In the late nineties, even before Google’s executives publicly pledged not to be evil, they were positioning their company’s search engine as a meritocratic alternative to the main options at the time. Other search tools based their results on factors like how often a searched-for term appeared on a Web page, but Google went beyond this, ranking pages based on their importance. The company’s engineers prided themselves on developing algorithms that, when presented with a search term, provided a person with the most useful results; advertisements were also more clearly marked on its results pages than on other search sites. “Google users trust our systems to help them with important decisions: medical, financial and many others,” Google’s co-founders wrote in a letter to investors when the company went public, in 2004. “Our search results are the best we know how to produce. They are unbiased and objective, and we do not accept payment for them or for inclusion or more frequent updating.”
Since then, our dependence on Google has deepened. We use it for more than two-thirds of online searches in the U.S., and the company’s name has become synonymous with search. All the while, people have continued to expect Google’s search engine to operate on strictly meritocratic principles, with the best results rising to the top. Some years ago, though, Google’s competitors began complaining about the company’s practice of displaying results from its own specialized services—for example, showing a stock chart from Google Finance in response to a search for a ticker symbol, rather than one from another financial-information site—above results from its main search engine. The company was also accused of other misbehavior, including scraping material, such as product ratings, from rivals, including Yelp, TripAdvisor, and Amazon, and using it to improve its own search results. Then, when the companies complained, Google reportedly threatened to take them out of its search results entirely.
In 2011, the Federal Trade Commission began an antitrust investigation of Google for these and other practices. Google’s legal response evoked its original mission, maintaining that its only goal was to present consumers with the best results, and if this sometimes meant showing results from Google’s own services above those of competitors, so be it.
A newly revealed document appears to help shed light on the extent to which the assertion that Google’s behavior didn’t constitute an antitrust violation because it didn’t hurt consumers was on the minds of the F.T.C. commissioners when, in 2013, they dropped their investigation. Through a Freedom of Information Act request, the Wall Street Journal viewed parts of a staff memo, issued in 2012 by the commission’s bureau of competition, which focusses on the legal context of alleged violations in order to determine their impact on competition and consumers. The memo concluded that Google had, in some cases, used anti-competitive tactics. When it came to the most high-profile aspect of the investigation, whether Google illegally favored its own sites over competitors’ offerings, the memo found that, although Google’s behavior had hurt rivals, it didn’t justify a lawsuit. On three other points, however, including the scraping issue, the staff report found that Google’s behavior had been illegal. According to the Journal, the competition bureau found that Google’s “conduct has resulted—and will result—in real harm to consumers and to innovation in the online search and advertising markets.”
Several people familiar with the F.T.C.’s thinking told me that the commission’s members reviewed the bureau of competition’s report in conjunction with one from the bureau of economics, which studies the business and economic context for alleged violations and tends to be less aggressive than the bureau of competition in interpreting corporate behavior as violating antitrust law. The economics bureau recommended against suing, finding that Google’s behavior hadn’t hurt competition or consumers enough to justify a lawsuit. After considering the reports, the commissioners ultimately agreed with that conclusion.
According to the people familiar with the investigation, Google got off the hook largely because, however the company might have harmed competitors, the F.T.C. found that its behavior, by and large, hadn’t hurt competition or, by extension, consumers. (The distinction between harm to competitors and harm to competition is an important one: according to the modern interpretation of antitrust law, even if a business hurts individual competitors, it isn’t seen as breaking antitrust law unless it has also hurt the competitive process—that is, that it has taken actions that, for instance, raised prices or reduced choices, over all, for consumers.) The commission’s public comments about the case reflected this. Beth Wilkinson, an outside counsel to the F.T.C., said in a press release in 2013, when the commission announced that it wouldn’t file suit, “Undoubtedly, Google took aggressive actions to gain advantage over rival search providers. However, the FTC’s mission is to protect competition, and not individual competitors. The evidence did not demonstrate that Google’s actions in this area stifled competition in violation of U.S. law.” As part of a deal with the F.T.C., Google agreed to stop some practices that had troubled commissioners.
The F.T.C.’s focus on consumers follows a huge shift in American culture in the twentieth century—one that deeply influenced public policy on matters of corporate power. In the early nineteen-hundreds, Louis Brandeis, who would later be appointed to the Supreme Court, helped push for federal laws to reduce the power of big corporations. His concern wasn’t that the companies’ behavior was bad for consumers but that the most powerful corporations were hurting their suppliers—including the small manufacturers that, at the time, made up a huge and crucial part of the U.S. economy and workforce. But, over the course of the century, as manufacturing declined and consumer culture rose, the supplier came to be replaced by the consumer as the figure most in need of protection under antitrust law. By the nineteen-eighties, courts, including the Supreme Court, regularly interpreted antitrust law to mean that corporations were misusing their power mainly if their behavior was seen as hurting consumers, rather than other companies; the F.T.C., in deciding whether to bring lawsuits against companies, also began to view potential cases through that lens.
If the F.T.C.’s investigation had ended public discussion of Google’s potential antitrust violations, the newly released document might have ended up as an interesting footnote in antitrust history. But the European Commission is also investigating Google’s behavior in Europe, and the document—or, in any case, what Google and its rivals learn from it—could play a more prominent role there. European interpretations of antitrust law are somewhat different from those in the U.S.; Europeans are concerned with consumers, but also, to a greater degree than in the U.S., with competitors. Still, European policymakers have made comments that suggest that they’re looking closely at consumer impact in their investigation of Google.
Google’s rivals seem to have learned from their interactions with the consumer-oriented F.T.C. This time, in making their case to the E.U., they appear to be far more focussed on arguing that Google’s behavior harmed not only them but consumers, too. On a Web site called Focus on the User, which is available in four European languages, Yelp, TripAdvisor, and others, including consumer groups, are making this argument directly; Yelp and TripAdvisor even developed a tool showing that, presented with certain kinds of search results that favor Google sites alongside those that don’t, users find the latter more useful. Such lobbying, coupled with the knowledge that the F.T.C.’s own staff members found Google’s practices to be anti-competitive, could well influence European policymakers in their investigation of the company.