are seeking to ensure that Google cannot enjoy “the fruits of its statutory violation.”[25]  In practice, this means that we will work to systematically and comprehensively lower the barriers to entry that have protected Google.  In our filing, we seek an end to Google’s search-related payments to distribution partners such as Apple,[26] which has effectively plunged the ecosystem into a decade-long ice age and raised insurmountable barriers to new entry while simultaneously creating a system dependent on Google’s monopoly payments. We also seek, among other things, to curtail Google’s use of exclusive agreements with content publishers, which have deprived competitors of access to vital resources.[27] And because remedies in cases involving dynamic industries can be skirted, our filing also aims to ensure that Google cannot engage in self-preferencing as a way of circumventing the court’s remedy.[28]

When I was here (virtually speaking, that is) five years ago, I addressed the topic of remedies.  My focus in that talk was on what we might call “comparative institutional competence”—meaning, looking at remedies with an eye to what courts as opposed to other institutions can do to restore competition.[29]  I noted, in those comments, that as we look at remedies in cases involving digital platforms, it will be relevant to evaluate how enforcement authorities handle such matters.  Consider, for example, that if a company operates in a certain way abroad because of regulatory requirements, it is in no position to suggest that it cannot undertake such obligations here in the United States because they are infeasible.

As an antitrust scholar, I have waded into the field of antitrust remedies before, making a complementary point to the one about the value of looking abroad for models of oversight.  Notably, in an article that reflected on both the Microsoft case and the AT&T case, I suggested that “where courts must intervene by crafting a conduct remedy, Aspen Skiing underscores the basic antitrust lesson that courts should search for appropriate standards that can be judicially enforced.”[30]

Despite the need for antitrust courts to ensure that the remedy is both effective and administrable, sometimes judges are reluctant to order a divestiture and may want to try an alternative option, along the lines, perhaps, of what Spencer Waller had in mind when he wrote “disclosure is divestiture when it comes to our high-tech, information-based, intellectual property-driven economy.”[31]

A problem with a remedy that only stops the harm from continuing is that it is likely to reward the monopolist by allowing it to maintain the benefits of its illegally maintained monopoly power.  As Carl Shapiro put it as to the Microsoft case:

[T]he Final Judgment has achieved precisely what it was designed to do: prevent Microsoft from continuing to engage in the conduct that had been found to be illegal. The Final Judgment has done nothing significant to affirmatively restore competition. Thus, in my view, the remedy in the most prominent antitrust case of our era has failed.[32]

In our case against Google, we are concerned about this very outcome, potentially because Google could do the minimum to end the banned conduct, but fail to truly advance the remedial provisions designed to restore competition.  To that end, that is why (as discussed earlier) we have suggested a contingent divestiture provision as an alternative to divestiture, with the threat of such a divestiture serving as an additional incentive for compliance.

* * *

Those of us here who have had the opportunity to have antitrust careers bookended by the AT&T, Microsoft, and Google cases can celebrate work that places rigorous, rule of law-based analysis at the center of how competition enforcement should operate.  I count myself most fortunate to have such a career.  I am also fortunate that I have had the opportunity to work on such issues from both the vantage point as a federal enforcer, a state enforcer, a practitioner, and a scholar.  For those students here today, I would highlight that this field is as relevant as ever and the work we do to protect competition in the digital economy is critical to our future.

[1]  253 F.3d 34 (D.C. Cir. 2001) (en banc).

[2] No. 20-CV-3715 (D.D.C.).

[3]  Philip J. Weiser, The Enduring Promise of Antitrust, 52 Loy. U. Chi. L. J. 1, available at https://lawecommons.luc.edu/luclj/vol52/iss1/3.

[4] Id. at 3.

[5] Final Judgment at 4, United States v. Microsoft Corp., No. 98-1232 (D.D.C. Nov. 12, 2002), ECF No. 746.

[6] Weiser, supra note 3, at 4.

[7] Id.

[8] See New York v. Deutsche Telekom AG, 439 F. Supp. 3d 179, 224–25, 225 n.21 (S.D.N.Y. 2020).

[9] See United States’ Statement of Interest at 3, State of Colorado v. The Kroger Co., 2024-CV-30459 (Denv. Dist. Ct. May 3, 2024).

[10] Id. at 2; See also David K. Millon, The First Antitrust Statute, 29 Washburn L.J. 141, 141 (1990) (“No less than eleven . . . states passed various forms of antitrust legislation before Congress approved the Sherman Act in 1890.”).

[11] California v. Am. Stores Co., 495 U.S. 271, 284 (1990); Accord Statement of Interest, supra note 6, at 1–4.

[12] A coalition of State AGs acknowledged this broad point in our comments on the recent Merger Guidelines. U.S. Dep’t of Just. & F.T.C., Public Comments of 28 State Attorneys General on Draft Vertical Merger Guidelines (Feb. 26, 2020), https://www.justice.gov/atr/page/file/1258786/download [https://perma.cc/7EYG-QJZU] (“State Attorneys General working together can bolster antitrust enforcement across the nation by effectively deploying expertise and resources.”).

[13] Jeri Clausing, Senator Takes On Microsoft in Antitrust Hearings, N.Y. Times (Nov. 5, 1997) available at https://archive.nytimes.com/www.nytimes.com/library/cyber/week/110597senate.html.

[14] See Nigel Travis, The Challenge Culture: Why the Most Successful Organizations Run on Pushback (2018).

 

[15] E. W. Kenworthy, The Extraordinary I.T.T. Affair, N.Y. Times (Dec. 16, 1973), https://www.nytimes.com/1973/12/16/archives/whats-good-for-a-corporate-giant-may-not-be-good-for-everybody-else.html.

[16] See Marbury v. Madison, 5 U.S. 137, 147 (1803) (“It is a settled and invariable principle, that every right, when withheld, must have a remedy, and every injury its proper redress.”).

[17] United States v. Google LLC, No. 23-CV-108 (E.D. Va. April 17, 2025), ECF No. 1410. .

[18] United States v. Google LLC, 747 F. Supp. 3d 1, 3 (D.D.C. Aug. 5, 2024).

[19] Plfs.’ Rev.  Proposed Final Judgment at 30, United States v. Google LLC, No. 20-CV-3010 (D.D.C. Mar. 7, 2025), ECF No. 1184-1 [hereinafter Plaintiff’s Proposed Final Judgment].

[20] International Salt Co. v. United States, 332 U.S. 392, 400 (1947).

[21] Ford Motor Co. v. United States, 405 U.S. 562, 573 (1972).

[22]  See, e.g., Decision and Order, In the Matter of Hoechst AG, a corporation; and Rhône-Poulenc S.A., a corporation; to be renamed Aventis S.A., a corporation, F.T.C. Docket No. C-3919, available at https://www.ftc.gov/legal-library/browse/cases-proceedings/hoechst-ag-rhone-poulenc-sa-be-renamed-aventis-sa-timeline-item-2000-01-28.

[23] United States v. Microsoft Corp., 253 F.3d 34, 101 (D.C. Cir. 2001) (quoting United States v. Ward Baking Co., 376 U.S. 327, 330–31 (1964)).

[24] New York v. Microsoft Corp., 224 F. Supp. 2d 76, 129 (D.D.C. 2002), aff’d, Massachusetts v. Microsoft Corp., 373 F.3d 1199, 1223 (D.C. Cir. 2004).

[25] United States v. Microsoft, 253 F.3d at 103.

[26] See Plaintiffs’ Proposed Final Judgment, supra note 14, at 7–8.

[27] Id. at 8; See also Google LLC, 747 F. Supp. 3d at 159 (finding that “Google’s exclusive agreements…deny rivals access to user queries, or scale, needed to effectively compete.”).

[28] See Plaintiffs’ Proposed Final Judgment, supra note 14, at 13–14.

[29] Weiser, supra note 3, at 10.

[30] Philip J. Weiser, Regulating Interoperability: Lessons From AT&T, Microsoft, and Beyond, 76 Antitrust l.j. 271, 296 (2009).

[31] Spencer Weber Waller, The Past, Present, and Future of Monopolization Remedies, 76 ANTITRUST L.J. 11, 26, (2009).

[32] Carl Shapiro, Microsoft: A Remedial Failure, 75 ANTITRUST L.J. 739, 761 (2009).