Will U.S. bust Google for 'anti-competitive' behavior?
Boston U Law School Prof. Keith Hylton tells why Obama's Justice Department might (and might not) send its trust-busters after Google
We asked Prof. KEITH HYLTON of Boston University Law School, author of Antitrust Law: Economic Theory and Common Law Evolution (Cambridge University Press, 2003) whether Obama's Justice Department is likely to attack Google the way its predecessors went after Microsoft, Intel, IBM, AT&T, whoever happened to be Big Tech that term. His comments:
"The high tech firms tend to wind up as defendants in antitrust lawsuits lately because their markets are dominated by one big firm (e.g., Google, Microsoft, Intel), and because technology introduces new competition issues that courts have not examined before.
"Is Google likely to be a target of the new Dept of Justice? I don't think there's a clear answer... On one hand, Google has a dominant market share, which it makes it a likely target. On the other, Google is keenly aware of what happened to Microsoft and is probably making every effort to avoid the same treatment in the courts and enforcement agencies."
How can you be anti-competitive if, like Google, you give your services away? "Google's service is by no means free. It is paid for by advertisers, and those advertisers charge the sellers of final products, who in turn charge consumers... Final consumers really don't see the price they're paying for Google's service. It still remains the case that (more) competition in Google's market could lead to lower prices, as happens in most other markets.
"One way to predict who is likely to be a target is to see whether there are potential plaintiffs (or enemies) that are likely to go the Department of Justice with complaints about anticompetitive tactics. Google has already been the target of complaints by Microsoft and other firms. The Google-Yahoo partnership led Microsoft and other firms to complain... That partnership was dissolved soon after the complaints.
"The same coalition of firms that complained about the Google-Yahoo deal are sitting on the sidelines waiting for Google to do something new that would justify a fresh complaint. And Google knows that. Unlike Microsoft (before the litigation), Google is listening carefully to their lawyers and lobbyists on antitrust issues. Unlike AT&T, Google does not have to worry about a structurally-based attack on their industry (a claim that its market share is anticompetitive because it necessarily blocks competition).
"Courts focus on conduct today rather than structure, and Google benefits from that. Overall, I don't see Google as a likely target for the enforcement agencies.
"This is not because I think they never do anything evil. Google acts in self- interested, profit-maximizing ways just like every other firm. The reason Google is an unlikely target is that the firm has probably studied the lessons of the Microsoft litigation closely and presumably is trying to avoid antitrust problems. They have the money and a sufficient interest in image to pay for high-priced lawyers and lobbyists to help them avoid disputes with the enforcement agencies."