Protecting Competition Versus Protecting Competitors: Assessing the Antitrust Complaints Against Google
A fundamental challenge—arguably the fundamental challenge—in making antitrust enforcement economically sound is to distinguish protecting competition from protecting competitors. The emergence of highly successful Internet companies has brought this issue to the fore internationally. Although not unique in this regard, Google is one example of a highly successful company that has been the subject of investigations by competition authorities. In particular, it has had to answer complaints in many jurisdictions, including India, that alleged bias in its algorithms toward its own “properties” violates competition statutes. In this article, we evaluate these allegations. Although we do discuss market conditions in the Indian Internet sector and use examples from India to illustrate our points, the points we make are not specific to India. One of us (Salinger) has made similar points with respect to the investigation by the U.S. Federal Trade Commission (FTC) into Google’s search practices, and we believe that the same points apply to any of the jurisdictions that have undertaken or are in the midst of similar investigations. Moreover, although our analysis does rely heavily on the nature of Internet search and search competition, it contains more general lessons for evaluating unilateral conduct in high technology industries.
The apparently universal acceptance of the principle that antitrust laws protect competition and not competitors masks disagreement about what the principle means. To seek to implement the principle, virtually all competition authorities follow a discipline for evaluating allegations of anticompetitive conduct. Such investigations entail four key steps: (1) categorization of the conduct, (2) market definition, (3) assessment of dominance or market power, and (4) analysis of competitive effects. Ultimately, the last step is the one that matters most, as the objective of competition laws is to condemn anticompetitive behavior. Done correctly, the first three steps are tools that clarify the analysis of the fourth step. The pitfall to avoid is a completely mechanical approach to the first three steps that fails to recognize the ultimate goal of analyzing competitive effects correctly and that ends up obscuring rather than clarifying the effects analysis. Our primary point is the importance of maintaining the broader perspective of the fourth step throughout the analysis.
Geeta Gouri & Michael A. Salinger, Protecting Competition Versus Protecting Competitors: Assessing the Antitrust Complaints Against Google, 2 Criterion J. on Innovation 531 (2017).