Wednesday, June 6, 2012

KPCB "Internet Trends" Presentation Shows Netizens Happy with Search; EU Commission Still Threating Google with Antitrust Violations Over Its Search Methodology

Tl;dr Netizens appear to be satisfied with the quality and usefulness of search results, yet the EU Commission still insists that Google may need to change search results out of anticompetitive fears. This likely means businesses that are upset about their poor rankings, but this is a morally poor basis (though, perhaps, a legally valid one, time shall tell) for an antitrust action.

Over at Techdirt, Masnick has made several good points about the poor arguments put forth by EU Commission in their current antitrust investigations into Google.
There's been plenty of buzz about the EU Commission basically admitting that it's going to go after Google on antitrust grounds if Google doesn't change certain practices. However, as we've seen with past claims of antitrust issues with Google, when you begin to unpack the complaints, they don't seem to hold up to much scrutiny. There is no argument that Google is a big player, and could be abusive -- but there is little, if any, evidence of actual abuse. And, most of all, there seems to be no evidence that Google's actions harm consumers.
However, Kleiner Perkins partner Mary Meeker's 2012 "Internet Trends" presentation has pretty persuasive data against this position. Specifically, the screenshots below, which show that internet users overwhelmingly trust the results of search engines, find them unbiased, and, importantly, that they are becoming more relevant and useful over time:




So, in other words, it is simultaneously very hard to argue that there is harm to consumers as a result of Google's search returns, especially given that the above stats are for search engines overall. Therefore, either (a) there is enough competition in the field that non-Google search engines give users what they want without being dominated by Google (i.e., no consumer harm because of Google's actions), (b) Google itself is providing results netizens find trustworthy and increasingly useful (same) or (c) a combination of both (duh).

Unfortunately, as Wikipedia points out, Anti-trust does not have its basis in consumer protection:
Efficiency-oriented economists reject the goal of competition and instead argue that antitrust legislation should be changed to primarily benefit consumers. No Congress or administration has supported this position. These economists largely ignore the political issues that motivated the laws in the first place.
Fundamentally, I totally disagree with this point of view. Antitrust should be about consumer protection. I honestly cannot think of a circumstance where considerations purely of business competition, that do not in any way wind up impacting consumer protection, should be the basis for trust-busting. The only potential hypothetical that comes to mind is a big player ruthlessly squeezing tiny competitors out of a market by undercutting prices... but I don't see why:

1. This is necessarily a bad thing, as I honestly do not see the problem with a business undercutting its competitor and bearing losses a competitor cannot for a period of time as a way to establish market dominance;

2. If there is a concern here, it is because entrenched player will then pump up the price after the competition goes out of business. This is a problem for consumers, and the combination of those two things is definitely problematic in my point of view.

Anyway, in a post that will shortly follow, I'll examine this issue from the perspective of American Copyright law covering databases. Suffice it to say, I simply don't think that Google rankings count as facts, nor are they presented as facts, but are actually purely creative opinions. As a result, I do not see why Google's search activities should properly fall under any sort of unfair competition law: what Google is doing is publishing speech that consists of its opinions on the search worthiness of links. Fundamentally, then, I think free speech concerns simply trump the business concerns in question.

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