The Federal Trade Commission showed a wise level of restraint last week when it ended an antitrust investigation of Google without filing a lawsuit against the company. The commission’s 5-0 decision to let Google off doesn’t mean that the Internet search giant isn’t, as critics allege, tweaking search results in ways that direct more eyeballs to its ads and its own Web content. But it does mean that not all obnoxious behavior by dominant firms is illegal. It also means that in a fast-changing industry, government antitrust action isn’t the only way — or even the most likely way — for such behavior to be punished.
Google is flexing its muscles, and it may well be engaging in what the FTC calls “search bias.” Search “BOS-LAX,” and the most prominent links on the results page go to paid advertisers and Google’s own flight-search service. In recent months, there has been a rash of complaints that the company is nudging users toward its Google Plus social network by offering more prominent placement in search results to people and businesses who do.
Yet the trade commission seemed to recognize that forcing Google to change its search algorithms would have First Amendment consequences; if Google wants to publish search results that favor its own commercial interests, it can. Furthermore, Google’s behavior has caused no particular harm to consumers, who aren't forced to use the search engine.
Indeed, Google users are more likely than a slow-moving government investigation to punish Google for past and future offenses against the public interest. If consumers feel put off by the company’s efforts to promote its own properties, they can take their business elsewhere. Some of Google’s past collaborators are certainly doing so; it’s no coincidence that, as the rivalry between the two firms intensified, Apple took Google’s maps app off the iPhone and substituted one of Apple’s own.
There are indeed circumstances when tech companies use monopoly power in anticompetitive ways, but monopoly power is hard to protect as the pace of innovation accelerates. A decade and a half after the Justice Department sued Microsoft for using the ubiquity of its personal computer operating system to force the use of its Internet browser, Microsoft no longer strikes terror in the hearts of competing firms. That has less to do with the small concessions that the government extracted from Microsoft to settle the case than with technological advances and changes in consumer preference; today conventional PCs are less and less important as Americans come to rely more on smartphones and tablets.
Not all obnoxious behavior by dominant firms is illegal.
Not surprisingly, the trade commission's decision to let Google off was infuriating to Microsoft. Yet it’s clear that, as technology evolves, federal antitrust regulators will need a nimbler approach to assessing anticompetitive behavior. Recognizing its current limits, the FTC had good reason to hold back.