02.28.2011 0

Does Google have Antitrust issues?

  • On: 03/18/2011 10:12:48
  • In: Net Regulation
  • By Adam Bitely

    For a free market economy to function properly, competition between businesses needs to be possible. Whether the business is conducted in person or over the Internet, competition needs to thrive for the free market to function.

    Enter Senators Mike Lee (R-UT) and Herb Kohl (D-WI). These two Senators join other commentators and tech gurus who feel that Google might be in violation antitrust laws. Senator Herb Kohl, the Chairman of the Senate Judiciary Antitrust Subcommittee, is planning to hold a hearing to probe the issue.

    Antitrust laws are designed to keep business competitive in the United States by punishing those companies that are found to be a monopoly.

    As Senator Mike Lee put it in a letter to Senator Kohl, “[a]ntitrust enforcement is far preferable to the creation of inefficient government regulation and bureaucracy that could hamper innovation in these crucial industries.”

    Both Senators Lee and Kohl fear that Google may be stacking the search results on their website to favor friendly companies and harm competitors. As Lee stated, “those who follow the tech industry, as well as those responsible for enforcing antitrust laws, have concerns that Google could be acting to harm competition… Given its prominent position in the search and search-advertising markets, Google in some ways acts as a gatekeeper over a variety of Internet businesses.”

    In the letter to Kohl, Lee said, “some claim that Google may disadvantage rivals in subtle, potentially undetectable, ways. Indeed, Google’s founders recognized as early as 1998 that “a search engine could add a small factor to search results from ‘friendly’ companies, and subtract a factor from results from competitors” and that “[t]his type of bias is very difficult to detect but could still have a significant effect on the market.” Whether this type of behavior is occurring is a question of great practical significance.”

    Senator Mike Lee is even more suspicious of Google after the company admitted to using its Street View mapping service to access unprotected Wi-Fi networks, gathering extensive information about American Internet consumers, for nearly 3 years without notice to the network owners.

    The hearing that will be held by the Senate Judiciary Committee’s Atitrust Subcommittee will only be the tip of the iceberg in unearthing whether or not Google has formed an Internet monopoly—and could trigger an explosive investigation of the company.

    Senator Lee stated that this is hearing is about keeping the hand of Big Government out of the regulation arena. As he put it, “[v]igorous antitrust enforcement is almost always preferable to a system of government regulations, which will inevitably be more costly and less efficient than a free market unencumbered by anticompetitive restrictions.”

    We sure hope he is right and that the correct antitrust enforcement is implemented and the big hands of Big Government stay off the Internet.

    Adam Bitely is the Editor-in-Chief of Netrightdaily.com. You can follow him on Twitter at @adambitely.

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