A House Commerce and Energy Subcommittee chairman has announced that hearings will be held in the spring to examine the “competition and consumer privacy issues raised by mergers of Internet firms.” In other words, by Microsoft’s offer to buy Yahoo.
More spectacle, and little to no value for the public—much like what happened a decade ago at the hands of a Senate committee, which grilled Microsoft about its business practices. That 1998 hearing was prodded not by policy concerns but by Microsoft’s rivals, who lobbied well enough to convince Senate leaders that this was an issue that would get attention.
This time Google has questioned the proposed combination of companies by contending that the two together would be “too powerful.” Ironically, Google is posing questions about the Microsoft/Yahoo combo that sound surprisingly similar to the questions being asked about Google in Europe as Google tries to acquire DoubleClick.
We’re hearing that competition is threatened—indeed, that the Internet itself is threatened, surprisingly because of advertisement driven business models. But, in fact, these new combinations of companies are just proof of the kinds of vibrant competition and experimentation that is going on in an exciting marketplace that is still relatively free of government interference. It should be permitted to continue.
Just as broadcast television has been brought to the masses for years for “free” because of advertising, so too are new media models experimenting with advertising, including Google’s plans to offer an advertising based mobile phone. Many other companies offer an array of content products in exchange for having the consumer view advertisements.
And yet Google seems to be throwing in with those who would try to discredit the legitimacy of innovative business models in the private economy -- those who force businesses to abandon advertisements because they just don’t like it, those that want what they want and expect to pay nothing for it.
While Google courts these powers now, just wait until the Google phone requires the viewing of ads or when Google begins installing counter measures to those who would circumvent those ads and drive down Google’s ad revenue. Google will be right back in the radicals hot seat, or the Congressional hearing room.
The right answer is that the marketplace should be free to operate as free as possible from government intrusion. Companies should be free to buy, to merge, and to spin-off in their response to consumers through the market – and even to offer competitors money to fend off a third rival. This is all competition, it should be clear by now that consumers benefit most from a dynamic and free marketplace, just as it should be obvious to companies by now that when they encourage the regulation of their competitors, they are simply feeding the beast that soon will be coming after them.