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Wright v. Rule at Columbia Law on Google and Antitrust

Charles (“Rick”) Rule, who represents Microsoft and is the head of the antitrust practice at Cadwalader, Wickersham & Taft LLP, and I had an opportunity to debate the various antitrust issues involving Google and its search engine on last week.  I didn’t have much of a chance to report here on the blog over the past week, but the Columbia Law School has done the work for me.  Here’s a recent report:

Joshua Wright, professor of law at George Mason University School of Law, took the position that there is no significant evidence that Google is guilty of antitrust violations. Even if Google, like other search engines, favors its own content when producing the results of a search request, he argued, dissatisfied customers can easily switch search engines. In other words, the competition is just a click away.
On the other side of the debate was Charles F. Rule, head of the antitrust practice at Cadwalader, Wickersham & Taft LLP. Rule, who has defended Microsoft in antitrust litigation, argued that ample anecdotal evidence exists that implicates Google in a mix of practices that have had the cumulative effect of excluding competitors’ content from appearing in a Google search, as well as monopolizing advertisers. He stressed that his opinions were his own.
Wright discussed the evolution of search engines in the last ten years. He conceded that the allegation of search bias, in which a search engine favors its own content at the expense of rivals, is a possible violation of Section 2 of the Sherman Antitrust Act. But Wright noted that leading case law indicates that the behavior in question must harm the competitive process and thereby harm consumers, to be dubbed “exclusionary.”
“We demand evidence of real harm to competition before we break out the antitrust hammer,” he said, “and I don’t think there’s significant evidence of that here. It’s not hard to switch to get what you are looking for.”
Rule dismissed the “just-a-click-away” argument at the beginning of his talk.
“It’s not quite that simple,” he said. “The fact is that because of some of Google’s practices, the company has made it difficult for other search engines like Bing to achieve the same level of performance.”
Rule explained that search engines make their money by selling eyeballs to advertisers, and cited statistics that establish Google’s long-time share of the search-engine advertising market at 90 percent and up. He offered detailed descriptions of specific Google practices that have had the alleged effect of excluding competitive search engines—not just by blocking their content, but also by denying them opportunities to reach advertisers.
“With respect to bias, you can see specific anecdotes where it appears that Google has allegedly blacklisted certain companies intentionally and, in a very focused way, degraded their results so they appear lower on the page,” he said. “But also on the advertising side, there are anecdotes that when Google perceived a potential competitive threat, it automatically dramatically increases the price competitors have to pay, sometimes five to ten thousand percent overnight.”
I would add one addendum to the description of my argument.  Rule focused more intently upon some of the issues on the advertising side with his limited time.  I focused more extensively upon on search bias.  Indeed, much of my time was allocated not to whether or not “competition is one click away” for users in some theoretical sense but rather on the empirical evidence on what has been described as search bias (including my own evidence, here, which is also discussed on the blog here, here, here and here) by both Google and Microsoft, what sort of evidence would be sufficient to satisfy the Section 2 standard for allegedly exclusionary conduct, and why I believe the apparent lack of evidence concerning harm to competition rather than merely harm to competitors remains a fatal flaw in the allegations against Google concerning search evaluated from a consumer-welfare perspective.

Filed under: antitrust, economics, federal trade commission, google, monopolization, technology