Last night I joined Judge Napolitano's Freedom Watch to discuss the antitrust investigation against Google. Since it was a rapid-fire segment, I thought it might be worthwhile to delve a little deeper into the issue back here at the Inkwell.
For starters, being big – or, in this case being really, really successful – shouldn't be against the law; but that seems to be the default position for this administration. Frankly, it's a little difficult to figure out what the government's problem is with Google. Generally speaking, antitrust investigations look into businesses that have grown so large that they have the ability to monopolize the marketplace – to control prices and prevent competitors from entering.
But that's not the case with Google. For starters, the majority of its services are free. And the services they charge for – advertising, analytics, etc – are hardly over-the-top. Is it possible that Google just offers a better search engine service than, say, Bing or Yahoo?
As far as I can tell all these investigations do is encourage companies like Google to employ an army of DC lobbyists. I remember in early July when Politico ran a story about how Google was gearing up in advance of the antitrust investigation. "We have a strong story to tell about our business and we've sought out the best talent we can find to help tell it," a Google representative told the paper.
The problem, of course, is that once this investigation is over Google will hold onto those firms, who will stay on to defend Google in perpetuity. Not only does this further entrench the special interest culture that is a function of our big government, but also it drives resources away from the design and production of innovative new products and services.
In the end, antitrust investigations are almost always more harmful than helpful. While one of the other guests on the show scoffed at me for saying this, government "investigations" into companies like Google are threatening to entrepreneurs who are busy trying to develop new ideas and build businesses.
But I guess these are just some of the unintended consequences the Senate Judiciary Committee is probably not considering.