Monday, September 24, 2012
Posted by D. Daniel Sokol
Marina Lao (Seton Hall) explores Search, Essential Facilities, and the Antitrust Duty to Deal.
ABSTRACT: The core of the gathering antitrust case against Google seems to be that it favors its own or its affiliates’ content over that of its competitors in ancillary markets in the unpaid search results. Seeking the competitive advantages inherent in integration, which is what preferential treatment of one’s own property is about, is usually not unlawful. This paper examines whether “essential facilities” and the duty-to-deal nonetheless provide a basis for prohibiting this practice, as some have suggested, and concludes that they do not.
On the threshold monopoly power issue, most assume, based on Google’s high percentage of general search queries, that Google has monopoly power. This paper analyzes why this assumption, though intuitively appealing, is incorrect. It also considers other problems with invoking either principle in the display of search results. For essential facilities, for example, important issues regarding which is the alleged essential facility, whether there is denial of access, and whether the facility is capable of being shared have been largely overlooked. For the duty-to-deal, it is difficult to see how the principle, rarely applicable, can be made to apply.
This paper also questions a fundamental assumption embedded in the discourse -- that favoring one’s own property in search results, being good for a search engine, must be anticompetitive. Antitrust law is consumer-centric, and practices that benefit search users, while also benefiting the search engine, would not be anticompetitive even if they incidentally hurt some competing providers.
The paper ends with a discussion of some policy issues and concludes that they generally cut in favor of allowing search engines to incorporate new features and redesign their product, even if that might unfortunately adversely impact some competitors in ancillary markets.