ALL
POV: Have Gun, Will Nudge
by Ayn Rand | March 1962
It's Not the Unions — It's the Labor Laws
by Doug Altner | March 19, 2014
Regulatory Strangulation
by Steve Simpson | March 13, 2014
Obamacare creates a new class of free riders
by Rituparna Basu | January 23, 2014
Obamacare Is Suffocating An Already Sick Health Insurance Patient
by Rituparna Basu | January 22, 2014
The Broken State of American Health Insurance Prior to the Affordable Care Act: A Market Rife with Government Distortion
by Rituparna Basu | January 21, 2014
Obamacare is Really, Really Bad for You, Especially If You're Young
by Rituparna Basu | August 21, 2013
Justice Department should let US Airways & American Airlines merger proceed
by Tom Bowden | August 16, 2013
Why Is Apple Inc. On Trial? For Good Behavior, It Turns Out
by Tom Bowden | June 20, 2013
The Forgotten Man of the Minimum-Wage Debate
by Doug Altner | June 19, 2013
Why Delivering Beer Isn’t Easy
by Doug Altner | June 11, 2013
What Explains GM’s Problems With The UAW?
by Doug Altner | May 20, 2013
What Are The Search Results When You Google ‘Antitrust’?
by Tom Bowden | April 18, 2013
To Protect the Defenseless, We Must Abolish the Minimum Wage
by Don Watkins | March 27, 2013
I’ll Buy My Own Contraception, Thanks
by Rituparna Basu | November 13, 2012
Why The Glass-Steagall Myth Persists
by Yaron Brook | November 12, 2012
Why Ayn Rand’s Absence From Last Thursday’s Debate Benefits Big Government
by Yaron Brook | October 15, 2012
Changing the Debate: How to Move from an Entitlement State to a Free Market
by Don Watkins | July 02, 2012
3 Things Everyone Needs to Know About the Apple Antitrust Case
by Don Watkins | April 10, 2012
What's Really Wrong with Entitlements
by Don Watkins | February 21, 2012
The Entitlement State Is Morally Bankrupt
by Don Watkins | September 13, 2011
How Important Is the Obamacare Litigation?
by Tom Bowden | August 12, 2011
Atlas Shrugged: With America on the Brink, Should You “Go Galt” and Strike?
by Onkar Ghate | April 29, 2011
The Road to Socialized Medicine Is Paved With Pre-existing Conditions (Part 3)
by Yaron Brook | April 06, 2011
The Road to Socialized Medicine Is Paved with Pre-existing Conditions (Part 2)
by Yaron Brook | March 10, 2011
In Defense of Finance
by Yaron Brook | February 15, 2011
The Road to Socialized Medicine Is Paved with Pre-existing Conditions
by Yaron Brook | February 10, 2011
The Avastin Travesty
by Tom Bowden | December 12, 2010
Apple Now Targeted for Success Like Microsoft Was in the 1990s
by Tom Bowden | October 04, 2010
The Un-American Dream
by Don Watkins | August 27, 2010
What About Private Health Emergencies?
by Tom Bowden | April 08, 2010
What’s Really Driving the Toyota Controversy?
by Don Watkins | March 26, 2010
Anti-Smoking Paternalism: A Cancer on American Liberty
by Don Watkins | March 06, 2010
Apple vs. GM: Ayn Rand Knew the Difference. Do You?
by Don Watkins | March 02, 2010
Smash the Labor Monopolies!
by Tom Bowden | September 15, 2009
America’s Unfree Market
by Yaron Brook | May 2009
Atlas Shrugged and the Housing Crisis that Government Built
by Yaron Brook | March 2009
The Green Energy Fantasy
by Keith Lockitch | February 25, 2009
Stop Blaming Capitalism for Government Failures
by Yaron Brook | November 13, 2008
The Resurgence of Big Government
by Yaron Brook | Fall 2008
The Government Did It
by Yaron Brook | July 18, 2008
From Flat World To Free World
by Yaron Brook | June 26, 2008
How Government Makes Disasters More Disastrous
by Tom Bowden | April 29, 2008
Life And Taxes
by Yaron Brook | April 17, 2008
War On Free Political Speech
by Yaron Brook | March 21, 2008
To Stimulate The Economy, Liberate It
by Yaron Brook | February 14, 2008
Exploiters vs. Victims in the Grocery Strike
by Elan Journo | January 30, 2004
Prescription Drug Benefits Violate the Rights of Drug Companies
by Onkar Ghate | July 24, 2002
Drop the Antitrust Case Against Microsoft
by Onkar Ghate | March 17, 2002

MORE FROM THE BLOG:

Government And Business in Voice for Reason
Government & BusinessRegulations

What Are The Search Results When You Google ‘Antitrust’?

by Tom Bowden | April 18, 2013 | Investor’s Business Daily

Yielding to the European Union’s threat of massive fines, Google will reportedly change the way it displays search results and, in some cases, even include links to rival search engines.

Earlier this year, the Internet giant capitulated to the U.S. Federal Trade Commission after a 19-month investigation, promising to change its advertising practices.

How do the world’s most powerful governments get away with treating Google like a villain? After all, this is a company that has built a reputation for improving people’s lives in a thousand ways.

What Are The Search Results When You Google 'Antitrust'? [Investor's Business Daily]

Just ask the millions of visitors who type keywords into Google’s legendary search engine, or who use the many other services — email, maps, videos, travel arrangements, comparison shopping, books, and the like — that Google offers for free. Yes, for free.

The answer lies buried in the unavoidable vagaries of antitrust law — an irrational regime that grants competitive grumblings the exalted status of legal injuries, then empowers government enforcers to override market outcomes.

In Google’s case, the grumblings are coming from rivals and advertisers — and when their complaints are boiled down to essentials, they’re angry that Google pursues its own profits without regard to the welfare or viability of competitors.

When rivals complain of “search bias,” for example, what they mean is that Google’s search results display the company’s own services — such as Google Maps, Google Travel, or Google Shopping — in prominent positions, to enhance traffic at those sites.

But why would Google do otherwise? Like any other business, it’s trying to make money for its shareholders. Since more than 95% of its revenues come from advertising, Google stands to gain by attracting more users.

Likewise, when advertisers complain about their contracts with Google, what they mean is that Google makes it difficult for them to transfer ad campaigns from Google over to rival platforms, or to compare the various platforms’ efficiency.

But why would Google act differently? Businesses don’t succeed by bending over backward to make it easier for rivals to take away their customers.

It hardly needs explaining why Google’s practices might generate frustration and resentment in certain quarters — that’s to be expected in the hurly burly of the marketplace.

But what’s not so obvious is how such resentments can be confused with genuine legal injuries that merit the attention of government prosecutors. The explanation is to be found in antitrust laws that actually make it illegal for a company like Google to maintain a laser focus on its own corporate self-interest.

If read literally, the Sherman Act of 1890 (and the European Union’s legal equivalents) prohibit virtually every action a profit-seeking business needs to survive.

For example, any price a company might set can be legally condemned — as “predatory” if it’s lower than the competition, “monopolistic” if higher, or “collusive” if the same.

The laws’ astonishing breadth allows prosecutors, regulators, and judges to pose as kindly protectors of business, reading the laws “reasonably” so as to blunt their draconian terms.

But exactly which practices will be permitted and which penalized? It’s usually impossible to know in advance.

The resulting omnipresent threat of antitrust prosecution forces companies like Google to do business with one eye on the bottom line and the other on their antitrust foes.

Companies must perpetually adjust to the latest threats, pronouncements, and decisions emanating from the worldwide antitrust establishment.

And to complicate matters, today’s victim may be tomorrow’s attacker, if a rival’s success makes it vulnerable to antitrust pressure.

According to the Center for Responsive Politics, Google spent more than $18 million on lobbying last year (about 23 times as much as it spent in 2006), making it the eighth-largest spender among companies in all industries (not counting the costs of dealing with foreign threats).

It now looks as if the EU’s threatened fines have been “traded” for concessions designed to help Google’s competitors.

But before the shakedown, uh, settlement is finalized, Google must demonstrate how its changes will work, in a phase known ludicrously as “market testing,” during which those same competitors can lodge still more objections.

Interesting, isn’t it, how these things work out? Antitrust authorities threaten to inflict massive damage on the world’s most successful companies. Then the targets of these investigations, rather than litigate and risk disaster, simply cave in, “voluntarily” agreeing to change their business practices.

In this way, regulators — who, let’s face it, are just politicians without the charisma — deliver outcomes that those companies’ resentful rivals and customers could never earn on a free market.

Farther down this road, we can foresee an antitrust-hobbled Google that behaves more like a regulated public utility than an innovative tech dynamo. Is that the future we want?

About The Author

Tom Bowden

Analyst and Outreach Liaison, Ayn Rand Institute