Old Is Not Always Wise: the Inapplicability of the Sherman Act in the Age of the Internet
Volume 89, Online
By Jenny Paquette [PDF]

Innovation is often bred of necessity. When Larry Page and Sergey Brin created Google, they didn’t look for a company to start—they looked for a problem to solve. Currently, antitrust in the United States faces a clear problem: inapplicability to new technology. The Sherman Act (“the Act”), enacted in 1890, is the primary antitrust statute in the United States. It was created to combat abuses by companies that could potentially harm the American people. At that time, America was dominated by agriculture, railroads, and industry. While the types of businesses that existed in 1890 still exist, today the nation is also home to a vast array of companies specializing in fast-moving technology. As businesses evolve, so do the ways in which they can harm the public. If there is any hope of protecting consumers, the law must keep pace with this evolution.

This paper explains the complications of applying the Sherman Act to the world of online search and offers an alternative approach. Section II provides the necessary background to understanding search engines and the ways in which they may be anticompetitive. It also explains the current state of antitrust law in the United States, and the ways in which it may apply to search engines. Section III discusses the shortcomings of the current state of the law and proposes an updated framework. The proposed framework mimics intellectual property law, dividing antitrust into industry-specific approaches with a common goal of consumer welfare. Section III then details how the Internet industry may look under such a framework and how an analysis of Google should be approached.