Is Antitrust Enforcement as Regulation Harming American Companies?By: Abby Johnson - March 23, 2012
Antitrust is quickly becoming a buzzword in the technology space as companies such as Google, Apple, and others are being investigated. The Federal Trade Commission is currently looking at Google in regards to claims that it is using its search power to favor its own products in search results.
Additionally, Apple is being investigated by the Department of Justice over e-book pricing. This week, the FTC also subpoenaed Apple in hopes of gaining further information in its antitrust investigation of Google.
Although these investigations are still pending, one can’t help but wonder what might come of them.
Is antitrust enforcement effective? Let us know in the comments.
An event held earlier this week hosted by the Federalist Society looked at these issues and found that many antitrust specialists are against regulation. The Honorable James Miller III, a senior advisor with the Husch Blackwell law firm, was among the panelists and spoke to WebProNews about the discussion.
As the former Budget Director under President Reagan and the former chair of the FTC, Miller told us that antitrust concerns often arise when one company wants to get an upper hand on another company.
“A lot of the big companies are trying to use the government to suppress competition,” he said. “It’s a very cheap way of getting a jump on your competition – having the government do this job for you.”
When done with these motives, he believes antitrust enforcement is wrong. The problem he has is that it gives the government the ability to dictate how companies should operate. In addition, he said the companies lose focus on their products as a result of the investigations, which ultimately harms consumers.
“Search is not a government-run utility, established by law and thus subject to bureaucratic oversight. It is a service provided to consumers and businesses by companies, which have set up their operations using their own principles, proprietary technologies and algorithms. Each company is free to develop its own approach, fulfilling the needs of its customers as it perceives them.”
What’s more, the costs involved in this scrutiny are staggering to both the companies involved and the economy. At the slightest news of an investigation, most companies see their stock drop. Interestingly, Miller told us that, while he was over the FTC, the agency tried to keep its work confidential to avoid such a reaction.
With industries such as technology specifically, Miller said that antitrust enforcement is especially difficult since the tech space changes at a rapid pace. In other words, a company that may appear to have monopoly power could, in theory, disappear in 6 months. As a result, he thinks the government should be hesitant about regulating it.
In response to the scrutiny that Google is getting over its search power, Miller said that consumers still have options. If a user doesn’t like the experience on the search engine, according to Miller, the act of clicking to another search engine is “easy as pie.” He went on to say that it would be difficult to make these choices any better or easier for consumers.
Although Miller did not take a position in the DoJ’s antitrust case against Microsoft, he told us today’s issues were very different.
“You have here an industry that is extraordinary, and America is leading the world,” he said. “To have our federal government come in and sort of mix things up, you need to be very careful that you don’t slow things down and hurt consumers in the process.”
Miller believes the government should approach tech companies with the future in mind. He said they should think about the long-term costs that these cases result in for the companies and taxpayers.
Interestingly, a new report from the Heritage Foundation on regulation as whole found that new federal regulations from the Obama administration are costing $46 billion dollars annually and that more expensive regulations are coming.
“It is correct that the regulation activity has grown leaps and bounds over the past several years and is imposing enormous costs on the American economy and reducing the rate of innovation and creativity from American companies,” said Miller.
Based on new research from the National Taxpayers Union, most consumers are against government intervention in search. As WebProNews reported last week, the study revealed that when users were asked if “the federal government should regulate the content and appearance of search engines and their results,” 64 percent strongly disagreed while only 3 percent strongly agreed.
Since it’s unclear how the DoJ and FTC will handle the current antitrust cases, it appears that this debate is a long way from being over.
Does antitrust enforcement produce harmful results? And, is the American economy suffering for this reason? Please share you thoughts.