Colorado Representative Jared Polis sent a letter to FTC Chairman Jon Leibowitz, regarding reports of possible antitrust lawsuit to be filed by the Commission on Google Inc (NASDAQ:GOOG), related to the search engine giant’s business practices.
Rep. Polis warned that an antitrust lawsuit against Google would be a “woefully misguided step that would threaten the very integrity of our antitrust system.” According to him, it might lead to a Congressional action that would result in the reduction of the Commission’s capability in enforcing antitrust protections in significant industries that are twisted by monopolies and oligopolies.
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The lawmaker emphasized that Google’s advertising tool helps entrepreneurs reach their target customers, expand their business, tap new markets, and create hundreds of new jobs. Rep. Polis cited, in the state of Colorado alone, the search engine giant brought $1.4 billion worth of economic activities from businesses, website publishers, and non-profit organizations in 2011.
Rep. Polis further pointed out the competition in online search is highly competitive, citing the different websites used by consumers in searching for products and services including Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL)’s iTunes for music and movies, Facebook Inc (NASDAQ:FB) for social networking and recommendations, and Yelp (NYSE:YELP) for local businesses.
The Colorado representative said, “Competition is only a click away, and there are no barriers to competition…To even discuss applying antitrust in this kind of hyper competitive environment defies all logic and the very underpinnings of antitrust law itself.”
According to the lawmaker, consumers are not asking the FTC or the Congress to protect them because there are so many choices online. He reminded the Commission regarding the reaction of consumers when the Congress tried to pass the PIPA and SOPA legislation. Consumers clearly voiced out their opposition on over-regulation of online content.
He encouraged the FTC to “tread carefully when reviewing Google, Facebook, Twitter, or any other technology company”, as regulation might make things worse. He warned that today’s victory might become tomorrow’s failure without any government intervention. Furthermore, the lawmaker asked the Commission to prevent taking actions that would compromise the search engine giant’s capability in providing important services, to innovate rapidly, and introduce new products, or that might make the search engine results useless for business and consumers.
In June 2011, Google Inc (NASDAQ:GOOG) received a notice from the FTC regarding its investigation against the search business of the company. Google Fellow Amit Singhat wrote in the official blog of the company that the concerns of the FTC were unclear, but Google is clear where it stands. Amit said, “Since the beginning, we have been guided by the idea that, if we focus on the user, all else will follow.” Google said it will cooperate with the FTC investigation.
Last October 13, a report from Reuters cited that four FTC Commissioners were convinced that Google illegally used its dominance in the search engine market to hurt its competitors after a year of investigation. The report cited that the FTC Commissioners believed that filing an antitrust lawsuit against the search engine giant is appropriate. The FTC will decide by the end of the year if a lawsuit will be filed against the company.
Based on the US search market share data in May, Google dominates the search engine market, with 66.7 percent market share, while its rivals such as Microsoft’s (NASDAQ:MSFT) Bing has a 15.4 percent market share and Yahoo! Inc. (NASDAQ:YHOO) obtained a 13.4 percent market share. Ask and AOL Inc. (NYSE:AOL) search engines have 3 percent and 1.3 percent market shares respectively.