A technological war is being transformed into a legal battle in the case of Google in Europe and in the US.
Google must defend itself against charges that it has abused its
dominant market position to the detriment of users, who spend 3.4% of
their Internet time using search engines. According to Marie-Josée
Loiselle, associate researcher at the Montreal Economic Institute,
the case of Google and the upcoming nomination of a new Commissioner at
the Competition Bureau of Canada offer an opportunity to take stock of
what Google describes as "certain flaws in antitrust laws."
In an economic note titled Flawed Competition Laws: the Case of Google
published this week with the MEI, Ms. Loiselle explains that
competition is not reducible to a list of companies or their market
shares. It is rather the number of potential competitors that counts. In
the highly coveted high tech sector, there is "no shortage of
pretenders to the throne," as Google puts it.
“The application of competition laws to the high tech sector is
particularly delicate, especially because of the speed at which the
sector evolves. A company can have a quasi-monopoly one moment, and a
few short years later be displaced by a new technology. That’s what
happened to IBM with personal computers, and to Sony and its Walkman,
and more recently to the MySpace networking site. I don’t think we
should penalize a company because it revolutionizes the market and gets
consumers to flock to its new product,” says the report's author.
Google continues the argument:
Furthermore, cases of “regulatory capture” can occur when less efficient industry players try to fight a dominant company using the legal system instead of doing so by reducing their prices or offering better products. This has the consequence of distracting the company from its innovative activities since it must pay out large sums of money to defend itself before the courts. At the end of the day, the real losers from such a slowdown in innovation are consumers.
Google has been feeling the heat from several countries, most notably
the US, in recent years due to the incredible wealth of information and
power it holds being the world's most ubiquitous internet search
engine.
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