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Fair Search’s Google-ITA Video

A link to the video is available here.

The video has all of the standard ingredients of a competitor complaint:  (1) a slogan (“Stand with Bob”), (2) anti-corporate rhetoric (“Freedom not Google Profit!”), and (3) appeals to provocative statements from a CEO.   Meanwhile, Google rivals have also turned their attention to Congress.  I suppose the video format is new.

As I’ve written before, there is nothing out of the ordinary for rivals to compete with appeals to the government to bring an enforcement action against a rival.

Complaints from rivals are fairly predictable.  We expect less efficient rivals to turn to the government agencies when competition on the merits puts them at a disadvantage.  Of course, we can also expect complaints from rivals when the defendant is engaging in exclusionary conduct that may put the rival out of business.  The point is that ? without more ? pointing to Google?s market share and adding competitor complaints to the mix does not suggest or create any inference of competitive harm.  As Expedia?s lawyer knows quite well, the distinction between harm to rivals coupled with speculative theories about harm to competition on the one hand and hard evidence of the latter on the other is one that lies at the center of antitrust jurisprudence.

Here’s a Google’s spokesperson’s explanation of the motives for the merger:

When someone does a Google search for ?flights from Boston to Miami,? we?d like to provide not just 10 blue links but exact flight times and prices as well. ITA will help us do that, while sending more traffic to airline and online travel websites where consumers can buy tickets.  So far, the only critics of this deal are competitors, not consumers, and the laws aren?t intended to protect companies from competition.?

The last point is key.  Google has also addressed Fair Search’s contentions in a blog post of their own.

Videos and slogans warning of potential effects of the merger will have no sway with the DOJ, whose analytical focus will be on a rigorous consumer welfare analysis.  In this case, I suspect the analysis is relatively straightforward and the merger will be approved — perhaps with a press release highlighting the fact that Google has (already) promised to respect ITA’s existing contracts.

Filed under: antitrust, economics, google, merger guidelines, mergers & acquisitions, technology

Full post as published by Truth on the Market on November 17, 2010 (boomark / email).