The Google Question
By Marina Lao | October 19, 2012 3:36 pm

Federal Trade Commission Chairman
Jon Leibowitz recently suggested that the FTC will decide by the end of the year whether to file an antitrust complaint against Google. The core complaint against Google seems to be that its current practice of displaying specialized search results in response to certain search queries (like returning a Google map when a user searches for an address) is hurting specialized websites which depend on free user traffic from Google’s links.

It is generally not a violation of antitrust law for any integrated firm, such as Google, to seek the competitive advantages of its broad-based
activity, which is what a search engine’s favoring its own property in search results is about.  In an effort to find a basis in antitrust law to prohibit this practice, some have suggested that Google (which they characterize as a “gatekeeper” to the web) is a kind of “essential facility” or that it has a “duty to deal” with its rivals under antitrust law. However, I believe that these legal principles simply do not fit in the context of search results.

Marina Lao (Credit: Seton Hall University School of Law)

In general terms, the essential facilities doctrine holds that where a monopolist controls a resource (or facility) essential for competition that cannot be duplicated, the monopolist must share access to that facility with its competitors if it is feasible to do so.  More specifically, for the essential facilities doctrine to be applied, Google must be shown to have monopoly power in a defined market.  It is doubtful that monopoly power can be inferred from Google’s high share of the general search traffic.  Unhappy Google users can instantly switch to another search engine without incurring any penalties or costs, and competing search engines like Bing and Yahoo! can immediately increase output (search results) to meet this increased demand.  Thus, despite its high share of general search queries, Google does not have real market power, which in antitrust means having the power to raise prices and exclude competition.  Market realities, including the open architecture of the Internet, show that Google is unlikely to have the power to exclude competition in search, let alone in the broader online market.

Setting aside the question of monopoly power, the essential facilities doctrine also requires that the “facility” Google controls meet three
standards: the facility must be essential and practically infeasible to duplicate, Google must have denied competitors access to it, and the facility must be capable of being shared.  To the first point, though top ranking in Google’s organic results may provide a site with a superior platform for targeting potential customers, it is not “essential” under the strict essentiality standard that is applied.  And to the extent that there are alternative ways for businesses to promote themselves other than through Google’s free organic search results, it would seem that duplication of the facility is reasonably feasible.

The implicit premise of any denial of access claim is that the top rankings in the organic ranked results list is an essential facility.  But even
accepting such a shaky notion of an “essential facility,” there is no Google rival that has been denied access.  Quality competitor websites are still highly ranked in search results.  And because there is only one first-ranked position (the alleged essential facility), the facility is obviously incapable of being shared.  The law is clear that, in this situation, Google has no legal obligation to “share.”  That is, since the top spot is non-sharable, Google has no duty to give it up to a competitor, regardless of which product (for example, Google maps or MapQuest maps) is better by some “objective” metric.

If the essential facilities doctrine does not apply, could liability be based on the more general duty to deal?  In the 2004 Trinko case examining
the duty to deal, the Supreme Court said that the law strongly disfavors compelling even monopolists to assist their rivals.  It then distinguished and limited the scope of Aspen Skiing, an earlier case that had found a duty to deal, by stressing that the dominant ski operator in that case had a prior joint business arrangement with its competitor, which it terminated without legitimate justification.  Since there is no preexisting business relationship between Google and individual websites whose links have appeared in Google’s unpaid search results, the duty to deal should not apply.

It is important to remember that U.S. antitrust law is consumer-centric, not tailored toward protecting competitors.  Giving users more immediate search
results-even if that means presenting a search engine’s own maps and other data before any links to external websites-is generally good for consumers. Even non-dominant search engines employ the practice, which suggests that it is likely a competitive strategy aimed at satisfying perceived consumer preferences.

From a policy standpoint, it would be a questionable move to prohibit search engines from engaging in this practice.  It would effectively require
search engines to revert to providing only the traditional “ten blue links,” thereby stunting innovation.  When the Internet at-large is continually growing and evolving, it is difficult to see what competitive purpose would be served by confining search engines to the formats conceived in their early days of development.

As a former antitrust attorney at the Department of Justice, I strongly believe that antitrust enforcers should protect consumers by preventing
artificial restraints on competition and ensuring that dominant companies do not block competition.  But it is quite a different matter to attempt to build a case against Google (for displaying specialized results) around the notion that it is somehow an essential platform or that it has a duty to assist competing websites.  Probably no one, not even Google, knows how long search engines will be needed, or how users will find information in the future.  Equally important, neither the essential facilities doctrine nor the general duty to deal, in my view, would support such a case.

Marina Lao
is a Professor of Law and Maury Cartine Endowed Faculty Research Fellow at Seton Hall University School of Law, and the author of “Search,
Essential Facilities, and the Antitrust Duty to Deal,” which will appear in the next issue of the Northwestern Journal of Technology and Intellectual Property. Lao’s paper was supported by Google, but her views are her own.


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