Google Antitrust Investigation
Google is an American corporation specializing in internet search. Google was founded by Larry Page and Sergey Brin while they were doctoral students at Stanford University in the mid 1990's. The company has been estimated to run more than one million servers in data centers around the world and process over one billion search request each day. The company's perceived monopoly and market dominance let to media coverage accusing the internet giant of not only copyright issues, but censorship and privacy violations as well. However, despite these accusations, Google.com was reportedly the most visited website in 2013 (Savitz & Cooper, 2012).
Google's critics claim that it unfairly utilizes its search engine to advance its own services over their competitors. Companies with no ties or google affiliations claim that, “Google engages in anti-competitive behavior across many vertical categories of search that harms consumers by restricting the ability of other companies to compete or put the best products in front of Internet users, who should be allowed to pick winners and losers online, not Google” (Savitz & Cooper, 2012). Google has fired back to these allegations by claiming that search users are easily able to locate other service providers and that their website is built for users and not for websites.
Ironically, Microsoft was the company who originally launched the initial claims regarding Googles online practices. Many people remember a time when Microsoft had a monopoly on operating systems and many other areas of emerging technology. Microsoft claims that Google makes it difficult for mobile phones that use its Windows software to access Googles popular You Tube video site. They go on to claim that Google promotes its own phones and software which is the well-known Android system.
According to the Huffington Post, “Google currently receives 95 percent of all search advertising revenue, the largest component of online advertising, and the marketplace is unlikely to change that absent strong antitrust intervention”(Newman, 2013). It is important to note that having a monopoly is not illegal. What is illegal is seeking to achieve or maintain a monopoly through anticompetitive practices. Google claims that its market dominance is because of its superior product, not because of any anticompetitive methods. Consumers seem to be backing that statement up with their overwhelming preference in the Google search engine. Over 68% of consumers prefer Google to its market competitors such as Bing and Yahoo.
Google was investigated under The Sherman Antitrust Act of 1890. This act was the first measure passed by the U.S. Congress to prohibit trusts. The Sherman Act It prohibits certain business activities that federal government regulators deem to be anticompetitive, and requires the federal government to investigate and pursue trusts. In present times it has broadly been used to oppose the combination of entities that could potentially harm competition, such as monopolies or cartels (US National Archives).
In January 2014 the US Federal Trade Commission decided not to file an antitrust lawsuit against Google. The commissioners came to the agreement that they lack sufficient evidence to charge the internet giant with antitrust violations. In a recent article by Time Magazine journalist Sam Gustin sums up the case by saying, “Reasonable people can and do disagree about whether Google’s conduct has been anticompetitive, especially with respect to its effort to leverage its Web dominance to make inroads in search verticals such as travel, dining and shopping. And the debate over Google’s search market power will no doubt continue for years. But as a matter of federal law and policy, this issue is over, at least for now” (Gustin, 2014).
Monopolies often times are described as being a negative part of our economic society. People claim that they allow overcharging and excessive profits. In many cases, this is very true. However, monopolies also promote research in development by protecting firms from competition for some time which then allows them to enjoy some profits and therefore be able to invest in innovation. This is often the case of industries such as pharmaceuticals, telecommunications, subways, and computer technology. In the pharmaceutical industry, this is quite often the case. A drug company such as Pfizer is able to create a new drug, market the drug and have dominant control on the market until their patent runs out. During those few years Pfizer is able to research the product with even more detail and adjust to consumer and market concerns. Pfizer is also able to recoup the money spent to develop the drug which then allows them to continue to develop new pharmaceuticals.
New and innovative products will always have the potential to dominate our free trade market. It is the responsibility of our government to ensure that these products are being sold and marketed honestly and fairly.

Bibliography

Gustin, S. (2014, January 4). Google’s Federal Antitrust Deal Cheered by Some, Jeered by Others. Retrieved March 21, 2014, from http://business.time.com/2013/01/04/googles-federal-antitrust-deal-cheered-by-some-jeered-by-others/

Newman, N. (2013, September 24). Retrieved March 21, 2014, from Huffington Post: http://www.huffingtonpost.com/nathan-newman/taking-on-googles-monopol_b_3980799.html

Savitz, E., & Cooper, J. (2012, November 4). Forbes.com. Retrieved March 21, 2014, from Forbes: http://proxy.devry.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&AuthType=url,cookie,ip,uid&db=bth&AN=83175280&site=eds-live

Steinhauser, G., & Liedtke, M (2011, March 31). Retrieved March 21, 2014, from Huffington Post: http://www.huffingtonpost.com/2011/03/31/microsoft-google-antitrust-probe_n_842955.html