Google is too important not to investigate — don’t believe the bozos whining about governments picking winners
“Mad Men” and politicians know that the well-turned phrase can be a game changer. During the debate on health care reform, for example, “death panel” stuck in the minds of millions and nearly won the day. Over the years, another phrase — “the government is picking winners” — is trotted out whenever a regulator takes a serious look at the alleged abuses of a technology company.
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There were no death panels, of course, and neither the Federal Trade Commission nor the U.S. Department of Justice in investigations of Microsoft, Intel, and now Google was attempting to pick winners. By repeating that phrase, the target companies and their paid (and unpaid) propagandists are trying, with some success, to define the terms of the debate in their favor.
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The FTC’s investigation into Google isn’t about how big it is, whether its technology is better than someone else’s, or whether it does evil. Being big, indeed being a monopoly or near-monopoly, is not a crime. What is a crime is the abuse of monopoly power to the extent that the free market is no longer free.
In the antitrust consent decree related to Internet Explorer, Microsoft wasn’t punished because it had a huge share of the operating system market, and Intel wasn’t singled out in an FTC antitrust investigation because it dominated the market for microprocessors. They were punished because they abused that power. (Intel agreed to a draconian settlement without admitting guilt.)
Similarly, Google isn’t being investigated because it dominates the market for search-related ads. Its rivals have made a case that it is abusing that power by cooking search results in favor of companies it does business with. That would be an abuse of its market power, if it turns out to be true, and is worth investigating.
Is Google guilty? I really don’t know. And who wouldn’t be suspicious when Microsoft (the linchpin of an anti-Google coalition called Fairsearch.org) points a finger at a rival and cries foul? But I do know that Google is as central to the technology industry today as Microsoft and Intel were in the 1990s. Sure, an investigation is costly and a nasty distraction for management. But both Intel and Microsoft are now doing just fine, thank you, and the technology market is arguably freer and better because of that scrutiny.
Are Google search results fair?
In case you missed it, Google last week confirmed press reports that the FTC had opened an antitrust investigation into its core search and advertising business. In a blog post, Google said it wasn’t sure about the rationale for the commission’s concerns, but according to reports in the Wall Street Journal, it appears that the probe will ask if Google searches steer consumers to the company’s partners at the expense of competing businesses.
