“Therefore, the argument against Google collapses to the following nonsensical proposition: Google is sacrificing a monopoly profit in general search to gain market share in a more competitive market. This strategy is economic nonsense because it would lower Google’s total profits. In addition, as Google reduces its share in general search, it will reduce its ability to direct consumers to its specialized search products. That behavior is not likely to be profitable. Ultimately, the notion that Google is manipulating general search results to expand its market share in specialized search45 is not plausible. For Google, this practice would entail great risk and little reward. There is no reason to believe that Google is doing anything beyond competing in the search market.”
“The Chicago School of law and economics teaches—and the Supreme Court has long affirmed—that antitrust law exists to protect consumers, not competitors. Penalizing Google’s practices as anticompetitive would violate that principle, reduce dynamic competition in search, and harm the consumers that the antitrust laws are intended to protect.”
“Punishing Google for being the most effective search competitor would harm consumers and thus contradict the recognized purpose of antitrust law. Search engines epitomize dynamic competition—the virtuous cycle in which innovation drives competition, which further drives consumer-welfare-enhancing innovation. Dynamic competition in search enhances the user experience, increasing the value of search services to both consumers and advertisers. Antitrust intervention that would prohibit or circumscribe Google’s practices would punish and therefore deter the same welfare-enhancing innovations that have made Google an effective competitor. Such use of antitrust law would weaken dynamic competition, as only successful firms would need to worry about being penalized for being winners. Losers do not face monopolization suits for having lacked a superior product, business acumen, or the benefits of a historic accident.”
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Robert Bork and J. Gregory Sidak have published an interesting new [Google commissioned] report taking the position that allegations against Google in the Internet search case are unfounded, Google’s practices are not anti-competitive but rather the hallmarks of successful competitive practices and that Google’s rivals, rather than pursuing efficiency, quality or innovation, seek to punish Google using the antitrust laws.
Good law and economics or spin?
Abstract:
“Antitrust agencies in the United States and the European Union began investigating Google’s search practices in 2010. Google’s critics have consisted mainly of its competitors, particularly Microsoft, Yelp, TripAdvisor, and other search engines. They have alleged that Google is making it more difficult for them to compete by including specialized search results in general search pages and limiting access to search inputs, including “scale,” Google content, and the Android platform. Those claims contradict real-world experiences in search. They demonstrate competitors’ efforts to compete not by investing in efficiency, quality, or innovation, but by using antitrust law to punish the successful competitor. The Chicago School of law and economics teaches—and the Supreme Court has long affirmed—that antitrust law exists to protect consumers, not competitors. Penalizing Google’s practices as anticompetitive would violate that principle, reduce dynamic competition in search, and harm the consumers that the antitrust laws are intended to protect.”
For a copy of the paper see: What Does the Chicago School Teach About Internet Search and the Antitrust Treatment of Google.
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