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FTC Folds, Admits Google Never Broke Antitrust Laws

Over the past two years, we have heard an endless stream of pundits, analysts and lobbyists weigh in on the possible antitrust case against Google.  The most outrageous such commentary came from Thomas Barnett, a partner at Covington and Burling and lobbyist for Microsoft and other Google competitors.  When interviewed for a CNET article, Barnett went so far as to suggest that Google should “be careful” lest it find itself being forcibly broken up into smaller companies.  Barnett, however, was not alone in his outlandish speculation.  When the FTC hired veteran Paul Weiss litigator Beth Wilkinson, numerous publications pegged this as a watershed moment in the process, and a sure sign that an actual case was on the horizon.  PC Mag offered this brilliant quip:

New reports released late Friday by Reuters indicate that the FTC is focusing its laser-like sights on Google for a possible antitrust case – and by possible, we mean, “most assuredly likely.”

Of course, all of the chatter about a possible antitrust case against Google was nothing more than mindless speculation (and in some instances posturing by rivals).  The media’s coverage of the matter was largely shallow and vapid, lacking any real analysis.  Most publications were content to hype the possible case and cite unnamed sources who, in turn, had heard from other unnamed sources who knew somebody at the FTC who had told them that the case was “almost definitely really an absolute possibility.”

All along, the real antitrust lawyers out there – and folks like Daniel Fisher at Forbes – have known that a possible government antitrust case against Google was pure nonsense.  In what was likely his final piece of scholarship before passing away, Robert Bork (along with Gregory Sidak) authored a brilliant and comprehensive analysis of Google’s possible exposure to antitrust liability.  See Robert H. Bork & J. Gregory Sidak, Journal of Competition Law and Economics, Vol. 8 (2012) “What Does the Chicago School Teach About Internet Search and the Antitrust Treatment of Google.”  Needless to say, Bork concluded that the Google antitrust hype was nonsense.  And, for once, I found myself in complete agreement with Mr. Bork.

The truth is that the facts never supported an antitrust case against Google.  There are numerous flaws in any such case.  Among the most significant, in my view:

  • Lack of Harm to Competition:  Everyone in the business has heard the old adage that antitrust laws exist to protect competition, not competitors.  That is true here.  Regardless of what Google may or may not have been doing vis-à-vis its competitors, there is scant evidence that competition is actually suffering.  If a consumer searches for flights from Atlanta to DC, Google preferences its own results and the consumer books through Google but pays the same price, where is the harm to competition?  Sure, maybe Expedia loses money, but harm to the actual consumer is speculative at best.
  • Problems with a Monopolization Claim:  When competitors have tried to attack Google on antitrust grounds, they have focused on small bits and pieces of Google’s overall operation.  Nobody has come out and argued that Google gained its 70% market share in the US internet search market through anticompetitive or predatory conduct.  Instead, critics have attacked relatively limited elements of Google’s operation.  Bing complained that Google would not allow it to fully index Youtube videos.  Expedia complained about Google prioritizing its own flight results.  If you try to build an antitrust case on these types of allegations, you will not get far.  There are significant problems with actual market definitions.  Is the market internet searches for flights or the market in Google search results for flights?  The case starts to sound a lot like an essential facilities argument (competitors claiming they need to be able to rank at the top of Google’s search results to compete).

The FTC knows this.  And that is why, on January 3, the FTC reached a settlement with Google and closed its investigation.  According to the FTC:

Google will meet its prior commitments to allow competitors access – on fair, reasonable, and non-discriminatory terms – to patents on critical standardized technologies needed to make popular devices such as smart phones, laptop and tablet computers, and gaming consoles. In a separate letter of commitment to the Commission, Google has agreed to give online advertisers more flexibility to simultaneously manage ad campaigns on Google’s AdWords platform and on rival ad platforms; and to refrain from misappropriating online content from so-called “vertical” websites that focus on specific categories such as shopping or travel for use in its own vertical offerings.

The bottom line:  The FTC folded and Google agreed to certain voluntary changes.  Because there never was an actual antitrust case here to begin with.

Jonathan Pollard is a trial lawyer and litigator based in Fort Lauderdale, Florida.  He focuses his practice on cases involving employment disputes, antitrust and business torts.  He has a particular interest in non-compete agreements.  He represents clients in Miami, Fort Lauderdale, Boca Raton, West Palm Beach, Jupiter, Fort Myers, Tampa, and Orlando.

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