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Search Neutrality: Antitrust As (Bad) Social Policy

According to the New York Times, Texas attorney general Greg Abbott has launched an antitrust investigation of Google, based on the concept that deviations from “search neutrality” are anticompetitive and unlawful. Texas Attorney General Investigates Google Search | NYTimes.com.

The examination involves the fairness of Google search results, a concept called search neutrality. Some companies worry Google has the power to discriminate against them by lowering their links in search results or charging higher fees for their paid search ads.

This is utterly ridiculous. Google does not compete with the companies listed in its search results, but instead with other search engines for advertising. Anything Google may or may not do — and its mathematical algorithms leave precious little room for human bias — in Web search query results has no effect whatever on advertising competition. Search is by definition subjective because someone or something has to rank and order sites, but more importantly it is a free product.  If anything, search bias would harm Google and help its search competitors (principally Microsoft-Yahoo!) by giving them a competitive advantage for search users looking for so-called “objective” Internet search results.

And in the only relevant market that counts — advertising — search neutrality is completely irrelevant.  Even if advertisers pay for higher listings in search placement, as they can do for all Internet and search advertising (including “sponsored” or “promoted” search results on every major search site), that’s no different from paying for a full-page or inside front cover ad in a traditional magazine or newspaper.  In the marketplace, that’s a completely acceptable, in fact desired, method of competition.

Now the search neutrality complainants argue that Google can “leverage” its search dominance into other markets.  For instance, they say:

with its so-called Universal Search setup, Google is using its search engine monopoly — which controls an estimated 85 per cent of the global market — to unfairly favor its own services over those of its competitors. Universal Search transforms Google’s ostensibly neutral search engine into an immensely powerful marketing channel for Google’s other services. [I]t allows Google to leverage its search engine monopoly into virtually any field it chooses. Wherever it does so, competitors will be harmed, new entrants will be discouraged, and innovation will inevitably be suppressed.

Why the [EU] Google Antitrust Complaint is Not About Microsoft | The Register

As any antitrust lawyer knows full well, “leveraging” as a competitive concern is not unlawful and represents a discarded, 1960s-era theory of antitrust law. So this Texas investigation is really social policy (and bad policy, at that) on search engine technology masquerading as an antitrust issue. Get with it, A.G. Abbott, and be honest about what you are doing, which has nothing at all to do with competition or antitrust.

Even worse, if the Times’ sources are right, it seems that Microsoft itself, and my old antitrust colleague Rick Rule of Cadwalader, are behind the investigation.

The Texas attorney general has asked Google for more information on several companies, Google said. They include Foundem, a British shopping comparison site, SourceTool, a business search directory and myTriggers, which collects shopping links. In [a] Google blog post, [a company rep] drew an association to Microsoft. He said that Microsoft finances Foundem’s backer and that its antitrust attorneys represent the other two. Foundem is a member of the Initiative for a Competitive Online Marketplace, a European group co-founded and sponsored by Microsoft. SourceTool and myTriggers are clients of Cadwalader, Wickersham & Taft, the law firm that represents Microsoft on antitrust issues.

Note also that Foundem runs the searchneutrality.org Web site.

I don’t agree with guilt-by-association for lawyers in private practice.  But if Microsoft is financing these complaints, that just reinforces my long-held view that antitrust laws can be and frequently are used strategically to restrain competition and block rivals just as much as they can and should be used to pry open markets from dominance by monopolists.

You pick which motivation is at work here.  My conclusion is obvious.

3 comments to Search Neutrality: Antitrust As (Bad) Social Policy

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