Applause For Mike Lee And Herb Kohl’s Google Investigation

22 Dec, 2011 by John Hawkins

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Herb Kohl and Utah’s new Tea Party Senator Mike Lee are going after Google on antitrust grounds.

Here’s the release from Lee and Herb Kohl.

WASHINGTON — Today, U.S. Senators Herb Kohl and Mike Lee, Chairman and Ranking Member of the Judiciary Antitrust Subcommittee, sent a letter to Jon Liebowitz, Chairman of the Federal Trade Commission (FTC), expressing concerns over Google’s business practices and its impact on competition in Internet search and commerce . In September, Kohl and Lee convened a hearing of the Judiciary Antitrust Subcommittee to examine Google’s effects on competition and heard testimony from Google’s Executive Chairman Eric Schmidt and others.

“We believe these allegations regarding Google’s search engine practices raise important competition issues. We are committed to ensuring that consumers benefit from robust competition in online search and that the Internet remains the source of much free-market innovation. We therefore urge the FTC to investigate the issues raised at our Subcommittee hearing to determine whether Google’s actions violate antitrust law or substantially harm consumers or competition in this vital industry,” they stated in the letter.

This is music to my ears because on June 24th of this year, I wrote a post called It’s Time For The Government To Break-Up Google.

“I am certain you know that I am in favor of competition. So any type of monopoly, I would not be in favor of…” — Milton Friedman

When one company dominates the free market to such an extent that it creates a monopoly, consumers will benefit if that company is broken up by the government. That’s how you keep companies from becoming “too big to fail” and it also insures that there’s enough competition so that one company can’t dominate the market and become as unresponsive to consumers as the government often turns out to be.

That brings us to Google.

A handful of the biggest US states has started antitrust investigations into Google, adding to the mounting regulatory pressure on the search company as federal authorities move closer to a full-blown inquiry of their own.

Attorneys-general in California, New York and Ohio have all recently begun reviews of the potential threat to online competition from Google’s search dominance, according to people familiar with the investigations. The moves come in the wake of an investigation launched last year by the Texas attorney-general’s office, which became the first regulator in the US to weigh in.

Google accounts for “72.17 percent of all U.S. searches.” Their next biggest competitor gets 14.43% of searches and Google is actually growing faster than its competition.

In other words, is Google a monopoly? Yes. Would consumers be better off if Google were broken into multiple companies that have to compete with each other? You bet.

Google is a monopoly and hopefully Congress will ignore all the money and influence Google has, do its job, and break Google up into multiple companies.

The free market works because of competition and contrary to what some people think, there’s nothing anti-capitalistic or anti-market about breaking up a monopoly. To the contrary, the monopoly, whether it arises naturally or by government edict, is an enemy of the free market because it eliminates competition, artificially increases prices, reduces the quality of service, and generally takes away many of the benefits of the free market.

There are a number of companies, including Google, that should probably be broken up. Certainly any company that’s considered “too big to fail” should be considered “too big to continue to exist ‘as is’.” Moreover any company that is as large as Google should, at a minimum, have to face some tough questions about whether consumers are benefitting or being harmed by its complete dominance of its market niche. At the end of the day, that’s what the point of the governance is supposed to be: looking out for the best interests of the American people.

Mike Lee and Herb Kohl are doing that. Good for them.