FE Editorial : Googling the competition

Written by The Financial Express | Updated: Jan 5 2013, 06:44am hrs
FTC ruling shows Google isnt hurting competition

The US Federal Trade Commissions unanimous decision to drop its almost two-year long case against Google without bringing charges over the main issueof whether Google favours its own services in its search results, thus stifling competitionis undoubtedly a major victory for the search giant. But the relevant question is how the FTCs decision affects consumers. The case against Google came about when the companys competitors (notably Microsoft, but also including several sector-specific search engines such as Yelp) complained that Google was misusing its search algorithm to promote its own services over those of its competitors. For example, when a user searches for flight details on Google, the first link presented is one of Googles own travel service, followed by those of competitors like Expedia. Google argued that its algorithm was neutral and that the reason its own services were placed highest was because it provided a one-stop answer, as opposed to directing users to yet another website where they could search for their answer. The FTC seems to have bought into the argument, saying that Evidence does not support a claim that Googles prominent display of its own content on its general search page was undertaken without legitimate justification. Further, Jon Leibowitz, chairman of the FTC, reiterated that on balance we did not believe that the evidence supported an FTC challenge to this aspect of Googles business under American law.

While it is true many of these laws came into being before it was imagined that a single company could become so dominant in e-commerce, the fact of the matter is that Google became so big on the basis of its own innovation and enterpriseit has no obligation to be kind to its competitors, being fair is enough. And, as onerous as users and websites may find it, they do have the option of switching over from Google to other search engines. Also, given that a similar case against Microsoft in the 1990sclaiming that Microsoft was abusing its dominance by pre-installing its own Internet Explorer browser on its operating systemwent in favour of Microsoft (no fine, only minor changes implemented), it was always going to be tough for the FTC to level a fine against Google. Google, on its part, has agreed to stop excerpting reviews from its rivals websites onto its own.

Finally, an important point to be made, one that the US Supreme Court has repeated several times, is that US antitrust law is meant to protect competition, not competitors. Googles services taking up the top spot on searches doesnt mean that it is completely side-lining its competition; users can find links to Googles competitors from the second entry onwards. The FTC decision clearly shows it thinks users have enough choice to maintain a competitive market. And competition has largely taken care of dominance issues. Microsoft hasnt been able to get anywhere near the same market share in phones and tablets and Google+ hasnt even come close to Facebook.