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September 2012 Policy Study, Number 12-10

   

The Federal Trade Commission’s Investigation of Google

   

Who is complaining about Google?

   

 

The Federal Trade Commission and several state Attorneys General may think something is wrong with Google’s products or practices. But are Google’s users dissatisfied?

 

And what would “dissatisfied” mean? Dissatisfied with Google? What is important is that searchers can switch, and know they can switch, to a different search engine if they are dissatisfied with Google, or with whichever search engine they are using. What counts, in other words, is the competitive process, not anyone’s satisfaction with any particular company.

 

A spring 2012 IBOPE Zogby International poll found that people are indeed happy with the competitive environment. Eighty-seven percent of the respondents agreed with the statement, “I feel I can easily switch to a competing search engine if I’m not happy with the results I receive.”[2] That means, in polling language, that 87 percent of Internet users approve of the competitive environment for search engines. (For those who enjoy contrasts, the approval rating of the U.S. Congress, according to a CBS News/New York Times poll, is 15 percent.)

 

If Internet users are satisfied with the competitive environment, why are the FTC and the Texas Attorney General investigating Google? They are investigating because Google’s competitors are unhappy. It is standard practice for companies to complain to the competition authorities (the Federal Trade Commission or the Antitrust Division of the Department of Justice, or a state attorney general) when they are being beaten at their game.[3] They seek to use the government to run interference — to get government to harass their competitors. All too often government agencies are happy to oblige.

 

And that’s exactly what’s happening here. The current investigation into Google’s practices has been loudly pushed by Google’s competitors, especially Microsoft which, along with other companies, funds an organization called “Fairsearch.org.” Microsoft has its own general search engine, Bing, which it calls a “decision engine.” Other companies complaining about Google include specialized search sites like Kayak and Expedia (travel sites), Yelp (a shopping and restaurant site), Foundem (which is basically an aggregator of third party content), and Nextag (a comparison shopping site), which even concedes that, because of Google, it is performing “less well” (i.e., is being beaten at its game by Google).[4]

 

   

 

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