By Gregory Ferenstein
While the Federal Trade Commission absolved Google of monopoly accusations Thursday for prioritizing its own products in search results, it's questionable whether the search giant can ever be considered a monopoly, if consumers continue to rely on Google (GOOG) to offer up solutions without the inconvenience of comparison shopping other services.
There's countless review websites to help me choose the best restaurants, a handful of map applications to give me the quickest driving directions, and a litany of coupon search engines to find me the cheapest price. In the interest of efficiency, more and more users may want a company like Google to recommend a restaurant, present driving directions in Google Maps, and offer a great coupon-all in one search.
In an era of information overload, choice (i.e. competition) can be a burden and consumers may very well prefer the efficiency of a single option.
Microsoft (MSFT) and a coalition of niche search engines accused Google of unfair search practices for prominently displaying some results at the top of some inquiries. For instance, when I search for my dream vacation back to Brazil, Google displays a list of flights it thinks I'm most interested in.
Google controls a whopping two-thirds of U.S. searches, enough to threaten the existence of niche search sites that thrived in the crevices of where the search giant did not previously attempt to dominate. "Google clearly skews search results to favor its own products and services while portraying the results as unbiased. That undermines competition and hurts consumers," said John M. Simpson, of advocacy group Consumer Watchdog, in an extended rant against the FTC's refusal to charge Google with anti-competitive practices.
While Google may have a foreboding market share, dominance must be paired with consumer harms to constitute a legal monopoly. "Mere possession of monopoly power is not an antitrust offense," explained legal scholars Joshua D. Wright and Geoffrey A. Manne in a deliciously informative piece about the challenges of labeling Google a monopoly. Courts recognize that sound monopoly law has an "understanding of the tradeoffs between innovation and dynamic efficiency gains and the static welfare losses associated with monopoly power."
I enjoy the fact that Google's search results save me the trouble of comparison shopping every imaginable niche competitor (i.e. it provides consumers with beneficial efficiency gains). Right now, my browser has 53 open tabs; every second matters to me. Indeed, Google's own research has found that users are extraordinarily sensitive to speed: consumer satisfaction takes a noticeable dip if web pages take longer than 500 milliseconds to load.
Consumers (including myself) will continue to offload more and more decisions to computers, from flights to restaurants to television shows, and we will want answers as quickly as possible so we can make even more decisions in our increasingly information-hungry lives.
The need for speed necessarily squeezes out competitors, because it's worth increasing the volume of information we can absorb in exchange for the time it takes to find higher quality information for each search. Monopoly law may make sense when something like a government-supported telecommunications industry excludes other Internet service providers from offering me cheaper, faster Internet.
But consumers are choosing Google; more importantly, they're also asking Google to make choices (quickly) for them. Unless readers believe that users are hurting themselves, Google's dominance isn't paired with a harm that could trip the second legal requirements for a "monopoly."
Indeed, it seems that the more decisions we ask Google to make, the more impossible it becomes for Google to be a monopoly at all - no matter how much of the market it dominates.