by Berin Szoka & Geoffrey Manne
In advance of today’s Senate Judiciary hearing, “The Power of Google: Serving Consumers or Threatening Competition?,” we’ve assembled a list of fallacies you’re likely to hear, either explicitly or implicitly:
- Competitors, not Competition. Antitrust protects consumer welfare: competition, not competitors. Competitors complain because a practice hurts them, but antitrust asks only whether a practice actually hurts consumers. The two are rarely the same.
- Big Is Bad. Being big (“success”) isn’t illegal. Market share doesn’t necessarily create market power. And even where market power does exist, antitrust punishes only its abuse.
- Burden-Shifting. Google, like any defendant, is presumed innocent until proven guilty. So Google’s critics bear the burden of proving both that Google has market power and that it has abused that power to the detriment of consumers. Yet, ironically, it’s Google at the table defending itself rather than the antitrust agencies explaining their concerns.
- Ignoring Error Costs. The faster technology moves, the greater the risk of a “false positive” and the more likely “false negatives” are to be mooted by disruptive innovation that unseats incumbents. Thus, error costs counsel caution.
- Waving the Magic Wand. Google’s critics often blithely assume that Google is “smart enough to figure it out” when it comes to implementing, or coping with, a wide range of proposed remedies. But antitrust remedies, like all regulation, must be grounded in technological reality, and we must be realistic about real-world trade-offs.
- The Nirvana Fallacy. These two—ignoring error costs and ignoring the very real problems of fashioning effective remedies—create the Nirvana Fallacy: the belief that any problem must be fixed, without considering that the fix may be worse than the problem. We learned this the hard way with the aborted, 13-year travesty of an antitrust case against IBM.
- Overly-Narrow Market Definition. Shrinking the size of the market is the easiest way to exaggerate market power. Google competes not just with Bing but with many other consumer research tools. Some, like Yelp, share Google’s focus on keyword searches, but others, like Facebook, offer wholly new paradigms for finding information. Consumers generally want information, not URLs, and keyword search is one of many tools available to find useful information.
- Leveraging Dominance. This oft-repeated phrase comes from EU competition law, which lacks a rigorous focus on consumer welfare. It’s frequently used to attack big companies for expanding into new markets—here, customer reviews, mobile handsets, operating systems, etc. But there’s essentially no empirical evidence (pdf) that this has ever been bad for consumers—or that efforts to thwart it have been beneficial.
- Downplaying Business Model Innovation. New technologies are great, but most innovation involves a process of discovering better ways to offer existing technologies. Search results have evolved from a list of URLs (“ten blue links”) to a varied presentation of both information and links (from maps to reviews of local shops to flight information) not only because the technology evolved to enable it, but also because the business case was made to support it.
- Stasis Mentality. Many assumed IBM and Microsoft would rule tech forever, or that a combined AOL and Time Warner would be unstoppable. Google, for all its might, is already playing catch-up with Facebook. Even seemingly simple products change rapidly, and competitors emerge from the most unexpected places.
- Antitrust Isn’t Regulation. Like any form of government economic intervention, the limited knowledge of government regulators makes antitrust prone to “government failures,” which are often worse than the “market failures” they intend to correct. (see the Nirvana Fallacy, above). If antitrust is superior to other forms of regulation, it’s only because of the rigorous economic analysis of consumer welfare that has developed in recent decades to replace “Big is Bad” thinking. Without that, antitrust can be much, much worse than regulation. This thinking is especially common on the philosophical Right as a way to reconcile otherwise-healthy regulatory skepticism with antitrust activism.
(We just couldn’t resist throwing in a bonus fallacy to round out the list. Call it a baker’s 10.)
We’ll try to tweet (hashtag #GAntitrust; follow us at @Tech_Freedom) anytime someone falls into one of these fallacies at the hearing. You can get your own Google Antitrust Fallacy Bingo card here. The first two to tweet with a picture of a completed card (quotes or times scrawled in the margin of each square would be nice!) win a copy of The Next Digital Decade: Essays on the Future of the Internet, a unique and philosophically diverse collection of essays published earlier this year.
For Bingo purposes (to fill out the cards), also be on the look out for participants using these ill-defined or otherwise problematic (yet cavalierly tossed-around) terms:
- “Search Neutrality”
- “Scraping”
- “Black Box”
- “Search Fairness”
- “Disclosure”
- “Transparency”
- “Conflicts of Interest”
- “Level Playing Field”
- “Corporate Responsibility”
- “Deceptive Practice”
- “Federal Search Commission”
- “Privacy Violation”
- “Market Power”
We do not recommend turning this into a drinking game.
Berin Szoka is Founder and President and Geoffrey Manne is Senior Adjunct Fellow at TechFreedom, a non-profit, non-partisan technology policy think tank launched in 2011.
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.