Washington, D.C., June 24, 2011 — Today, Google disclosed that the U.S. Federal Trade Commission has initiated a formal investigation of the company’s business practices.
The Competitive Enterprise Institute, a free market think tank, strongly criticized the FTC’s decision to investigate Google and questioned the agency’s motives in allocating its resources to scrutinizing an innovative firm in a competitive and thriving sector.
The following statement can be attributed to Ryan Radia, CEI Associate Director of Technology Studies:
Few modern markets are as vibrant and innovative as Internet search. Google and its rivals are engaged in fierce competition that has benefited consumers tremendously. Yet this FTC appears hell-bent on beating up on big, successful businesses, including Intel, Apple, and now Google. This investigation may be welcome news to Google’s rivals, but it’s bad news for consumers.
When slow-moving bureaucracies meddle with fast-moving Internet markets, consumers lose. Developing revolutionary new products is what tech firms do best. But when bureaucrats intervene, they chill novel forms of competition and distort technological evolution. Regulators barely understand how today’s digital markets work, while nobody can tell “unfair” conduct apart from the beneficial kind.
Google is far from unstoppable, as illustrated most recently by its failure to enter the social networking market. From established rivals with deep pockets to college dorm room startups, an array of forces stands ready to capitalize on Google’s failures. If Google were to engage in “unfair methods of competition” — whatever that means — its users would simply switch to competitors’ services, with advertisers close behind.
The FTC’s investigation reeks of a desperate attempt to make headlines and appear ‘relevant’ in an era when firms of all shapes and sizes must work harder than ever to keep pace with the competition. If the FTC truly cared about consumers, it would recognize and celebrate the thriving Internet marketplace and focus its limited resources on pursuing wrongdoers who are actually guilty of harming consumers.