Perhaps in recognition of this vulnerably, and following in the same footsteps as their net neutrality comrades, proponents of search neutrality seek to impose new regulations free of any consumer-welfare considerations. Neutering a search engine’s alleged bias is a mess, however, and a review of the proposed remedies reveals that any solution to this purported problem might be worse than living with mild favoritism by search engines. By limiting discrimination, search neutrality runs the risk of limiting the relevance of searches and of reducing the incentive of search engines to differentiate themselves.
The leading candidates for achieving search neutrality include (a) providing a right to include an asterisk alongside the search result to direct users to a complainant’s explanation of the result (I am not making this stuff up); (b) the creation of a “Federal Search Commission” to regulate search engines (wait, it gets worse); (c) requiring a search engine to maintain a certain percentage of results on a given page for randomly ranked results as opposed to the engine’s algorithm (defeating the purpose of search in the first place); and (d) requiring search engines to disclose all manual adjustments of organic results to a special master. While an economist might scoff at these proposals, some policymakers take them seriously.
When it comes to fashioning remedies to achieve search neutrality, as Manne and Wright explain, the issue is whether some sort of ex ante blanket prohibition is appropriate instead of an ex post, fact-intensive evaluation on a case-by-case basis. Sadly, the FCC ignored this precise argument in the net neutrality debate, preferring to implement what amounts to a “per se” standard. Proponents of search neutrality understand that a website’s prevailing in a particular case, in which discrimination on the basis of affiliation and competitive harm must be proven, would be likewise nearly impossible.
If only the regulators understood this dilemma, we could banish the word “neutrality” from the regulatory lexicon.
Hal J. Singer is managing director and principal of Navigant Economics. His areas of economic expertise are antitrust, finance and regulation.