From
all the hullabaloo about Google's recent changes in its search engine,
two specific allegations that have stood out in the American media are:
(1) that the changes potentially infringe on the privacy of people and
(2) that the changes warrant anti-trust investigation.
As a disinterested net savvy observer of the recent changes and the subsequent media coverage I have to state the following:
1.
The breach of privacy allegations appear to be unfounded and blown out
of proportion either because of misinformation or because of lack of
understanding of Google’s search system. The truth is that the
personalised portion of the search shows only that much that you could
already see and not any more than what you already had access to.
Further, the personalised search results are unique & restricted to
respective users (based on what they have shared and what others have
shared to them) akin to viewing ones personal email or social network
streams. All the fuss about the new search changes are either guided by
misinformed paranoia or simply mischievous propaganda to malign Google.
2.
Sections of the media have raised antitrust concerns for not including
Facebook's and Twitter's data in Google's search results, but it should
be realised that the terms of these companies obviously restrict Google
from displaying/using their data on its search results page. Using any
other (out of the way) means to bypass their terms of agreement to
include Facebook’s and Twitter’s data in the search results page would
make Google vulnerable to legal challenges from these firms. After all,
these firms are extracting fees via agreements with Microsoft for giving
access to users data on their network to be used in Bing's search
results. Remember Google use to list profiles & data from these
sites earlier, but it discontinued the practice after the terms of
Facebook and Twitter became restrictive. Clearly, going by the adverse
publicity in the media, Google is damned if it does and damned if it
doesn't.
To
understand and to investigate the propriety of the claims in the media I
had an overview of the American anti-trust laws. After having seen the
provisions of sections 1&2 of Sherman Act, section 7 of Clayton Act,
section 5 of the Federal Trade Commission Act and FTC's policy Statement
on the standards for determining 'unfairness' in business practices or
methods I believe that the allegations against Google are flimsy, or
even baseless and vexatious in nature, designed to harm the normal
business functioning of Google by causing unnecessary distractions and
delays in decision making.
Further,
if Google is a candidate for such investigation in the eyes of the
media, I believe its rivals are a bigger (more deserving) candidates for
the same treatment for their business practices are more likely to
violate antitrust laws than Google’s. Facebook, for exampe, has close to
1 billion locked-in users who cannot easily take out their data and
move to competitors. All of Google's services on the other hand provide
unprecedented control for the user to opt in, opt out, and move to other
competitors with their data. Also, facebook by virtue of its large
number of users is effectively a monopoly in the social networking
market and may be violating section 1 of the Sherman Act and section 5
of the FTC Act by imposing such terms that prohibit automated indexing
or retrieval of its users data thus effectively blocking users from
removing their own data by reasonable automated means. To make matters
worse, Facebook has entered into an exclusive agreement with Microsoft
to provide general users’ data through automated means for use in its
Bing search engine. Twitter too is guilty of such exclusive arrangement.
All of these companies (Microsoft, Facebook, Twitter) involved in this
exclusive arrangement may be candidates for antitrust investigations
under section 1 of Sherman Act and potentially under section 5 of the
FTC Act. Similarly, Apple too is a candidate for antiturst investigation
under the same provisions for its restrictive business practices with
regard to its iOS platform. Therefore, the media should be equally vocal
with regard to business practices of Google’s competitors also.
To
conclude, as a general observer of the practices of companies engaged
in Internet based businesses that involve users data, I have found that
Google's practices are most transparent with the best standards in
providing user control over their data. Further, with regard to Google's
search changes, let us not underestimate the users' wisdom and pre-empt
their chance to make a choice. They would not use the features if the
results do not match their expectation. Of course, lets not forget that
Bing (whose results by and large mirror that of Google) is just a mouse
click away.
Important Legal Notes:
1.
It is important to understand that the antitrust laws are concerned
with the functioning of the marketplace – i.e. competition and not the
protection of any individual competitor.
2. According to the rules of reasonableness under American law, there is no per se
rule against monopolization, or attempted monopolization. There is no
“no fault” monopolization, no situation in which there is some “magic”
number beyond which a firm may not increase its size or market share;
the determining factors will include the means by which those numbers
were reached – the reasonableness of the actions which produced the
final entity.
Sherman Act:
SECTION
1 (15 U.S.C. § 1). Prohibits contracts or conspiracies in restrain of
trade, which phrase has been, since at least 1911, judicially
interpreted as meaning unreasonable restraints of trade.
SECTION
2 (15 U.S.C. § 2). Prohibits monopolization or attempted
monopolization; it is sometimes used in conjunction with section 7 of
the Clayton Act (15 U.S.C. §18), which prohibits mergers or acquisitions
which may tend to lessen competition.
Clayton Act:
SECTION
7 (15 U.S.C. § 7). Is probably the most prominent, substantive
provision of the Clayton Act. Whereas the Sherman Act was enacted to
prohibit concerted activity which actually restrains trade, this
provision is directed at preventing activity in its incipiency which may
tend to restrain trade. The Merger Guidelines issued by the Department
of Justice offer an indication of the ways in which mergers and
acquisitions will be analyzed by the Antitrust Division and the FTC;
although they are not binding upon the courts, they are considered to be
persuasive.
Federal Trade Commission Act:
SECTION
5 (15 U.S.C. §45) is the operative, substantive provision of the FTC
Act. It prohibits “unfair methods of competition” and “unfair or
deceptive acts” in commerce (15 U.S.C. §45(a)(1)). The provision applies
to “unfair methods of competition involving commerce with foreign
nations (other than import commerce),” however, only to the extent that
such “unfair” conduct has a “direct, substantial, and reasonably
foreseeable effect” on the foreign commerce in question (15 U.S.C.
§45(a)(3)).
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