Courts

House Courts Subcommittee Eyes Online Competition Issues

9/15/2010 1:27 PM Eastern

The House Judiciary Subcommittee on Courts and Competition Policy is holding a hearing Thursday on "Competition in the Evolving Digital Marketplace," including how much government oversight there should be of emerging businesses.

According to a draft of a memo from Subcommittee Chair Henry Johnson Jr. (D-Ga.), the plan is to touch on a host of issues affecting the online and mobile markets.

"While these markets currently appear fluid and competitive, sustained anticompetitive behavior by companies with market power could choke off competition," the memo to members said, "in turn slowing innovation and raising prices and reducing options for consumers."

The memo identifies one key threshold question as "how active antitrust law enforcement should be."

It also cited that former Federal Trade Commission chairman Timothy Muris as having argued for looser antitrust enforcement in nascent markets where competitors, products and market shares are in constant flux. The document also pointed to the other side of the argument, which is that "antitrust laws are developed from principles not tied to the particulars of any single industry, and whose application is as appropriate in developing markets as it is in more established markets."

Critics of letting nascent markets alone point to the Microsoft antitrust case as an example of waiting too long to act: Microsoft lost, but Netscape had gone under by the time it did.

Among the issues for possible discussion in light of antitrust oversight of online include advertising, with Google's name coming up frequently.

The memo cited Google's abandoned effort to take over Yahoo!'s online ad search advertising business and its successful acquisitions of online ad server DoubleClick and Admob, or what the missive called a former, frequent "head-to-head competitor" (The AdMob deal was approved without conditions by the Federal Trade Commission, which noted Apple's purchase of another mobile ad firm as providing sufficient remaining competition).

Other issues on tap:  the future of newspapers in the face of online competition; online airfare ticketing; competition in iPhone app development; exclusive cell phone handset agreements; the willingness of content producers to make their movies available for online video rental services; and digital publishing standards.

Invited witness include: Richard Feinstein, director of the FTC's Bureau of Competition; Ed Black, president of the Computer & Communications Industry Association; Morgan Reed, executive director of the Association for Competitive Technology; Scott Cleland, president, Precursor LLP; Geoffrey Manne, executive director of the International Center for Law & Economics and the Lewis & Clark Law School; and Dr. Mark Cooper, director of research for the Consumer Federation of America.

September