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Rejecting the Google School of No-Antitrust Fake Consumer Welfare Standard -- White Paper

This blog post publishes my white paper entitled: “Rejecting the Google School of No-Antitrust

Fake Consumer Welfare Standard; Why a consumer price of free, or a lower price, is not a Monopoly® Get-Out-of-Jail-Free card. I presented it at the University of Chicago, Stigler Center for the Study of the Economy and the State, 2018 Antitrust and Competition Conference on “Digital Platforms and Concentration, as part of the April 19 panel on “The Big Five and Political Power.” See the white paper here.

ABSTRACT: Evidently, Alphabet-Google has politically hijacked a significant part of the U.S. antitrust enforcement process from 2013-2018. A reasonable person looking at the publicly available evidence in this white paper and its supporting links, would conclude that Alphabet-Google has effectively politically hijacked a significant part of the U.S. antitrust enforcement process. That’s because: 1) from 2008-2012, the W. Bush and Obama antitrust enforcement authorities brought strong and consistent antitrust scrutiny and enforcement to Google; 2) the January 3, 2013, chaotic abrupt, bipartisan closure of the FTC Google antitrust investigation in just 44 days, just after the 2012 Presidential election, led by the Google outside antitrust counsel who helped shut down the Texas antitrust investigation of Google 18 months earlier, evidently was politically influenced; and 3) the dearth of any Federal antitrust scrutiny of Google since that controversial January 2013 FTC closure. A reasonable person looking at the publicly available evidence in this white paper and its supporting links, would also conclude that there is a de facto Google School of No-Antitrust at work trying to influence public opinion, the media, elected and government officials, and U.S. and State antitrust enforcers, to make the public believe Google (and other Internet platforms) have no antirust risk or liability, because they offer free innovative product and services, and to make conservatives believe that the Google School of No-Antitrust and the Chicago School’s consumer welfare standard and application are the same, when they are not. The Google School of No-Antitrust public stance that a consumer price of free or lower cost is always pro-consumer welfare, and cannot be anti-competitive or monopolistic, is not reasonable given the reasons and evidence in this white paper. Alphabet-Google’s antitrust arguments and narrative appear to be a blatant form of jury nullification in politicizing antitrust as regulation of innocent innovative winners and not law enforcement based on: the facts of the case (here & here); the economic rule of reason; the Chicago School consumer welfare standard; and antitrust precedent and law.

 

Contents

 

        I.           Introduction

 

      II.           Evidence Google School of No-Antitrust Has Politically Hijacked U.S. Antitrust Enforcement

 

A.     What is the political “Google School of No-Antitrust”?

 

B.      What are the apparent Ten Tenets of the Political Google School of No-Antitrust?

 

C.      The Google School of No-Antitrust explained in Google’s own words

 

D.     How did Google School of No-Antitrust politically hijack the Chicago consumer welfare standard?

 

    III.           Defense of the Economic Basis of Chicago Consumer Welfare Standard v. Google’s Political Basis

 

A.     The essence of rule of law is that the ends do not justify the means.

 

B.      Antitrust is not about voluntary free activities.

 

C.      For price to epitomize consumer welfare, it requires a free-market/invisible-hand at work.

 

D.     The notion that a price of free or a lower price can only be pro-competitive and not predatory or monopolistic defies established precedent.

 

E.      Supplier freedom of business model choice does not necessarily mean that every business model they choose gives consumers similar free market choice.

 

F.      Free frictionless offerings create most supplier welfare, not necessarily most consumer welfare.

 

G.     The best friend of the political Google School of No-Antitrust is economics “ceteris paribus” assumption – assume all things are equal – i.e. ignoring variables that disprove one’s desired conclusion.

 

    IV.           Conclusion

 

      V.           Appendices

 

Appendix 1: The Detailed Timeline of Google’s Political Hijacking of the Chicago Antitrust Standard

 

Appendix 2: Precursor LLC Research Series on Asymmetric Accountability Harms

 

 

*Disclosures & background of the Author: The research, views, and conclusions expressed here are the author’s. Scott Cleland served as Deputy U.S. Coordinator for International Communications & Information Policy in the George H. W. Bush Administration. He is President of Precursor LLC, an internetization consultancy specializing in how the Internet affects competition, markets, the economy, and policy, for Fortune 500 companies, some of which are Internet platform competitors. He is also Chairman of NetCompetition, a pro-competition e-forum supported by broadband interests. Cleland has testified seven times before the Senate and House Antitrust Subcommittees on antitrust matters. Overall, eight different congressional subcommittees have sought his expert testimony a total of sixteen times. When he served as an investment analyst, Institutional Investor twice ranked him the #1 independent analyst in communications. He is also author of “Search & Destroy: Why You Can’t Trust Google Inc.”

 

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