The Justice Department is preparing an antitrust investigation of Google. Here is the definition of antitrust laws from Wikipedia:
Antitrust law is a collection of federal and state government laws that regulates the conduct and organization of business corporations, generally to promote fair competition for the benefit of consumers.
The antitrust argument goes something like this:
A company (or group of companies) have a dangerous possibility to monopolize a given industry. This monopoly has the ability to push out all competitors and set prices as high as they want. Antitrust laws are needed to protect the consumer.
It is an amazing fact that the antitrust laws are employed against innovative businesses and companies that have expanded output and lowered prices. Take the case of Standard Oil Company. The proponents of antitrust use the Standard Oil Company as their best example of an out of control monopoly. The story line is it cornered the market and raised the market price of kerosene by reducing supply. This story line goes against reality.
In 1870 Standard Oil Company had a 4% market share. By 1890, it had a 85% market share of the domestic petroleum refining market. Prices of kerosene fell from 30 cents a gallon in 1869 to 9 cents in 1880, to 7.4 cents in 1890, to 5.9 cents in 1897.
This brings us to Google. Google is so innovative that it supplies their services for free. Almost all of Googles money is made from advertising. This allows you to use the greatest search engine the world has ever known for zero dollars.
The not so supreme court had this to say about the Sherman Antitrust Act of 1890:
The purpose of the [Sherman] Act is not to protect businesses from the working of the market; it is to protect the public from the failure of the market.
Increasing productivity, reducing prices and raising the standard of living of the consumers is considered a failure of the market in the eyes of the supreme court. Antitrust laws should be repealed.