FairSearch Principles for Evaluating Remedies to Google’s Antitrust Violations

November 19th, 2012 | Bookmark and Share | SUBSCRIBE

The members of FairSearch have often been asked, what remedies are our members seeking to resolve the harms that result from Google’s anti-competitive search and business practices.

Enforcing existing competition laws in the online context is vital to fostering greater innovation, lower-cost online services, and increased economic growth. As is becoming increasingly evident, this need is particularly applicable to the expansion of Google’s dominance across the Internet. For example, while its investigation is on-going, the European Commission already has identified four areas in which Google’s “business practices may be considered as abuses of dominance.”

Antitrust enforcement officials should insist on effective remedies that address the fundamental conflict of interest driving Google’s incentive and ability to engage in anti-competitive conduct.

Enforcers must pursue remedies that are effective and enforceable with respect to each of these concerns. The remedies need to prevent violations in the future as well as to undo the harm to competition already inflicted by Google. More generally, the enforcers need to consider restoring and preserving competition in search and search advertising (including Google’s unlawfully acquired scale advantages), which can help ensure continued innovation and opportunity across online markets while reducing the need for competition agencies to monitor and enforce behavioral restrictions.

Enforcers must also resolve the problem of “mixed incentives” that a search engine designed to direct users to the most relevant web content necessarily faces when it monetizes through advertising. Sergey Brin and Larry Page themselves observed in their Stanford University thesis in 1998 that “[t]he goals of the advertising business model do not always correspond to providing quality search to users” because “a search engine could add a small factor to search results from ‘friendly’ companies and subtract a factor from results from competitors. This type of bias is very difficult to detect but could still have a significant effect on the market.” The bias predicted by Brin and Page becomes an insidious problem for the market when a single search engine achieves monopoly power and users, advertisers, and publishers lack viable competitive alternatives, and remedies designed to restore competition in the marketplace can address Google’s inherent conflict of interest.

FairSearch sets forth below proposals for such effective and enforceable remedies to Google’s abuses. The following is not meant to be an a la carte menu – effective remedies must be put in place to address each of these abuses. Any package of remedies that does not end Google’s preferencing of its own products ahead of natural search results would be viewed as insufficient in restoring a truly competitive landscape to search and search advertising.

Behavioral Remedies:

Abuse #1: Discriminatory treatment favoring Google’s own vertical products in a manner that may harm competing vertical products.

Remedy: Require Google to use an objective, non-discriminatory mechanism to rank and display all search results, including without limitation any links to Google products. This would prohibit Google from giving preference to its own products in display of search results outside of algorithmic search.

Remedy: Prohibit Google from engaging in any conduct that misleads or deceives consumers with respect to the ranking or display of search results.

Abuse #2: Scraping and using content (such as user reviews) from other sites without authorization.

Remedy: Prohibit Google from using the dominance of its search engine to coerce other sites into letting Google use their proprietary content for Google’s own products.

Abuse #3: Exclusivity restrictions in Google’s search advertising contracts.

Remedy: Prohibit Google from coercing others into accepting exclusive terms in contracts or agreements related to Google’s dominant products, including its search engine, paid search advertising services, and its Android operating system.

Abuse #4: Restrictions on portability of online advertising campaigns.

Remedy: Prohibit Google from adopting or enforcing either legal or technical restrictions on the portability of online advertising campaigns.

Remedy: Require Google to use open and documented APIs.

Remedy: Prohibit Google from discriminating against independent providers of search tools and from favoring its own DoubleClick search products.

Structural Remedies:

While enforcement agencies should impose rigorous behavioral remedies to redress Google’s violations, structural remedies also warrant consideration for at least two reasons.

1. Undoing the harm to competition that Google already has inflicted (including its improperly acquired scale advantages) could require more than just behavioral restrictions on a going-forward basis.

2. To the extent that effective behavioral remedies are difficult to administer in some contexts, structural remedies may provide effective relief with fewer administrative burdens.

Potential structural remedies include:

1. Requiring Google to license data that it has obtained in significant part through its improper actions, and

2. Requiring Google to divest its vertical products that have benefited from Google’s abuses.

Monitoring and Enforcement Mechanisms

It’s vital that mechanisms are put in place for ongoing monitoring and enforcement of these remedies, including:

1. Require Google annually to certify its compliance with its remedy obligations.

2. Require Google to establish a public point of contact for complaints about unfair treatment and to respond to such complaints in writing in a reasonable period of time.

3.  Appoint a technical monitor with a right to audit and inspect.

4. Provide significant penalties for failure by Google to comply with its obligations, particularly if the violations are willful or due to gross negligence.