AI Law Guy

Article from Search Engine Land about Facebooks possible new search engine. Last week in the Chicago Tribune former judge and scholar Robert Bork (who is also a Google advisor) penned an opinion column arguing that by the accepted standards of antitrust law Google has done nothing legally wrong. Bork says, “There is extraordinary competition in the search engine business. Look at the proliferation of what are called vertical search sites that specialize in particular products or services, such as Amazon, Expedia, Kayak and hundreds of others.” Who Competes with Google? This question of who competes with Google — and is the market in fact competitive — is central to the analysis of European and US regulators as the antitrust investigations wind their way through “the system” and potentially to the courts. Google sees many more competitors than do its critics and has been trying for several years to widen the scope of the discussion about “search competition.” If we open the aperture to include vertical sites with a search box (e.g., Yelp, Kayak, Truila) the world looks a great deal more competitive than if we only look at web search engines, which is what most ordinary consumers think when they hear the term “search engine.” In the latter category there is Google, Bing, Blekko and DuckDuckGo. Blekko and DDG have negligible share. Bing’s share is an essentially flat 29 percent (when combined with Yahoo). In international markets such as China, Japan and Russia Google is the underdog. However in some markets, in Europe and elsewhere around the world, Google’s share of search is larger than in the US. 66 Percent or 83 Percent? In contrast to the comScore data immediately above, the Pew Internet & American Life Projectrecently found that Google was the preferred search engine of 83 percent of US survey respondents. Based on a survey of roughly 2,200 US adults, Pew observed that “Fully 83% of searchers use Google more often than any other search engine.  Yahoo is a very distant second at just 6%.” Many regulators and political officials, encouraged by anti-Google lobbying from rivals, have concluded that Google is simply too powerful and has too much control over the online ecosystem. Whether there are legal grounds for a finding of antitrust liability against Google is a different matter, but I do believe the Europeans will bring some kind of anti-competition case against the company. In addition, the various investigations going on at the federal and state levels against Google could also result in an action in the US. This is where Facebook comes in. Specter of Facebook Search Helps Google The idea that Facebook is developing a search engine that might attract some usage away from Google is precisely the kind of development that could save Google’s bacon — so to speak. The “everyone competes against us” defense that appears in the Bork article and that Google has floated several times is unlikely to be persuasive. What will be much more persuasive is the argument that the world’s largest social network will be bringing search to its 900+ million users around the globe. Recall when the Federal Trade Commission (FTC) was deciding whether to approve or block Google’s proposed $750 million acquisition of AdMob two years ago. I was one of the many dozens of people interviewed by regulators on the matter. My inference from the interview process and questions I received was that the FTC was predisposed to block the deal. Indeed, from all accounts it appeared that the FTC was going to file suit against the Google acquisition — until Apple bought Quattro Wireless. Here’s an excerpt from the FTC’s public statement about its decision not to attempt to block the acquisition, explicitly citing Quattro as the basis of its rationale: The Federal Trade Commission has closed its investigation of Google’s proposed acquisition of mobile advertising network company AdMob after thoroughly reviewing the deal and concluding that it is unlikely to harm competition in the emerging market for mobile advertising networks. In a statement issued today, the Commission said that although the combination of the two leading mobile advertising networks raised serious antitrust issues, the agency’s concerns ultimately were overshadowed by recent developments in the market, most notably a move by Apple Computer Inc. – the maker of the iPhone – to launch its own, competing mobile ad network. Facebook Like Apple for Google’s Legal Team The FTC probably decided not that the market would actually be more competitive but that Apple buying Quattro had complicated its arguments and weakened its case. Facebook is now analogous to Apple in that it provides a potential argument that the search market is competitive, and soon could be come more so if the company launches an improved search capability (whether for site search or the web more broadly). Indeed, Google’s legal team will wave the BusinessWeek article as evidence that the search market is highly dynamic, unpredictable and could change overnight. And that might be just what Google needs to escape the antitrust noose. Source