Academics studying everything from economics to competition among search engines and social media offered their theories on the marketplace as well as grounds for antitrust authority by regulators at George Mason University law school’s second annual conference on Competition, Search and Social Media Wednesday.
May 17, 2012
Ronald Cass, Dean Emeritus of Boston University Law School, offered history of FTC and DOJ investigating companies including AT&T, Microsoft and IBm on antitrust issues. He said a problem he sees is that there is a tendency for regulators to define the market in narrow terms as a market is changing. He said these antitrust cases often result in settlements, but the legal issues keep companies distracted for years and can be traced to the companies missing opportunities to jump in on innovation during market shifts.
Cass said that regardless of the outcome, in bringing cases regulators “actually alter the dynamic of market competition” and he cautioned antitrust authorities not to loo at too narrow a market as they “gin up cases” in search and social media.
Robert Hahn, Director of Economics at Oxford University, studies how Amazon, Apple, Google and Facebook compete sees good, dynamic competition. He said that there should be “light-handed” regulation in this space after the fact — not before the fact. He said light-handed regulation can be useful to ensure companies don’t hurt consumers. He said regulators can be proactive by doing things to reduce bottlenecks that are creating harm — such as the lack of broadband spectrum.
Joshua Wright, a law professor at George Mason University, offered GMU’s study of 1000 search queries and data on bias bases on the percentage of search engines like Google, Bing and Blekko offering their own content above that of others in search results.
Marino Lao, Seton Hall University law school professor, discussed the legal merits of any potential antitrust suit against Google, noting that a core complaint is biased results even though all search engines offer biased results. She also said that legally an algorithm does not constitute a business relationship and that historically no court has required a monopolist to grant a competitor access without compensation. Lao said this creates an odd question about remedies as the organic search results Google offers are free to both users and businesses that may get ranked in the listings.
You can’t order Google to rank a business higher without compensation and yet you also can’t order Google to change its business model to accept compensation in exchange for higher ranking search results, Lao said.
But she later added that if evidence were to show Google isn’t just favoring its own content, but threatening to demote a site for advertising on a competitor like Bing, then Google would have a problem with antitrust authorities.