Settlement: FTC Ends Google Antitrust Investigation

by Wayne Crews on January 3, 2013

in Economy, Property Rights, Regulation, Tech & Telecom

Today, the Federal Trade Commission (FTC) cleared Google of accusations of “Search Bias,” and inappropriately harming rivals.

The investigation lasted nearly two years. CEI released a statement today, “Web Users Dodge Bullet as FTC Closes Google Probe.”

Google rivals naturally object, but those protests are revolts against the objective reality that people like Google.

The FTC did secure certain concessions from Google, which will alter how it presents bits of information, such as that from review sites such as Yelp (a criticized practice it was already modifying in some areas); and Google will make it easier for firms to advertise across other search engines when they have an arrangement with Google.

Antitrust purports to address consumer harm, or compulsion. The FTC got it right; there is no harm created by Google reasonably address with top-down force. Options abound for consumers. If only the investigation had been avoided at the outset.

As my colleague Ryan Radia noted:

Today’s ruling…affirms that every company is free to compete by serving its users, no matter how high its market share or how much its rivals suffer as a result. America’s antitrust laws are designed not to punish companies for growing too big…but to ensure no company stifles competition itself. The thriving Internet sector — a bright spot in America’s otherwise lackluster economy — shows no signs of suffering from too little competition.

The issues go to the core of what free enterprise represents. For antitrust to have legitimacy, it would need to break up coercive monopoly power. Instead, antitrust is too easily itself a form of coercive monopoly power, more sweeping than what any firm could ever achieve (Especially one whose chains are broken by a click or finger-swipe).

Antitrust consolidates governmental power over all productive sectors, which is not, I submit, a good thing. Lately, the critical technology and communications sector seems particularly vulnerable. Concessions such as those agreed to by Google have become routine. The trend is worrisome for the future.

When numerous firms team up with one another — and with government besides — all aiming their wrath at a lone rival in the crosshairs, we officially affirm pro-trust rather than antitrust policy. That needs to be made more clear. Antitrust does not wear the white hat.

Google was the latest targe. Unfortunately, there will be more, so the tech industry should be cautious. Microsoft, XM-Sirius, the scuttled AT&T/T-Mobile merger: Are such interminable investigations really what we want? Is this what awaits Apple, for example, or other Google competitors? I hope not. As Radia noted, competition is thriving; that’s the best regulator.

For more, see “Lesson From The Google Case: There Is No Such Thing As Antitrust Policy,” and “Google Is Many Things — But Not an Illegal Monopoly.”

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