Antitrust Enforcement as a Cause of Google’s Innovation (2001-2013)

Abstract

In this paper I consider the role of antitrust enforcement as a driver of innovation at Google. My hypothesis is that President Obama increased antitrust enforcement relative to his predecessor, George W. Bush, leading Google to increase its rate of innovation. I review literature regarding the role of antitrust as a driver of high-tech innovation, and use regression analysis to determine to what extent, if at all, Google’s innovation can be linked to antitrust enforcement. A holistic appraisal of the data finds mixed support for my hypothesis, varying by measurement method. This demonstrates the importance of measures of enforcement and innovation, as well as measurement method selection, which play a role in the outcome of the tests.