Why is Google in Antitrust Hot Water?
Google recently revealed what we all probably already believed: Google manipulates organic search results to favor certain vendors and services. Many believe that this is an antitrust violation because it is using its market power to drive business to certain vendors or sellers, thus excluding others. The FTC investigated this issue and decided not to file an antitrust case (much to Microsoft’s chagrin, I’m sure).
Google is not only ascendant, it is dominant. It represents some 75% of search activity on the internet in the United States according to the Federal Trade Commission. So, the antitrust allegation goes something like this: Google is using market power to exclude rivals’ services that could otherwise be found and chosen. It settled an FTC investigation a couple of years ago about similar allegations–but it appears to have been done a consolation to an FTC that may have been overwhelmed.
Is Free Speech a Good Defense to an Antitrust Violation?
Google’s primary response to these allegations has been to argue…free speech? Really?
Let’s give them credit: it’s a creative argument–one for which there is plenty of precedent. Basically Google is saying that it is a service provider: customers come to Google to see what Google thinks is important and responsive to to a request for information. That is essentially what a search request is. So why should Google be treated any differently than a newspaper editor who puts stories about what he thinks his readers care about on the front page and bury stories (or ads) about his competitors on the last page? Google is thus an editor of public information. Sounds reasonable.
I’m not sure I buy the analogy. But let’s first unpack whether it hurts consumers–e.g., the public. I’m not sure I see how it does (yet). In the antitrust world, the key question is whether the alleged misdeed hurts consumers. An agreement between two competitors or two players in the market to restrict competition or raise prices is a per se violation–injury to consumers is presumed. All other cases are examined as an evidentiary question…so you have to prove that consumers are hurt by Google’s actions. I’m not sure we’ve seen any of that proof yet.
That being said, if that proof existed, I cannot see how the free speech defense would work. The restriction would be subject to strict scrutiny review: meaning that the antitrust law as applied would have to be shown to serve a substantial governmental interest, and that the restriction is narrowly tailored to remedy the injury.
The first part of the test is easy: the antitrust laws have been around for more than a century and are well-ensconced in our marketplace thinking. It won’t take much to show that protecting competition is a legitimate, substantial governmental interest. The second is easy enough too: asking that Google use a neutral arbiter (i.e., an algorithm that does not prefer its own services or pet vendors) is pretty narrowly tailored. This is especially so given that for years Google has insisted that it did use a neutral algorithm.
What Happens Next in this Antitrust / First Amendment Battle?
Without proof of consumer injury, I don’t see this case getting very far off the ground. How do you quantify a specific search? As a litigator, I cannot imagine having to reverse-engineer searches to discern how much or how little market manipulation occurred because of this practice. That may be because I’m sort of a closet luddite and I glaze over when I hear the word “algorithm.” That complexity is probably why Google’s competitors urged governmental interference for so long.
I also am skeptical about the “market power” argument that is being applied. Sure, Google has 75% of the market. But so does Facebook, in a way (if not more–Facebook has more direct access to consumers and can target them better). Apple has its Safari browser (granted, it sucks, but hey it’s there). The internet has really changed how people interact. Nobody has to use Google. We are outside the age of the essential facilities doctrine. If Google were the only railroad station in most towns, the idea might have some legs. But people use Google because it seems to present them with the answers to their questions that they are satisfied with. They can easily go check Bing or Explorer, or Safari. Nothing stops them.
So while I don’t think Google’s free speech defense is all that great, I do think it has a pretty good market defense, at least right now given what we know. If I were Google, however, I might be wary that my admission is going to bring a consumer fraud class my way.