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Senators Push for Antitrust Investigation Into Google

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Senators Push for Antitrust Investigation Into Google

CEI Experts Say Investigation Would Harm Competition, Not Help

Washington, D.C., December 20, 2011—Yesterday, U.S. Senators Herb Kohl (D-Wis.) and Mike Lee (R-Utah) urged the Federal Trade Commission (FTC) to launch a thorough antitrust investigation into Google. In a letter to FTC Chairman Jon Leibowitz (PDF), Sens. Kohl and Lee—Chairman and Ranking Member of the House Judiciary Antitrust Subcommittee, respectively—expressed concern that Google Search is “biased in favor of [Google’s] own secondary products and services” and that Google is thus threatening open competition in the Internet economy.

The Competitive Enterprise Institute, with a 20-plus-year record of skepticism toward antitrust regulation generally, including that directed against Google rivals, objected to the Senators’ letter.

Director of CEI’s Center for Technology and Innovation Wayne Crews argues that one of the worst effects of antitrust regulation is that it deprives consumers of the competitive response to so-called “monopolistic” behavior. Crews' full statement is below.

Antitrust interventionism can too easily undermine true market competition by serving as a kind of corporate welfare for competitors. They can sit still, and gain nonetheless.

Google’s is not the only technology by which the web is searchable; the free enterprise solution is to let the marketplace duke it out. Google, like all firms, answers to the media, policymakers, rivals, business partners, infrastructure firms, emerging search technologies, the global marketplace, shareholders, Wall Street and investors. These are the appropriate forms of "regulation" to deal with supposed "search bias" or other alleged harmful behavior. The migration from MySpace to Facebook is one example of how quickly things can change in the online world.

It wasn't long ago that many of us were “locked in” to the Yahoo and Altavista search engines. The very emergence of Google would have been impossible if the antitrust enforcers' vision of Internet market share were true.

The underlying “big is bad” arguments with respect to Google are invalid as well, leaving aside the fact that software is made out of ones and zeros and barriers to entry are as low as a dorm room with an Internet connection.

That’s because antitrust proponents presume to replace today’s competitive dynamism with an even greater “monopoly” than Google—a powerful FTC with authority over the entire Internet and commercial sector. That is an offense to principles of free enterprise that exposes the notion that antitrust proponents abhor bigness or concentration of power. They in fact embrace power, not merely economic but coercive and unearned.

Antitrust is not an alternative to regulation as the Senators imply, it is one of the worst forms of arbitrary, unaccountable regulation. A better, productive, job-enhancing investigation would instead be one into how to restrain federal antitrust interventionism generally—here and in instances such as that leading to the collapse of the AT&T/T-Mobile merger. Clumsy smokestack-era antitrust is an innovation and job killer and has no role in the dynamic Internet economy.

CEI will be watching the case and will comment further on this and other antitrust cases in the future.

 Related Materials:

- "The Antitrust Modernization Commission: Proposed Issues for Reform (PDF)," Wayne Crews' comments  submitted to the Antitrust Modernization Commission on September 30, 2004

- "Antitrust Policy as Corporate Welfare," Wayne Crews' study published in July 1997

- The Antitrust Skeptic's Bibliography, compiled by Wayne Crews