For the past year and a half the Federal Trade Commission has been investigating the potential anti-competitive effects of Google’s search-based business model. The European Union has also been pursuing antitrust complaints against Google. The main accusation is Google search bias — Google’s algorithm prioritizes links both to paid advertisers (which are shaded and labeled to indicate the payment) and to affiliated content sites. Google’s competitors complained to the FTC … but they do the same thing! For example, if you do a stock ticker search for, say AAPL (yes, I’m being cheeky), on Google, Bing, and Yahoo, each one will prioritize its own affiliated finance site, before then listing the sites of their competitors, Wall Street Journal, and so on.
We had a panel discussion on this issue at the Northwestern University-Searle Center annual conference on antitrust economics and competition policy last Friday afternoon, with panelists including Stanford’s Susan Athey (who has done some work with Microsoft) and Google’s Hal Varian and Preston McAfee. The discussion was as informed, informative, and lively as you’d expect.
There’s also a panel debate going on right now in DC in on the issue, hosted by Tech Freedom and including friend-of-Knowledge-Problem Geoff Manne, who has written extensive criticisms of the FTC investigation. I think Geoff has an important point when he asks for evidence of consumer harm in comparison to what a likely antitrust remedy would be. If, for example, the FTC required Google to modify its search algorithm to randomize the top results rather than prioritizing their affiliated content sites, then wouldn’t Microsoft and Yahoo have to implement that randomization as well? And if that’s the remedy, does that make consumers better off or worse off?
I think Bob Hahn and Peter Passell get it right when they say, as they did in a post yesterday at their blog regulation 2point0,
Indeed, anybody who’s been paying attention ought to have figured out by now that information technology is simply moving too fast to allow even the most nimble companies to grab the market goodies and lock the door behind them. …
In a hypercompetitive environment like this, where the product mix sometimes changes faster than Lady Gaga’s wardrobe, antitrust regulators would do well to pick and choose their interventions carefully. And to help get them there, academics really need to provide a more careful accounting of the state of competition in IT.
What do you think? Do you think you are “locked in” when you perform a search on a specific platform? Do you just click on the top link? Or when presented with search results do you look for specific sources that have a particular reputation or credibility to you?