The Market Realities that Undermined the FTC's Antitrust Case Against Google

Harvard Journal of Law and Technology Occasional Paper Series - July 2013

18 Pages Posted: 17 May 2018

See all articles by Geoffrey A. Manne

Geoffrey A. Manne

International Center for Law & Economics (ICLE)

William Rinehart

American Action Forum; International Center for Law and Economics; John Hopkins University, School of Advanced International Studies

Date Written: July 31, 2013

Abstract

The FTC completed its antitrust investigation of Google in 2013 and, finding no evidence of antitrust violations, decided not to bring an enforcement action against the company. Although the FTC has concluded its investigation, Google’s competitors and critics, unhappy with the outcome, continue to raise issues and criticize the FTC’s decision. In this brief article we discuss the FTC’s decision and assess the merits of the claims still being raised. The critics’ case against Google rests on certain assumptions about how the markets in which it operates function. But these are technology markets, constantly evolving and complex; most assumptions, and even “conclusions” based on data, are imperfect at best. The market realities in which Google operates, while not dispositive, strongly challenge the logic and thus the relevance of many of the contentions still being maintained by Google’s critics.

The public claims by Google’s critics and the best information we have on the thinking of the regulators investigating the company reflect an over-simplified and inaccurate conception of the competitive conditions facing Google and its competitors. The reality is far more complex and, if properly understood, paints a picture that undermines the basic, essential elements of an antitrust case against the company.

Competitors continue to claim that their problems competing with Google are cognizable antitrust problems rather than the consequences of vigorous competition, shifting consumer demand, and their own business decisions. However, there is significant evidence indicating that these claims are unfounded.

Keywords: Google, antitrust, search neutrality, FTC, search engines, search bias, market definition, product innovation, business model innovation

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

Suggested Citation

Manne, Geoffrey and Rinehart, William, The Market Realities that Undermined the FTC's Antitrust Case Against Google (July 31, 2013). Harvard Journal of Law and Technology Occasional Paper Series - July 2013. Available at SSRN: https://ssrn.com/abstract=3172435

Geoffrey Manne (Contact Author)

International Center for Law & Economics (ICLE) ( email )

2117 NE Oregon St.
Suite 501
Portland, OR 97232
United States
503-770-0076 (Phone)

HOME PAGE: http://www.laweconcenter.org

William Rinehart

American Action Forum ( email )

United States

International Center for Law and Economics ( email )

United States

John Hopkins University, School of Advanced International Studies ( email )

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