LAW & ECONOMICS: EUROPEAN COMPETITION LAW - ANTITRUST - ONLINE PLATFORMS - DOMINANCE - CONSUMER WELFARE

Constructing a conventional antitrust case against Google

Because services offered by some of the so-called “FAANG” big-tech firms—Facebook, Apple, Amazon, Netflix and Google—are free, many believe we need a basis other than the “consumer welfare” standard in antitrust. At least with respect to Google, this conflict is false. Having a “zero price” for search may rationalize rather than impede an antitrust case. Suppose that Google has to set a price at zero for search, the service it most clearly dominates—and not just chooses to as a two-sided platform provider—because of the cost it would incur from having to collect money from users and exclude those who do not pay. If so, a case against Google could be similar to the case prosecuted against AT&T in the 1980s. This rationale would not apply to other FAANG firms, because they either do charge positive prices or likely could.

I. Introduction and summary 1. The so-called “FAANG” big-tech firms—Facebook, Apple, Amazon, Netflix and Google—have received considerable scrutiny from competition law enforcers on both sides of the Atlantic. I focus here on one company, Google, and not just because it has been the subject of very large fines in EU competition law proceedings and increasingly subject to antitrust investigations in the U.S. [1] Google is notable because it appears to manifest a conflict between the goals of competition law and the heretofore standard approaches. As the enforcement record shows, many believe Google has abused dominance to monopolize or acquire market power in related sectors. On the other hand, many of Google’s services, most notably search, are free. That search is free implies that

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  • University of Maryland (Baltimore)

Quotation

Timothy Brennan, Constructing a conventional antitrust case against Google, May 2020, Concurrences N° 2-2020, Art. N° 93864, pp. 44-49

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