BUSINESS LAW EVENT MEMO
UWSP Business341 Section 1
To: Professor Steven Schinker
From: Christopher Schroeder
Date: February 20, 2013
Event Title: “Oversight of Google.” Senate Judiciary Committee – Antitrust, Competition Policy & Consumer Rights Subcommittee hearing. Witness: Eric Schmidt (Google CEO).
Event Format: Webcast
Event Length: 2 hours 53 minutes
Related Text: Antitrust Law, pp. 938-939

The event is a webcast of the testimony of Eric Schmidt, CEO of Google, in a hearing before the Senate Judiciary Committee investigating company’s potential antitrust violations. Google has been accused of using its considerable search engine market share (about 65%) to give preferential ranking in search results and advertising to the company’s other products and services, over that of their competitors. Senators posed questions to Mr. Schmidt regarding Google’s methods of using their search engine to list their products higher than those of competitors. Mr. Schmidt denied using different algorithms in their search results in order to favor their own products. The issue relates to several issues covered in the text, mainly to the discussion of monopoly power. Section 2 of the Sherman Act prohibits the misuse of monopoly power to restrict trade in the marketplace when a firm possesses an extreme amount of market power (Clarkson et al. 939). Google indisputably does have extreme market power in the search engine market with 65%. Since Google obtained its market power fairly by creating a superior product, the issue is not whether Google monopolized illegally in the search engine market, but whether they are using their monopoly power in the search engine marketplace to unfairly attempt to monopolize in other markets, which is a violate of Section 2 of the Act (Clarkson et al. 945.) It is debatable as to how the relevant market in an online marketplace is defined (Clarkson et al. 944). Is the entire internet the relevant market, thus absolving Google from giving differential treatment to their own products, or is the Google search engine in itself the relevant market due to their significant market power? In the latter case, Google would be required to fairly and equally advertise the products of their competitors as well as their own. The Sherman Act was enacted by Congress in 1890. Section 2 of the Act (15 U.S.C. § 1–7 ch. 647, 26 Stat. 209) prevents companies that have an extreme amount of market power from misusing it to restrain trade in the marketplace. I chose this event because of it is interesting to see how the law can be applied to an online marketplace, or if it is even possible to prove antitrust violations in such cases due to its complexity. It is relevant to the text material relating to antitrust violations and how monopoly power and relevant markets can be defined, since there is no definition of it in the law. This event gave me significant perspective as to the workings of investigating antitrust violations. I would recommend this event to other students as it gives insight into the mechanisms of how antitrust violations are enforced by Congress, through congressional committee oversight and sworn testimony. Christopher Schroeder

Works Cited

“Oversight of Google.” C-Span Video Library. C-Span, 11 Sept. 2011. Web. 19 Feb. 2013. <http://www.c-spanvideo.org/program/OversightofG>

Clarkson, Kenneth W., Roger LeRoy Miller, Gaylord A. Jentz, Frank B. Cross. Business Law: Text and
Cases. 11th ed. Mason: South-Western, Cengage Learning, 2009. Print. Sherman Act, July 2, 1890, ch. 647, 26 Stat. 209, 15 U.S.C. § 1–7