Earlier today, the group FairSearch published a blog post outlining potential remedies that the Federal Trade Commission (FTC) should consider in its antitrust inquiry into Google’s practices. FairSearch is a group of companies that complain to regulators that Google’s superior performance is the product of “anticompetitive” behavior. FairSearch members include Microsoft, Expedia, Hotwire, Foundem, and TripAdvisor.
FairSearch’s post today lists behavioral and structural remedies, along with steps for ensuring implementation of these remedies. We’ve written extensively on remedies proposed by FairSearch, refuting over a dozen of them. Google is a client of my firm, but I do not speak for the company, only for myself.
Nonetheless, I want to address FairSearch’s latest offering, though many are recycled without the slightest improvement.
FairSearch’s proposals are, at points, hopelessly vague. I have to guess at the proposals, to some extent, in order to refute them. As a result, this post is more detailed than the one it refutes.
I’ll use FairSearch’s categories, and begin with the “behavioral” remedies.
FairSearch claims that Google engages in “discriminatory treatment” against sites that compete with Google’s own “vertical products,” like Travel (flights), Places (restaurant and retail reviews, etc.), or Shopping (product search). FairSearch’s solution is to force Google to use an “objective, non-discriminatory” algorithm and not preference its own products over others. FairSearch would also forbid Google from conduct that “misleads or deceives consumers” as to how search results are ranked and displayed.
First, every search algorithm is designed to discriminate among results – that’s the virtue of a search engine and enables you to provide what you’re looking for. Given this reality, as Professor James Grimmelmann has explained, an “objective, non-discriminatory” mechanism is a nonsensical proposal. To the extent that Google preferences its own products over those of its competitors, this is a common practice in the search industry, as research by George Mason University Law Professor Joshua Wright has shown. Wright’s study also concluded that Microsoft’s Bing was actually more biased than Google. (Wright is affiliated with the International Center for Law and Economics and Google has been one of its supporters.) As to prohibiting deceptive or misleading conduct, Google denies the charge and insists that FairSearch has presented no evidence of such conduct. I doubt many people are confused that Google is the one organizing Google Places results. In fact, along with Luke Pelican, I have argued that the FTC should look at this issue more broadly, and would discover that search engines complaining about Google engage in the conduct they accuse Google of committing.
FairSearch’s next target is Google’s alleged “scraping” and use of content from other sites without permission. FairSearch urges the FTC to forbid Google from “coercing” other sites into allowing Google to use their content on Google products. FairSearch suggests that Google is copying “proprietary content” but doesn’t allege copyright infringement. Rather, what FairSearch calls “scraping” is generally protected by copyright law’s doctrine of fair use, a protection central to how the Internet as we know it functions. Anyone, including Google, can generally quote snippets and link to sites without permission. FairSearch companies can tell Google not to crawl and index their sites, but they don’t have a right to tell Google how to display content and links to sites. What FairSearch means by “coercion” is extremely vague. FairSearch companies apparently want to have their cake and to eat it too – they want the benefit of having Google present their links while also determining how Google displays those links, whether in general results or categorized vertically. Moreover, Google previously changed its practices regarding much of the complained about behavior, making the utility of this proposal even more suspect.
FairSearch’s third remedy addresses the “[e]xclusivity restrictions in Google’s search advertising contracts.” Their proposal is to block Google from “coercing” others into agreeing to “exclusive terms” in contracts involving Google search, Android OS, or advertising products. I’m not entirely clear what the abuse claim here is, but if it refers to situations in which Google is the default search provider for a product, like the Mozilla web browser, for example, there is no merit to this claim. Google is the default for Mozilla, but is not the “exclusive” engine. Google’s efforts to be the default search engine are just like Microsoft’s, whose product Bing is the default search provider for the Amazon Kindle Fire tablets; the company also has also has exclusive deals with Verizon, Hewlett-Packard, and Dell, in addition to arrangements with Twitter and Facebook. If, instead the FairSearch claim relates to Microsoft’s allegation that Google forces Android manufacturers to make Google the default search for those devices, this claim is false and has been debunked.
FairSearch’s other advertising claim is that Google restricts the “portability of online advertising campaigns,” making it difficult for a Google advertising client to switch platforms. FairSearch wants to block Google from putting any restrictions on the portability of online advertising campaigns, force Google to use “open and documented APIs,” and would also prevent Google from preferencing DoubleClick products over other search providers. Google has vigorously denied the allegations that it restricts data portability for advertisers, a claim that has been corroborated by companies using Google’s products. With respect to third parties and API data, Google argues that the “co-mingling limits” it places on third party practices protect advertisers from losing out on features unique to AdWords, features that are often dispensed with as part of the interface design process. I haven’t seen much evidence from FairSearch that Google’s limitation on third-party tools is anticompetitive, especially in light of the freedom that advertisers themselves have.
FairSearch’s structural proposals are equally flawed and would be highly problematic for users who rely on search engines like Google.
The first would force Google to “license data that it has obtained in significant part through its improper actions,” and the second would force Google to split off their vertical search products that “benefitted from Google’s abuses.” The first proposal amounts to asking for Google to pay for content that it was permitted to use under copyright law and fair use for no charge in the first place.
Forcing Google to break off its Google Places, Google Shopping, and other products would be an administratively difficult task as these “products” are merely different ways of displaying results. Moreover, splitting the company is very strong medicine that would merely harm consumers who save time through Google’s categorization of search results. As CNet’s Stephen Shankland writes, divestiture would destroy “universal” search display and return Google to the time of ten blue links without displayed categories for news, places, and maps: “It would produce one Google that looked something like what the company was a decade ago…”
To ensure that all of these sanctions are enforced, FairSearch proposes that Google be required to certify its compliance with the imposed remedies on a yearly basis, bring in a “technical monitor with a right to audit and inspect” to ensure the company is actually complying with the rules, and to establish a public contact person for anyone who has a problem with Google or is claiming unfair treatment by the company. FairSearch also suggests Google face “significant penalties” for willful or grossly negligent violations of the remedies.
These proposals are half-hearted hand-waving attempts to suggest that the other remedies could indeed be enforced. As we have explained (see pg. 15-20), no technical monitor could determine if an algorithm is nondiscriminatory. A nondiscriminatory algorithm does not exit and algorithms rest on substantive, not merely “technical” decisions. Moreover, none of these means can help define the flawed proposals regarding fair use to snippets of content.
Indeed, these flawed remedies demonstrate that Google’s competitors are not interested in competing in the marketplace to win over customers. Instead they want to use the power of government to handicap the strongest of the pack, to the benefit of the weaker competitors. That’s a raw deal for consumers, and a heavy blow against innovation.