Don’t Believe the Google Antitrust Suit

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I have little doubt the search engine behemoth deserves to go down, but this probably ain’t what it seems

“Random Books Under Glass,” by E. Studs Mulligan

So, Google gets sued for antitrust violations.

I’m not going to cry for Google, but antitrust laws, with the possible exception for brazen price-fixing, are awful. They’ve been used repeatedly for political purposes or out of a vague sense of injustice.

The laws themselves are vague and allow for vague application. The “monopolies” they purport to break apart aren’t monopolies at all.

Just ask the two local supermarket chains in Los Angeles who were prosecuted for antitrust violations because their proposed merger would’ve given them 8% market share in the Los Angeles area. Or the two shoe companies whose blocked merger would’ve given them 7 percent of the shoes sales in the U.S. Thomas Sowell, Basic Economics (Basic Books, 2007), 154.

Hudge and Gudge: The Real Problem

If you want to break up a real monopoly, then kill Hudge and Gudge. That merger–Big Business and Big Government–is the real problem. Big Government shielding Big Business from competition, thereby giving the Big Business a genuine monopoly.

It takes different forms. Antitrust laws could be applied against competitors, thereby cushioning a big business from market forces. Statutes could be geared in a way to hurt a business’ competitors. Regulations can be extremely fair and even-handed, applicable to all businesses, but are so burdensome that small businesses can’t meet them, thereby cushioning big businesses who can afford a team of in-house lawyers to bring them in compliance.

Or big business is simply given money from the public. This can be in the form of tariffs (which increase the price the public pays for goods, so the big business gets the extra profits) or tax breaks or subsidies.

It’s the latter (breaks and subsidies) that Thaddeus Russell screams is the problem with Google. He alleges that Google gets tons of tax breaks and subsidies, thereby giving them a competitive advantage.

But I have my doubts. Russell’s screeds in this regard seem to focus on local property tax breaks. So do my Google (snicker) search results. Property tax breaks are a huge benefit for a business, but they’re not in the same vein as gifts available from the federal government. They’re an entirely different character (for reasons that go beyond this post).

It does, however, seem to me that Google has close ties to the federal government. Over the past decade or so, stories and phenomena repeatedly flared up that puzzled me about Google, things that didn’t make sense unless it was “in bed” with powerful players in DC.

This antitrust prosecution has bi-partisan support. Something tells me Google has fallen out of favor with the federal government, and it’s being manifested in an antitrust suit.

It’s a story we won’t know in full for many, many years.