Recently, the FTC announced that it had laid the groundwork for an investigation into supposed Anti-Trust violations made by Google, Inc. The FTC announced on June 24, 2011 that it would be issuing subpoenas to begin the investigation.
Here’s the WSJ Story: http://online.wsj.com/article/SB10001424052702303339904576403603764717680.html
Allegedly, Google’s dominance of internet search engines is being abused to skew search results in favor of Google owned products and/or to bury competitor’s products deep in the search results. In addition, apparently Google’s sponsored results also place Google’s own services at the top…
Um, isn’t that what they’re SUPPOSED to do?
This whole idea is ludicrous. Correct me if I’m wrong here but, is the FTC and FairSearch.org REALLY insinuating that a company (such as Google) has the responsibility to advertise products for its competitors?
No, it doesn’t. The issue resides in the notion that, since Google is the most widely used search engine in the US and Europe, if it restricts or alters the search results in favor of its own products, it would then limit or restrict competition through a lack of disclosure.
Now, not only is Google NOT the only search engine in existence, it’s also not the only gateway to the internet, and is NOT violating anyone’s rights by promoting its own products (if it is in the first place.) Google is not the only medium through which internet users can find products and other websites. Google is therefore; not a monopoly and is not impeding or controlling which companies are “winners or losers” as FairSearch.org put it. Google is not affecting competition in anyway, in part because they can’t, and in part because the people who choose the “winners and losers” is YOU the consumer. An advertising or search medium like Google has NO control over the choices you make or even the scope of your choices – If I don’t like one catalog, I’ll find another.
That aside, most analysts say that no suit will actually result, but my bigger issue with this is the precedent that would be set.
This is a perfect example of “Crony Capitalism.” In the US, a Monopoly is not illegal by its self. It’s the “misuse or abuse” of monopolistic control over a market that is illegal, but those same laws do not define “misuse or abuse” or even very clearly define what makes a monopoly beyond establishing that the product is the most used in the market. – Yet the very idea of a monopoly requires that it be the ONLY option available in the market, which it is not. So, the ambiguity of the law allows complaints to be issued by competitors and subsequent investigations by the legal authorities since the law would allow.
It’s a means of either eliminating or reducing the effect of a competitor in a given market. Alcohol producers have been doing it for nearly a century under the 3 Tier System. Phillip Morris and RJ Reynolds have done it through the Tobacco Master Settlement.
This isn’t a matter of secret agreements between major companies and the government, or even something as expected as significant stock shareholders who work for the government being upset. It’s simply an avenue for any business to explore, much like advertising, product differentiation or any other way they try to increase market share.
Competition cannot be maintained by the government, it can only be usurped. – As long as a significant means to influence the success or failure of business exists within the powers of government, competing companies will seek to use the government as a means of attacking a competitor’s market share. Given the circumstances associated with this FTC investigation, I can’t help but think this is anything more than that, and the precedent established by cases like this is what we should all be concerned about.
