FTC's Leibowitz Comments on Google Investigation: "A Critically Important Issue"

On Wednesday, FTC Chairman Jon Leibowitz and acting head of the Justice Department’s antitrust division Sharis Pozen, testified at a House subcommittee hearing on antitrust enforcement. One exchange between Chairman Leibowitz and Rep. Ted Deutch (D-FL) on the importance of protecting competition and innovation in the Internet stood out in particular.

As Leibowitz explains the FTC’s ongoing investigation into Google, he says “…it’s a critically important issue in the Internet space where there’s been so much dynamism and so many benefits to consumers. You want that to continue.” We at FairSearch.org could not agree more. Here’s the full exchange:

REP. DEUTCH:  I appreciate that.

Going back to some comments that both of you have made — Mr. Leibowitz, I think you spoke about the importance of competition.  You used the Google Android and iPhone area.

Ms. Pozen, you spoke about competition advocacy that you do at Justice.

So the question that I have is, given that the Internet marketplace is where there is so much economic development and growth in the coming years, we obviously want to do everything we can to support competition, encourage startups, and so I’m worried about market dominance in the Internet search arena.

Recently, Ask.com exited the search market, cutting 130 engineering jobs, stopping work on new algorithmic technology.  The president of the company cited Google’s advantage in the market as the reason for their exit.  Google, as I understand it, controls more than 79 percent of the search market in the U.S. and over 90 percent in Europe.   I know that the FTC, Mr. Leibowitz, is investigating these issues and I think it’s an important investigation.  If you could, to the extent that you’re free to talk about this generally, at least, if you could address the issues of market dominance and the potential negative effect on Internet innovation?  And more broadly, what impact will that have on future innovation in the Internet economy?

MR. LEIBOWITZ:  Well, I guess I would say this:  As you know, we are conducting an investigation of Google.

We’re using both our consumer protection and our competition authority with respect to – and we’re – and we’re moving forward on that, mostly collecting documents and asking questions at this point.

As a general matter, putting Google aside, whenever you see a dominant company, you know, you wonder, particularly if they’re engaging in – if they’re engaging in types of exclusionary or bad conduct, whether they’re using that to stifle innovation and harm consumers in violation of the antitrust laws or in a way that’s an unfair method of competition.  So it’s a – it’s a – it’s a critically important issue in the Internet space where there’s been so much dynamism and so many benefits to consumers.  You want that to continue.  It’s an important question to ask across different industries as well.

REP. DEUTCH:  If I could follow up on the specific issue of exclusionary conduct in the Internet space – if you could just speak to that in a little more detail.

MR. LEIBOWITZ:  I think I’ve probably gone about as far as I should involving exclusionary conduct in the Internet space, given our pending investigation.  It’s a fair question.