Tomorrow, the Senate Judiciary Committee will hold a hearing to receive testimony relating to the alleged anti-trust violations of Google. This hearing, entitled “The Power of Google: Serving Consumers or Threatening Competition,” will be webcast live on the Senate Judiciary webpage.
Google is an Internet advertising business, providing a search engine tool to consumers, paid for by other companies and businesses through advertising auctions. The Federal Trade Commission (FTC) has investigated a number of antitrust violation allegations have come out against Google in recent years, including an absence of transparency in advertising costs, concerns about its advertising rankings, anti-competitive actions Google is alleged to have taken against other search engine companies, and using information from other sites in order to populate its own product line.
One of the issues that will need to be addressed amid all these allegations is whether there was any harm to consumers as a result of Google’s actions. Yesterday morning, the Washington Legal Foundation held a briefing which explored that issue. David Balto, a Senior Fellow at the Center for American Progress and Jonathan S. Kanter, of Cadwalader, Wickersham & Taft, LLP debated the allegations against Google, each drawing their own conclusions as to what harm if any was suffered by the consumers. While Balto indicated that Google provided consumers the benefits of a robust search engine at no cost, reducing the barriers to performing search; Kanter countered that Google is an advertising company, and as advertising costs rise, so does consumer costs.
Kanter further emphasized that federal antitrust laws should be enforced vigorously, not through further regulation, but by applying the actual law in existence. Both agreed
that while the antitrust issues surrounding Google are only allegations, if further investigation is warranted Section 5 of the Federal Trade Commission (FTC) Act would be applicable to this process. Additionally, Kanter indicated that Section 2 of the Sherman Act may also be applicable. Section 2 of the Sherman Act was written to address the acquisition and maintenance of monopoly power by anticompetitive conduct, while Section 5 of the FTC Act prohibits entities from engaging in unfair or deceptive practices or acts in interstate commerce.
The committee’s hearing on Wednesday will be interesting to follow. Included on the witness list are the Executive Chairman of Google, Dr. Eric Schmidt, Jeff Katz, the CEO of Nextag, Inc., and Jeremy Stoppelman, Co-Founder and CEO of Yelp, Inc.