In yesterday’s issue of The Wall Street Journal, there was an article regarding Google and its bowing down to competitors regarding its Google “Places” function. The competitors (TripAdvisor, Yelp, and Citysearch) have been hurt by this feature since Google holds its “Places” and the reviews it garners higher up on the search list than competitors’ reviews (therefore, Google generally receives more hits than those companies). This has led to an antitrust investigation against Google and its practices. Googles’s competitors (surprise, surprise) support the investigation, which could ultimately injure a successful company like Google. This case proves the futility of antitrust law.
Dominick Armentano, professor emeritus at the University of Hartford, once said the following:
[A]ntitrust is special-interest law. Indeed, this was the intent of the law. The antitrust laws were created precisely to be used by smaller rivals to clobber more efficient competitors. Even today, ninety percent of the cases are one firm suing another.[i]
In the case with Google, this fact is completely out in the open. TripAdvisor, Yelp, and Citysearch, upset over Google’s popularity and thus greater ability to raise revenue, is supportive of the Federal Trade Commission’s investigation for what is deemed an “anticompetitive practice.” The FTC has yet to “accus[e Google] of wrongdoing,” but this idea that competitors even have the ability to use the law to inhibit competition is absurd. Copyright should not be an issue in this case either since many copyright lawyers believe that Google is permitted to use such reviews under the fair-use doctrine.
Furthermore, who’s to say that Google should not place its own features first? Clearly if Yelp or any of the other reviews websites had reviews from different websites, the reviews from that specific website would be placed first on the list. This is how Google makes a profit. Also, the article mentions that Google has been able to get its own users to post reviews, thus having less of a need to mention the reviews from other review sites. This is the typical case of what happened to Microsoft. The main objection in the antitrust case against Microsoft was the “bundling” of its Windows operating service with its internet browser (Internet Explorer). To say that Microsoft could not legally have done such a thing is preposterous. The same applies to Google.[ii]
Of course, TripAdvisor, Yelp, and Citysearch, as well as any other website that supports the FTC’s investigation of Google’s practices, believes in what Frédéric Bastiat called legal plunder. That is exactly what antitrust is. If we want to return to a free society, we can start by rejecting and then abolishing the special-interest and monopolistic regime that is antitrust law.
Below is a great video/resource on antitrust featuring Dr. Armentano himself.
[i] “The Anatomy of Antitrust: An Interview with Dominick Armentano,” Austrian Economics Newsletter, Fall 1998, Vol. 18, No. 3, available at http://mises.org/journals/aen/aen18_3_1.asp.
[ii] Robert P. Murphy, The Politically Incorrect Guide to Capitalism (Washington, D.C.: Regnery Publishing, Inc., 2007), 146.