Google: Is Free An Antitrust Issue?

Can the offering of goods and services such as Google searches free of charge be considered in violation of antitrust? Many librarians have expressed an interest in this issue. They are concerned about what any resolution of this question wll have on their continuing efforts to provide knowledge based goods and services (including new and enhanced products) in an increasingly financially constrained environment to patrons with ever increasing expectations. They want to be informed about what the producers and providers they depend on, such as Google, are thinking about this issue? Hence this postingl
In a July 10 posting on the Google Policy Blog Dana Wagner responds to comments by Chris Anderson, editor of Wired Magazine and author of the book Free in a piece Chris wrote for CNN and possibly to additional comments by Chris during his presentation at the Google D.C. office earlier in the week. In his D.C. presentation Chris explained how new business models and approaches to advertising will change the focus of global commerce.

What really seems to have caught Dana Wagner’s attention however is the following excerpt from Chris’s CNN piece:

“But companies still have to make money, so there are limits to how much they can provide free. Not a problem for Google. Its core advertising business is so powerful, dominant and profitable that it can subsidize almost everything else the company does, using Free to get customers in new markets. Is that fair, when so many of its competitors don’t have a similar golden goose at the core of their operations?”

Mr. Wagner’s basic answer to the question posed is that providing goods and services for free isn’t anticompetitive’ it is actually good for competition.

For additional information and commentary see Thomas Claburn’s July 13 posting, Google Says ‘Free’ Isn’t An Antitrust Issue on Grook on Google.