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http://ssrn.com/abstract=1807951
 
 

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If Search Neutrality is the Answer, What's the Question?


Geoffrey A. Manne


International Center for Law & Economics (ICLE)

Joshua D. Wright


Federal Trade Commission; George Mason University School of Law

April 12, 2011

ICLE Antitrust & Consumer Protection Program White Paper Series
Lewis & Clark Law School Legal Studies Research Paper No. 2011-14
George Mason Law & Economics Research Paper No. 11-37

Abstract:     
In recent months a veritable legal and policy frenzy has erupted around Google generally, and more specifically concerning how its search activities should be regulated by government authorities around the world in the name of ensuring “search neutrality.” Concerns with search engine bias have led to a menu of proposed regulatory reactions. Although the debate has focused upon possible remedies to the “problem” presented by a range of Google’s business decisions, it has largely missed the predicate question of whether search engine bias is the product of market failure or otherwise generates significant economic or social harms meriting regulatory intervention in the first place. “Search neutrality” by its very terminology presupposes that mandatory neutrality or some imposition of restrictions on search engine bias is desirable, but it is an open question whether advocates of search neutrality have demonstrated that there is a problem necessitating any of the various prescribed remedies. This paper attempts to answer that question, and we evaluate both the economic and non-economic costs and benefits of search bias, as well as the solutions proposed to remedy perceived costs. We demonstrate that search bias is the product of the competitive process and link the search bias debate to the economic and empirical literature on vertical integration and the generally-efficient and pro-competitive incentives for a vertically integrated firm to favor its own content. We conclude that neither an ex ante regulatory restriction on search engine bias nor the imposition of an antitrust duty to deal upon Google would benefit consumers. Moreover, in considering the proposed remedies, we find that by they substitute away from the traditional antitrust consumer welfare standard, and would impose costs exceeding any potential benefits.

Number of Pages in PDF File: 95

Keywords: algorithm, bomb, Bracha, commission, Customer Reservation Systems, engines, essential facilities, federal, hits, Internet, link farms, mergers, Microsoft, monopolization, non-objective, organic, Pasquale, precision, Raff, ranking, recall, regulations, relevance, spam logs, technology, unadulterated

JEL Classification: K00, K21, L10, L12, L40, L42, O31, O33, O38

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Date posted: April 14, 2011 ; Last revised: October 29, 2012

Suggested Citation

Manne, Geoffrey A. and Wright, Joshua D., If Search Neutrality is the Answer, What's the Question? (April 12, 2011). ICLE Antitrust & Consumer Protection Program White Paper Series; Lewis & Clark Law School Legal Studies Research Paper No. 2011-14; George Mason Law & Economics Research Paper No. 11-37. Available at SSRN: http://ssrn.com/abstract=1807951 or http://dx.doi.org/10.2139/ssrn.1807951

Contact Information

Geoffrey A. Manne (Contact Author)
International Center for Law & Economics (ICLE) ( email )
2325 East Burnside St.
Suite 301
Portland, OR 97214
United States
503-770-0650 (Phone)
HOME PAGE: http://www.laweconcenter.org
Joshua D. Wright
Federal Trade Commission ( email )
601 New Jersey Ave., NW
Washington, DC 20580
United States
George Mason University School of Law ( email )
3301 Fairfax Drive
Arlington, VA 22201
United States
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