Focus Areas:    Antitrust | FTC | Sherman Act

Google and the Limits of Antitrust: The Case Against the Antitrust Case Against Google

34 Harv. J.L. & Pub. Pol'y 171 (2011) View Original

Summary

The antitrust landscape changed dramatically in the last decade. Within the last two years alone, the Department of Justice has held hearings on the appropriate scope of Section 2 of the Sherman Act and has issued, then repudiated, a comprehensive Report. During the same time, the European Commission has become an aggressive leader in single‐firm conduct enforcement by bringing abuse of dominance actions and assessing heavy fines against firms including Qualcomm, Intel, and Microsoft. In the United States, two of the most significant characteristics of the new antitrust approach have been the increased focus on innovative companies in high‐tech industries and the diminished concern that erroneous antitrust interventions will hinder economic growth. This focus on high‐tech industries is dangerous, and the concerns regarding erroneous interventions should not be dismissed too lightly.

This Article offers a comprehensive, cautionary tale in the context of a detailed factual, legal, and economic analysis of the next Microsoft: the theoretical, but perhaps imminent, enforcement against Google. Close scrutiny of the complex economics of Google’s disputed technology and business practices reveals a range of procompetitive explanations. Economic complexity and ambiguity, coupled with an insufficiently deferential approach to innovative technology and pricing practices in the most relevant case law, portend a potentially erroneous—and costly—result.

Our analysis, by contrast, embraces the cautious and evidence‐based approach to uncertainty, complexity, and dynamic innovation contained within the well‐established error‐cost framework. As we demonstrate, though there is an abundance of error‐cost concern in the Supreme Court precedent, there is a real risk that the current, aggressive approach to antitrust error, coupled with the uncertain economics of Google’s innovative conduct, will yield a costly intervention. The point is not that we know that Google’s conduct is procompetitive, but rather that the very uncertainty surrounding it counsels caution, not aggression.

 

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