Search engines are on notice that the government is about to lower the boom on somebody.
The Department of Justice is wrapping up what it bills as a first-ever criminal case against the anticompetitive use of search algorithms in a “price-fixing scheme.”
DOJ antitrust chief Makan Delrahim teased that case at a Senate Subcommittee hearing on antitrust enforcement Wednesday (Oct. 3) during questioning from Sen. Richard Blumenthal (D-Conn.).
Blumenthal asked about search algorithms used by companies “like Google or Yelp!” that use algorithms that can have “profound market effects,” like disadvantaging less tech-savvy small businesses by “guiding users away from the best option at the cheapest price.”
Google has often been accused by some small businesses of disfavoring their content while favoring Google’s content, while Google counters it is just trying to prioritize the most relevant and useful content to its users.
He asked what resources Delrahim had to scrutinize algorithms and AI systems as a “potential misuse of market power.” The antitrust chief suggested they were already being employed in that pursuit.
He said that the anticompetitive use could take a couple of forms, either two potential competitors using the same algorithm “as a way of effectuating a price-fixing scheme.”
“We actually have a case that’s a criminal case that is going to be coming to conclusion in the next two weeks, I think, and then we will make public the use of that, and I believe it is the first of its kind.”
He said if there is market power that can harm innovation or new entry or other threat to market power via that algorithm, “it certainly could be a violation of the antitrust laws,” he said, but that it is something the U.S. and the EU are struggling with.
Blumenthal asked whether Delrahim was going to keep the subcommittee in suspense, and he responded that would have to, but added with chuckled: “I think it’s a fun case. The facts of that are kind of interesting.”