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Is Google Monopolizing the Search Engine Business? Depends Who You Ask

Experts Discuss Arguments For and Against Possible Antitrust Violations by Google, In the Context of the FTC Investigation

Media Contact: Public Affairs, 212-854-2650 or publicaffairs@law.columbia.edu

 

New York, Jan. 31, 2012Columbia Law School was the scene of a lively lunch talk on Wed. Jan. 18, featuring two antitrust experts debating whether Google is engaged in anticompetitive behavior in the search engine market. Bert I. Huang, an associate professor of law at Columbia Law School, moderated the debate.

Joshua Wright, professor of law at George Mason University School of Law, took the position that there is no significant evidence that Google is guilty of antitrust violations. Even if Google, like other search engines, favors its own content when producing the results of a search request, he argued, dissatisfied customers can easily switch search engines. In other words, the competition is just a click away.
 
On the other side of the debate was Charles F. Rule, head of the antitrust practice at Cadwalader, Wickersham & Taft LLP. Rule, who has defended Microsoft in antitrust litigation, argued that ample anecdotal evidence exists that implicates Google in a mix of practices that have had the cumulative effect of excluding competitors’ content from appearing in a Google search, as well as monopolizing advertisers. He stressed that his opinions were his own.
 
The talk, “Is Google an Illegal Monopoly? A Debate on the FTC Investigation into Google’s Search Engine,” took place in the context of a broad investigation first disclosed by the Federal Trade Commission in June 2011. The FTC probe is focusing on whether Google unfairly ranks search results to favor its own businesses and increases advertising rates for competitors.
 
A similar investigation of Google is being conducted by the European Union’s Competition Commission. The EU commission may decide whether to file a formal complaint in March.
 
Wright discussed the evolution of search engines in the last ten years. He conceded that the allegation of search bias, in which a search engine favors its own content at the expense of rivals, is a possible violation of Section 2 of the Sherman Antitrust Act. But Wright noted that leading case law indicates that the behavior in question must harm the competitive process and thereby harm consumers, to be dubbed “exclusionary.”
 
“We demand evidence of real harm to competition before we break out the antitrust hammer,” he said, “and I don’t think there’s significant evidence of that here. It’s not hard to switch to get what you are looking for.”
 
Rule dismissed the “just-a-click-away” argument at the beginning of his talk.
 
“It’s not quite that simple,” he said. “The fact is that because of some of Google’s practices, the company has made it difficult for other search engines like Bing to achieve the same level of performance.”
 
Rule explained that search engines make their money by selling eyeballs to advertisers, and cited statistics that establish Google’s long-time share of the search-engine advertising market at 90 percent and up. He offered detailed descriptions of specific Google practices that have had the alleged effect of excluding competitive search engines—not just by blocking their content, but also by denying them opportunities to reach advertisers.
 
“With respect to bias, you can see specific anecdotes where it appears that Google has allegedly blacklisted certain companies intentionally and, in a very focused way, degraded their results so they appear lower on the page,” he said. “But also on the advertising side, there are anecdotes that when Google perceived a potential competitive threat, it automatically dramatically increases the price competitors have to pay, sometimes five to ten thousand percent overnight.”
 
There may be an innocent explanation for these practices, Rule said, but because Google’s lawyers have succeeded at getting much related litigation thrown out of court before the discovery phase, it’s impossible to examine the company’s rationale. Rule noted that Google’s response to questions amounts to a request to trust the company’s practices.
 
“We don’t have any answer beyond ‘trust us,’” Rule concluded, “and under the antitrust laws, that’s not a solution.”
 
The talk was sponsored by The Federalist Society and the Columbia International Antitrust Law Association.

 

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