The Real Reason Foundem Foundered

ICLE Antitrust & Consumer Protection Research Program, White Paper 2018-02

21 Pages Posted: 30 May 2019

See all articles by Geoffrey A. Manne

Geoffrey A. Manne

International Center for Law & Economics (ICLE)

Date Written: May 3, 2018

Abstract

A pair of recent, long-form articles in the New York Times Magazine and Wired UK — the latest in a virtual journalistic cottage industry of such articles — chronicle the downfall of British price comparison site and stalwart Google provocateur, Foundem, and attribute its demise to anticompetitive behavior on the part of Google.

Unfortunately, the media’s hagiographies of Foundem and its founders, Shivaun and Adam Raff, approach the antitrust question as if it were imbued with the simple morality of a David vs. Goliath tale. The reality is far more complicated. In fact, these articles misunderstand and misstate the critical economic, business, and legal realities of Google Search, of Foundem’s claims of harm, and of the relationship between the two.

Was Foundem’s failure really the result of anticompetitive “gatekeeping” on Google’s part? Or could it simply be a pedestrian tale of yet another tech start-up that failed because its founders didn’t appreciate that a successful business is built on more than just a good idea?

While the import of the Foundem story has been misconstrued by journalists and EU regulators, it is useful in illuminating what may actually be the fundamental question regarding the antitrust fortunes of the platform economy:

What, if anything, does a successful platform “owe” to the companies that make themselves dependent upon it?

Keywords: Antitrust, Essential Facilities Doctrine, EU, Google Shopping, Search Bias

Suggested Citation

Manne, Geoffrey, The Real Reason Foundem Foundered (May 3, 2018). ICLE Antitrust & Consumer Protection Research Program, White Paper 2018-02. Available at SSRN: https://ssrn.com/abstract=3384297 or http://dx.doi.org/10.2139/ssrn.3384297

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

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