Today, the Federal Trade Commission announced that it found no grounds for legal action on complaints about Google's search and advertising practices. (The agency did, however, release a settlement governing Google's use of Standards-Essential Patents for smartphone technologies). The following statement can be attributed to Berin Szoka, President of TechFreedom:
The FTC's decision is a victory not just for Google but for regulatory humility and the freedom of product design—two bedrocks of Internet Freedom. The FTC has rightly set a high bar for restricting companies' ability to tweak their own products by requiring clear proof that product changes are demonstrably anti-competitive.
Even without litigation, antitrust plays an important role in the background by encouraging companies to tame their own "aggressive" business practices. That's the best way to strike the delicate balance between encouraging robust competition and protecting consumers from true abuses of market power. But that dynamic is only healthy when the line companies are toeing is the one established by antitrust case law—not merely agency threats.
Today's decision sets a dangerous precedent, as Commissioners Rosch and Ohlhausen note: The other three Commissioners apparently made clear their "strong concerns" about Google's search and advertising practices, and apparently insisted that Google make two voluntary concessions: (1) allow advertisers to sync ad campaigns on multiple platforms and (2) to let websites opt-out of "vertical" Google search products while remaining in "organic" (basic) search. Whether or not these are good for consumers, "strong concerns" alone cannot justify strong-arming any company into changing their business practices or product design. If these changes were required to address antitrust violations, the FTC could have, and should have, brought, and settled, a complaint in a truly enforceable consent decree. Since the FTC concedes it could establish no violation of law, it is inappropriate for the agency to impose such conditions—and unclear that they can actually enforce them.
Today's precedent thus sows the seeds for great mischief, allowing the FTC to wave the sword of its broad Section 5 powers to extract nominally voluntary concessions. As Commissioner Rosch notes, the sooner the FTC sets clear limits to Section 5, the better—for everyone.
Szoka has written extensively on Google, this investigation, and online search antitrust issues especially with TechFreedom Senior Fellow Geoffrey Manne, including:
- Skepticism Needed on Senate Call for FTC Probe of Google (Manne & Szoka on Forbes.com)
- Top 10 Antitrust Fallacies to Watch for at the Google Antitrust Hearing (Manne & Szoka on Forbes.com)
- First Microsoft, Now Google: Does the Government Have It In for Consumers? (Manne, Szoka and Wright on C-Net)
- Section 5 of the FTC Act and Monopolization Cases: A Brief Primer (Manne and Szoka on Truth on the Market)