Google Executive Chairman Eric Schmidt raises an interesting point about traditional antitrust regulation and Google's business, by extension raising issues about any number of other leading firms in the software industry that actually do not charge users anything to use the apps.Traditionally, the test has been harm to consumer welfare, through the mediation of markets where welfare is assumed to be a matter of choice, and choice is a matter of robust competition between firms.
But how does traditional antitrust thinking apply to a firm such as Google? It hasn't harmed any user by its existence, its products or its dominance of the search advertising business. Virtually all of Google's products in the consumer space, and many to most in the business space, are offered free of charge.
"So we get hauled in front of the Congress for developing a product that’s free, that serves a billion people," he says. "I don’t know how to say it any clearer: it’s not like we raised prices."
"So we get hauled in front of the Congress for developing a product that’s free, that serves a billion people," he says. "I don’t know how to say it any clearer: it’s not like we raised prices." "We could lower prices from free to…lower than free? You see what I’m saying?"
Monopolies, or perceived monopolies, have in the past been regulated because regulators want to prevent consumer harm in the form of higher prices. Typically that requires a fact finding that such harm actually has occurred, not that it could potentially happen in the future. That's a tough case to argue in Google's case.
Monopolies, or perceived monopolies, have in the past been regulated because regulators want to prevent consumer harm in the form of higher prices. Typically that requires a fact finding that such harm actually has occurred, not that it could potentially happen in the future. That's a tough case to argue in Google's case.
