Google Says 'Free' Isn't An Antitrust Issue - InformationWeek
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7/13/2009
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Thomas Claburn
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Google Says 'Free' Isn't An Antitrust Issue

On Friday, Dana Wagner, senior competition counsel for Google, published a post on Google's Public Policy blog that asks the question, "Is free an antitrust issue?"

On Friday, Dana Wagner, senior competition counsel for Google, published a post on Google's Public Policy blog that asks the question, "Is free an antitrust issue?"Wagner's answer, as might be expected from the legal counsel of the world's leading provider of free online services and content, is that providing goods and services for free isn't anticompetitive. Rather, it's good for competition, he insists.

In support of his claim, Wagner cites a passage from an opinion piece by Wired editor-in-chief Chris Anderson that was published on CNN.com. The article compares Google's subsidization of its online apps business using revenue its advertising business to Microsoft's subsidization of its Bing search engine using revenue from its software business.

"No matter how successful or profitable the subsidizing product is, the fact remains that cross-subsidization itself has never been viewed as an antitrust problem," Wagner states. "If a company chooses to use its profits from one product to help provide another product to consumers at low cost, that's generally a good thing."

The problem with using Microsoft's actions as a yardstick for Google's is that Microsoft was found to be an unlawful monopoly a decade ago, and part of its effort to "cut off Netscape's air supply" involved giving away Internet Explorer for free.

That's not to say Wagner is wrong, even if the Department of Justice may be able to make an antitrust case against Google. But the notion the free is generally positive is a vast oversimplification of economic reality.

The law as written may support Google's position, but it's time to have a discussion about whether there's a need for business protection laws that mirror consumer protection laws.

We already have such laws that protect licensed professions like accountants, doctors, and lawyers from unlicensed competition. We have immigration laws to protect trade workers from workers abroad who'd gladly work for less.

Nor so for information workers, those affected the most by the Internet and Google's organization of all that is online: musicians, writers, photographers, filmmakers, and journalists, among others.

There's copyright law of course -- it's supposed to help provide an incentive to create -- but the entire intellectual property regime needs to be rethought. Prohibiting the copying of bits in world full of machines designed for copying bits and of people who love sharing just doesn't work. That's another issue, however.

The question that should be asked is whether, in some cases, free does more harm than good? And if it does, can the harm be addressed by regulation?

Free has a lot to recommend it, until it's your business that's being undersold.

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