GOOG Alphabet Inc

By Rob Copeland 

Former Google Chief Executive Eric Schmidt offered a full-throated defense of the search company, criticizing the government's day-old antitrust suit as misguided, unduly influenced by politics and a distraction from more serious issues facing the technology industry.

Mr. Schmidt, a board member of Google parent Alphabet Inc. until last year, made the remarks in a keynote interview at The Wall Street Journal's Tech Live conference on Wednesday. The longtime liberal political donor described the suit as "largely driven by Republicans, at the end of a term of a president whose polling indicates that he's unlikely to be re-elected."

He said he doesn't believe Google did anything illegal.

"Someone needs to say this," said Mr. Schmidt, 65 years old and visibly frustrated at points. "I'm unfettered by the corporate rules now that I'm no longer a board member, nor an employee. I can say what I actually think."

On Tuesday, the Justice Department filed a federal lawsuit against Google, asserting that the company preserves a monopoly through anticompetitive tactics. The suit particularly called out a series of agreements to make Google the default search engine on phones of virtually all U.S. carriers, as well as other deals that encourage mobile carriers to preload Google software onto their equipment.

Google called the lawsuit deeply flawed and said it planned a vigorous challenge.

Mr. Schmidt made clear that he, too, felt the government's logic was misguided. "There's a difference between dominance and excellence," he said. He described Google as having "ruthless" competition -- particularly from Microsoft Corp., whose Bing search engine runs a far second-place to Google in search volume. He observed that while he was CEO, until 2011, he studied closely the government's decadelong antitrust case against Microsoft, and was careful to avoid tripping any wires.

"We worked really hard to avoid any illegal activity," he said. "It's bad public policy to use antitrust to regulate."

A Justice Department spokesperson didn't have an immediate comment.

Mr. Schmidt retains influence at Google. He is one of Alphabet's largest shareholders and, along with the company co-founders, has special shares that give him disproportionate say into company decision making. He said in the interview that he hadn't yet spoken with Google executives about the suit.

He offered several suggestions to policy makers of where they might spend their time instead of probing his former employer.

"The most obvious candidate for regulation are the excesses in the social-networking space," he said. "The concept of social networks, broadly speaking, as amplifiers for idiots and crazy people is not what we intended."

He also said the U.S. ought to focus on China, rather than Google, in part because Big Tech is a big driver of the domestic economy.

"The competition between China and the United States is the one to watch, " he said, "because if we lose that one, 50 years of growth is in peril."

He said that the U.S. needs to develop a cohesive strategy that recognizes China as both a rival and a partner, and that the splintered internet -- with each country developing separate online ecosystems -- is "a total disaster."

Brent Kendall contributed to this article.

Write to Rob Copeland at rob.copeland@wsj.com

(END) Dow Jones Newswires

October 21, 2020 16:08 ET (20:08 GMT)

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