Laying the Foundation for an Antitrust Assault on Google

by | May 1, 2007 | Antitrust

Below is a quote from Washington Post business columnist Steven Pearlstein excerpted a column he wrote on Google titled “How Much More Should It Be Allowed to Grab?” [P]recisely because of its success, it’s fair to ask if Google should be barred from furthering its dominance through acquisitions or collaborations. At issue are the recent […]

Below is a quote from Washington Post business columnist Steven Pearlstein excerpted a column he wrote on Google titled “How Much More Should It Be Allowed to Grab?”

[P]recisely because of its success, it’s fair to ask if Google should be barred from furthering its dominance through acquisitions or collaborations. At issue are the recent purchases of YouTube, the leader in online video sharing, and DoubleClick, the leading broker of online advertising; in both instances Google used its gusher of profits to outbid rivals. There are also new joint ventures with Clear Channel, the giant radio broadcaster, and EchoStar, the satellite television operator.

Consider this: There may never have been a Google without the government’s antitrust suit that prevented Microsoft from crushing upstart rivals. By the same principle, isn’t it time to begin restraining Google to increase the odds another Google will come along?

I think it is safe to say that Steven Pearlstein will never be as productive or successful as any of the top leaders at Google. After all, if Pearlstein had real business acumen, he would not be a mere newspaper columnist hawking his opinions in a sea of opinion.

Nevertheless, Pearlstein feels himself competent enough ask if it is appropriate to regulate a massive company with thousands of employees and tens of thousands of investors–on the grounds that this company is now too successful and represents a coercive threat to others. Never mind that Google cannot outlaw or regulate its competitors; its mere success equals an act of violence that must be squelched.

Yet consider this: smashing the ability of the successful to reap the benefits of their good judgment and hard work creates a powerful disincentive for the successful to produce. Just what kind of innovation does Pearlstein think will come when the super-productive and super-innovative realize that all their best efforts guarantee them is an antitrust suit?

I suspect that Pearlstein doesn’t think that deeply about the issue. The simple idea that there is some imaginary innovator out there who is somehow denied the right to outflank Google is probably justification enough. And that’s what you get when you enshrine need as a value–and when great producers fail to justify their right to exist for their own sake.

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Nicholas Provenzo is founder and Chairman of the Center for the Advancement of Capitalism.

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