48 Pages Posted: 14 Aug 2012 Last revised: 22 Apr 2013
Date Written: August 2, 2012
The Federal Trade Commission recently voted unanimously to close the portion of its antitrust investigation into Google's search practices without filing a complaint. The agency apparently concluded that the firm's practice of favoring its own content in search results did not violate U.S. antitrust laws. This paper suggests that the FTC's decision was correct. Seeking the competitive advantages inherent in integration, which is what preferential treatment of one’s own property is about, is usually not unlawful. This article examines whether “essential facilities” and the duty-to-deal nonetheless provide a basis for prohibiting this practice, as some have suggested, and concludes that they do not.
On the threshold monopoly power issue, most assume, based on Google’s high percentage of general search queries, that Google has monopoly power. This paper analyzes why this assumption, though intuitively appealing, is incorrect. It also considers other problems with invoking either principle in the display of search results. For essential facilities, for example, important issues regarding which is the alleged essential facility, whether there is denial of access, and whether the facility is capable of being shared have been largely overlooked. Yet they present major challenges for the application of the doctrine in the search context. For the duty-to-deal, it is equally difficult to see how the principle, rarely applicable, can be made to apply.
This paper also questions a fundamental assumption embedded in the discourse -- that the favoring of one’s own property in search results, being good for a search engine, must be anticompetitive. Antitrust law is consumer-centric, and practices that benefit search users, while also benefiting the search engine, would not be anticompetitive even if they incidentally hurt some competing providers.
The paper ends with a discussion of some policy issues and concludes that they generally cut in favor of allowing search engines to incorporate new features and redesign their product, even if that might unfortunately adversely impact some competitors in ancillary markets.
Keywords: search engines, Google, search neutrality, search bias, Internet search, essential facilities, essential facility, duty to deal, search ranking, natural monopoly, monopoly power
JEL Classification: K21, L12, L40, L42, O31, O33, O38
Suggested Citation: Suggested Citation
Lao, Marina, Search, Essential Facilities, and the Antitrust Duty to Deal (August 2, 2012). 11 Northwestern Journal of Technology and Intellectual Property 275 (2013). Available at SSRN: https://ssrn.com/abstract=2128613 or http://dx.doi.org/10.2139/ssrn.2128613