Of course a newspaper will be all in favour of the antitrust dunning of Google. They see the search company as a competitor and in that Arab sense of the enemy of my enemy is my friend they’re cheering on the attempted evisceration. It would help a bit if they understood the economics of the business they’re in though:
Convinced? You shouldn’t be. There are four reasons, at least, why the DoJ is right to fight this case. First, a product that is free (or free at the point of use) can still cause harm to consumers. The process is just indirect. An overly dominant search engine can, for example, raise its prices to advertisers, who then recoup the extra expense by charging more for hotels, flights, electronic gadgets, books, insurance, and so on.
Companies can charge more for their product because their costs go up, can they? A pay rise for journalists means that The Observer can put its cover price up? Its ad rates?
Or perhaps that’s not how it works then. Possibly prices are determined by that interaction of supply and demand curve. If the punter’s not willing to pay more for it then prices cannot be raised that is.
We might even consider the deeper meaning of what is being said there. A pay rise for Observer journalists means a rise in the price of the flights etc advertised in The Observer. We must, therefore, break up The Observer, no?
Then there’s complete stupidity rather than just lack of economic knowledge:
Second, Google’s cereal comparison doesn’t work. A key point about a dominant search engine is that it can gather more data to enhance the offer and thereby achieve greater competitive clout. It has a self-reinforcing aspect that doesn’t apply in the non-data world of cornflakes and Coco Pops.
Oh, cool. So, being dominant leads to an ever better search engine being created. This ever better search engine being created harms consumers in what manner? The insistence on reducing the dominance meaning, ineluctably, that the newspaper is insisting the consumer experience must decline – using their very own argument.
Third, most users don’t change their default settings. Yes, it’s technically simple to do, but most people don’t.
And revealed preferences. Most people don’t change away from Google. That means – by definition – that Google meets most peoples’ needs. The degradation of the consumer experience here is what?
Fourth, there is the deep problem of Google’s sheer size and effective control of 80% of the search market. How could new ideas and approaches ever get a look-in?
The Guardian gets 80% and more of public sector job advertising in the UK. We will break this market dominance when?
As ever, the Gell Mann hypothesis. Whenever we read something in the newspaper that we actually know about they get it wrong, don’t they?