Huffington Post Series: "The DOJ, Google and the Consent Decree"
The Huffington Post brings us a three-part series this week on “the Department of Justice, Google, and the Consent Decree.” The first installment from Wharton professor Eric Clemons and attorney Nehal Madhani challenges the notion that consumer happiness is the best measure of consumer welfare in the marketplace.
In a key section, reminiscent of Professor Tim Wu’s argument in his Wall Street Journal op-ed late last year, the authors observe:
“Finally, it may not be obvious, but short-term consumer gains can still represent long-term harm to the competitive process and long-term harm to consumers… Free or subsidized offerings can appear to offer additional choice, but they often kill competition, harming the competitive process. This inevitably reduces consumer choice, which often reduces the new player’s incentive to innovative and allows the new player to charge substantially higher prices.”
Clemons and Madhani conclude by saying:
“Consumers are happy. And they are being harmed. While current consumer happiness is important, it is not and indeed cannot be the sole measure of antitrust abuse.”
According to The Huffington Post, the series will continue through the end of the week. The first installment can be found here.