Wharton Professor Clemons: Google "Certainly Worthy of Investigation"
Eric Clemons, Professor at The Wharton School, has put out “A Guide for Assessing Arguments For and Against Investigation” on the Huffington Post. In this two part series, Clemons rebuts many of Google’s favorite arguments and outlines the need for a comprehensive antitrust investigation of Google.
In particular, Clemons highlights the question of consumer harm, confronting the myth that “Google is free to consumers,” he uses the example of travel:
“When the price of aviation fuel goes up consumers pay more to travel. When cities impose taxes on tourists, or states impose taxes on gasoline, the cost of hotel stays or of operating a car go up. Why would anyone assume that the high cost of keywords that companies pay to Google, and the high costs of accessing consumers, could not possibly result in higher consumer costs? Indeed, given Google’s enormous profits, and its enormous profit margins, and its enormous cash balances, Google is charging someone vast amounts of money, and there is as yet no reason to assume that none of these charges are passed through to consumers.”
Clemons rebuts another Google line that the calls for an investigation are just sour grapes from competitors. “It is not uncommon for complaints to be brought by injured competitors,” he writes, in fact, with other topics “Google has not been silent or reticent in expressing its opinions to the US Government.”
Clemons even gives FairSearch a shout-out:
“It does seem premature to blame the companies in Fairsearch for being losers and whiners, and to conclude that they are complaining because they have lost, and that they have lost because they are somehow inferior. Foundem, Hot Wire, Trip Advisor, and Expedia, FareLogix, and Sabre aren’t complaining or looking for protection because Google does search better than they do, but because they fear that Google can use its control over search to take all of their customers away regardless of how well these other companies do their own jobs. Assessing this is the very basis of the investigation, not the subject of a mocking editorial.”
All in all, Clemons is simply calling for an investigation to learn more about Google’s behavior. “Ultimately, after we have seen the results of the investigation, we can conclude if Google is just another successful technology company, or the owner of an essential facility, or a brutal competitor that abuses its power, or the owner of an essential facility that is too important to leave unregulated.”