Antitrust and harm to consumers: The decision to drop the Google case

Posted on January 4, 2013  /  0 Comments

I entered the policy and regulation space through an unusual door: the AT&T Divestiture Case of the early 1980s. There the evidence of consumer harm was clear to all: Lily Tomlin had seen to that. That was not the case with Google.

“The way they managed to escape it is through a barrage of not only political officials but also academics aligned against doing very much in this particular case,” said Herbert Hovenkamp, a professor of antitrust law at the University of Iowa who has worked as a paid adviser to Google in the past. “The first sign of a bad antitrust case is lack of consumer harm, and there just was not any consumer harm emerging in this very long investigation.”

The F.T.C. had put serious effort into its investigation of Google. Jon Leibowitz, the agency’s chairman, has long advocated for the commission to flex its muscle as an enforcer of antitrust laws, and the commission had hired high-powered consultants, including Beth A. Wilkinson, an experienced litigator, and Richard J. Gilbert, a well-known economist.

Still, Mr. Leibowitz said during a news conference announcing the result of the inquiry, the evidence showed that Google “doesn’t violate American antitrust laws.”

Full report.

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