Intrusion: Google has confirmed that it's the target of a Federal Trade Commission probe. Once again, an American company has grown too big and too successful for the comfort of the busybodies in Washington.
While the Official Google Blog says "it's still unclear exactly what the FTC's concerns are," the Washington Post reports that the "government will take a broad look at whether one of the country's most powerful companies is harming consumers or stamping out competition."
What's really at work here is a group of federal functionaries who want to use the power of the state to force the world to behave as they wish.
Google is the biggest and most successful search engine on the Web. It owns from 63% to 82% of the market share, depending on whose data are the most accurate. Either way, Web users like the search results it provides.
Google is also a prosperous promotional forum. Roughly 80% of U.S. advertising revenue from the placement of ads on Web pages showing search results goes to Google. The company is worth $154 billion. Yahoo, the No. 2 search engine, has a market cap of $19.2 billion.
There's a reason Google is at the top in both categories: The public, which pays no fee to search on Google, likes the service and keeps coming back. If Google is harming consumers, there's no need for government intervention. Consumers will let the company know by taking their business elsewhere. No one is forced to use Google; searches are purely voluntary.
The same applies to Google's corporate customers who buy its keyword-based advertising. If they're not pleased with the results or the prices they're being charged, they will quit Google. They are not compelled to contract with the company.
There's no need for the regulators to be concerned about Google eliminating the competition, either. As long as government stays out of the market, the market will regulate itself. Google might be hammering the competition now, but in a truly free market, where government isn't holding back one company while promoting its rival, another player who does it better will emerge. And Google could do nothing to stop it.
History shows that dominant market share is always fleeting and a true monopoly is possible only when the government shields the monopolist from competition.
While government probes are good for the political careers of those who launch them, they are not good for business. Companies targeted by regulators have to expend time and resources protecting themselves from the busybodies, which means they have less of both to commit to expanding their businesses.
The unhappy result: Innovation is choked, job creation is sclerotic, and consumers lose when new products and improvements are slow to come through the pipeline.
One notable company that fell under the federal government's leaden antitrust thumb is Microsoft. Its stock fell from $54 a share just after antitrust action was announced and, at $25, has yet to recover. It's just not the enterprise it once was.
IBM is another that was needlessly hounded by the government amid antitrust charges and subsequently harmed due to the federal action. During the 13-year battle, it lost its No. 1 ranking among high-tech leaders, and the stock lost a quarter of its value after quadrupling in the seven years prior.
As a victim itself, Microsoft should know better than to be one of the companies that apparently sicced the government on Google. But that's the way the game is played in Washington, and when we say game, we mean game.
There's no relationship to reality when antitrust is involved. It is a sham played out for the entertainment of bureaucrats and the sport of grasping politicians, our version of a Soviet show trial.
On some level, Google deserves justice for its support of net neutrality policy. But that's a separate issue, and Google should be judged on it independently. Let consumers and customers handle it just as they should handle the Google business practices that the regulators have picked out for scrutiny.
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