Economic Considerations Raised by the Federal Trade Commission’s Investigation of Google’s Search Practices

Robert Levinson, Michael Salinger, Jan 30, 2015

In January 2013, the Federal Trade Commission closed its nineteen-month antitrust investigation into Google’s search practices. The primary issue in that investigation was Google’s use of Universal Search results. The argument that Google’s display of Universals violated the antitrust laws appeared to rest on a theory of vertical foreclosure. Under the vertical foreclosure theory, Google’s thematic results compete with third-party thematic search sites, and the “proper” role for Google’s general search engine was to act as an honest broker among the alternatives. The FTC’s investigation and its resolution raised interesting antitrust issues, some of which were novel, and some of which were fundamental to sound antitrust enforcement. Among these are several that we consider in this article: (1) What is the nature of the economic relationship between Google and third parties that receive (and perhaps rely on) traffic referred to them by Google’s general search engine?; (2) Is “general search” a relevant antitrust market, and is general search a distinct product or service, inherently separate from thematic search?; and (3) Should innovations by Google that expand the scope of what its general search engine can do—and place it in competition with other websites—be viewed as “monopoly leveraging” or, alternatively, as “innovation competition”?