FE Editorial : Googling the competition

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SummaryThe US Federal Trade Commission’s unanimous decision to drop its almost two-year long case against Google without bringing charges over the main issue—of whether Google favours its own services in its search results, thus stifling competition—is undoubtedly a major victory for the search giant.

FTC ruling shows Google isn’t hurting competition

The US Federal Trade Commission’s unanimous decision to drop its almost two-year long case against Google without bringing charges over the main issue—of whether Google favours its own services in its search results, thus stifling competition—is undoubtedly a major victory for the search giant. But the relevant question is how the FTC’s decision affects consumers. The case against Google came about when the company’s 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 Google’s 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 Google’s 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 Google’s 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 enterprise—it 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 1990s—claiming that Microsoft was abusing its dominance by pre-installing its own Internet Explorer browser on its operating system—went 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

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