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This Week's Media Coverage Gives FTC's Misguided Google Investigation the Intense Spotlight It Deserves


Douglas Kellogg
October 18, 2012

This week TIME magazine published a very helpful feature on the Federal Trade Commission's Google inquisition. It is worth a read for anyone interested in Internet freedom. TIME's Sam Gustin provides some great background info on the case, and makes some key points on why he says the government should be "careful" about taking action against Google.

He points out Google's strong, and earned, 60 percent-plus market share is not in an of itself a valid basis for anti-trust action. This is why the well-funded Google opponents at 'Fair Search' showed so much love for Europe's much more lenient, and pro-government, "dominance" standards at their panel event.

The article also addresses the key issue of 'consumer harm' and monopolies, "Monopoly power is defined as the “power to control price or exclude competition.” But Google’s search engine is free for users, and it’s not doing anything to prevent users from switching to a rival search engine — other than providing a superior service."

As NTU discovered with our IBOPE/Zogby poll earlier this year, consumers are certainly not feeling any harm or restriction, with 87% saying they felt they could easilty switch to a competing search engine.

TIME's piece calls out the opposition 'Fair Search' coalition as well:

"This loosely knit coalition opposing Google includes the FairSearch.org consortium, which is composed of several of Google’s competitors, most notably Microsoft, which has been waging a not-so-clandestine campaign against Google for years. FairSearch.org argues that Google has been using its market power to harm competitors illegally."

And most scathingly...

"As for Microsoft and its FairSearch.org consortium, there’s something unbecoming about companies that have been beaten in the marketplace appealing to Uncle Sam for relief. It’s kind of like a child who loses a schoolyard ballgame and then runs to the teacher claiming that Johnny didn’t let him win. Microsoft and its anti-Google allies have spent untold millions waging an overt and covert campaign designed to persuade regulators to hobble the search leader. Perhaps if these companies spent a little less time complaining and a little more time innovating, they’d have a better chance of competing in the marketplace."

Perhaps most importantly TIME also brings up the risk and severity of having the government interfere, referencing lawyer Glenn Manishin: "once government deems an economic sector “essential” it takes on an implicit responsibility to regulate everyone, whether they have monopoly power or not."

This is something NTU has been working to sound the alarm bells on with regards to this case. The potential for a permanent government foothold in this market is real. This fact also helps explain WHY the government and FTC are 'under so much pressure' (paraphrasing Gustin) to take action against Google - there is a carrot for government in this case, the FTC is unlikely to be solely interested in helping Google's competition.

This case has also drawn concern from a Democratic congressman, Rep. Jared Polis of Colorado, who told the FTC "I believe that application of anti-trust against Google would be a woefully misguided step that would threaten the very integrity of our anti-trust system, and could ultimately lead to Congressional action." NTU has also sent letters to the FTC among many efforts on this issue.

It's also worth taking a look at Manhattan Chamber of Commerce President Nancy Ploeger's piece in the Huffington Post which criticizes the government for risking the one bright spot in our economy over the past few years, the Internet. Ploeger provides some tremendous numbers on the Internet's contribution to job growth, the vast array of search options, and more. 

This case has flown under the radar a bit, but now it is getting proper attention considering the incredible amount that is at stake for Internet freedom, free markets, and consumer choice.


 

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