Recent media reports suggest the Federal Trade Commission (FTC) is expected soon to end its 19-month antitrust investigation of Google with a settlement agreement that will exclude the most controversial remedy proposed by the company’s competitors and critics: search regulation. While Chairman Jon Leibowitz and I have different philosophies when it comes to antitrust and expanding the reach of the FTC, I have never doubted that we share the goal of protecting consumers in a vibrant, competitive marketplace. If these recent reports are correct, the deal will be a victory for consumers, the tech industry and the FTC.
While I disagree with the approach taken by the FTC in its broad investigation because of potential harm to innovation that such investigations can inflict, it is abundantly clear that the FTC has been extremely thorough, looking at thousands of documents, meeting with the parties multiple times and now, by all accounts, concluding there is no legal case for search bias. Google has earned its status as one of the world’s most popular brands. There is nothing illegal about being successful, no matter what Google’s rivals say.
Indeed, Google’s competitors, led by Microsoft and the FairSearch coalition, have been clamoring for government action against the company for years. To the FTC’s credit, it appears this extraordinarily well-funded public relations and lobbying ploy will not bear fruit for FairSearch and its accusation of search bias by Google. In the end, the FTC seems to have recalled the wisdom offered in 1993 by the Supreme Court, which affirmed that the purpose of our antitrust laws “is not to protect businesses from the working of the market; it is to protect the public from the failure of the market.”
For the FTC, which had to decide whether to push for punitive sanctions on Google, the distinction was crucial. It’s the difference between protecting consumers and picking winners and losers among competitors in a vibrantly competitive market. Today, competition flourishes on the Internet, with new companies emerging almost daily to compete for consumers’ eyes and clicks. The FTC’s decision preserves that competitive environment and sends a clear message that the goal of our nation’s antitrust laws remains focused on the welfare of consumers and not on competitive advantages for competitors.
As tidbits of information leak about the details of a potential settlement agreement, Google’s rivals already are crying foul (even before the case has concluded), ignoring the exhaustive efforts of the FTC and its findings, and absurdly calling for the Justice Department to launch its own investigation in light of the apparent failure to get the result they wanted through the FTC.
This settlement also should sound the death knell for the wrongheaded notion of “search neutrality,” long promoted by FairSearch. Commentators throughout the political and information-technology spectrum as well as antitrust experts have derided this as no more than a ploy by Google’s competitors to arbitrarily restrict the company’s ability to innovate. Federal courts have ruled on this, and the Justice Department reviewed the concept when it approved the Google-ITA acquisition. In every case, the concept was rejected.
The FTC and Mr. Leibowitz are to be commended if their decision is to close this investigation and not succumb to political pressure from FairSearch and other self-interested parties. Bringing a case when the facts are not there would be a travesty. Reshaping the law to fit scant evidence would be irresponsible. Former FTC Chairman William E. Kovacic was right to note that some would measure the success of our antitrust agencies in terms of “litigation activity,” but not every investigation should lead to an enforcement action. Our agencies also should be commended for correctly enforcing our antitrust laws.
Google clearly has realized that the more time and resources it spends mired in a legal battle with the FTC, the less it has to keep innovating the products and services that made it successful in the first place. When Google works constructively with the FTC and agrees to a few reasonable steps that won’t harm the company or set any damaging precedents for future cases, it and the FTC both prevail.
Markets evolve quickly in today’s cyberspace, with established firms under constant pressure to out-innovate, out-advertise and out-compete the next wave of startups. Nobody predicted Twitter’s meteoric rise a decade ago, just as nobody but Mark Zuckerberg foresaw Facebook becoming a household name. Today, no one can predict which established firms will continue to thrive and which will wither under the heat of one of our nation’s most dynamic marketplaces.
Orson Swindle, former FTC commissioner, is an adviser to Google.