When a market fails it is unable to provide the socially efficient quantities of goods. There are many reasons a market can fail including: anti-competitive market power, negative externalities, public goods, and rent seeking.
Monopolies and Antitrust
A firm with market power has the ability to set its price above marginal cost. A monopoly is a good example of a market in which a firm produces less than a socially efficient level of output. The welfare that would have accrued to society if the industry were perfectly competitive but is not realized because of the market power the monopolist enjoys is the deadweight loss.
Recently Google has come under fire by the Department of Justice and the FTC for claims that the search giant unfairly drives traffic to Google's own services. The case was brought to the FTC by Fairsearch.org, a group who represents Google's critics and competition. Fairsearch's claim is that Google is using deceptive and anti-competitive practices in order to manipulate search results to favor Google's products. Sites like Expedia, Kayak.com, and TripAdvisor claim Google promotes links to its own local business pages which deprives other sites of potential traffic.
Google argues that users can easily navigate to other sites on the web and says it "built Google for users, not websites, and our goal is to give users answers." On September 21, 2011 Google CEO, Eric Schmidt testified in front of the Senate Judiciary Committee. Schmidt made the point: "We use data sources that are our own because we can't engineer it any other way" and added "I disagree with the characterization that somehow we are discriminating against [competitors]." Google's PageRank system uses an advanced algorithm to rank websites based on the search engine's judgment of the likelihood that each result matches what the user was seeking. Schmidt admits that this algorithm is not perfect and is constantly being refined and tested.
Eric Schmidt's testimony goes on to mention that Google faces competition from, not only other general search engines (such as Yahoo!, and Bing) but also specialized search sites for restaurants (like Yelp), shopping sites (like Amazon and eBay), travel sites (like Expedia and Travelocity), and also mobile applications. Schmidt also discusses how many users are now turning to social media sites like Facebook and Twitter for information and answers to search queries.
Externalities
Negative externalities are costs borne by parties who are not involved in the production or consumption of a good. The most common example of a negative externality is pollution. Society has been increasingly looking at sustainability and reducing their carbon footprint. When a company is producing a disproportionate (or assumed disproportionate) amount of pollution, the public and mainstream media shines a light on the entire industry. This is true when we look at the industry of hydraulic fracturing. Hydraulic fracturing, or “fracking,” is the process of creating a fracture in an underground rock layer in order to release natural gas, coal seam gas, and petroleum for extraction.
Drillers drill down 5 to 8 thousand feet to the rock level and then drill horizontally through the rock bed. Water, sand, and chemical additives are pumped at high pressure down the well. This high pressure mix is forced through perforated sections of the well causing the rock to fracture and releasing the gas. The pressure is then reduced and the water is pumped out of the well leaving behind the sand which props open the cracks allowing gas and oil to flow and get collected through the well.
Shale gas makes up roughly 25% of America’s natural gas supplies. Prior to the recent technology breakthroughs and popularity of fracking, shale gas only made up 1% of the gas supply and natural gas reserves were in decline. Prices on shale gas have also fallen due to increased production in fracking. Another benefit of fracking is the increase in jobs due to the increase in production. Some estimates state West Virginia has created around 72,000 jobs between Q4 2009 and Q1 2011 due to increased fracking.
Gasland, a documentary on the harmful effects of hydraulic fracking was released in 2010. This documentary shone a harsh light on the process of fracking and its effects on the environment. One scene in the movie shows a man who is able to light his tap water on fire due to fracking being done nearby.
The fracking process uses millions of gallons of water which are infused with chemicals that are known to be carcinogenic and caustic. Anywhere from 30 to 70 percent of this fluid is left in the ground. The waste water that comes out of the well is known as “produced water” and is pumped into a pit to evaporate. This water is also sprayed into the sunlight to help expedite evaporation. This evaporated wastewater will eventually fall back to earth as acid rain. In 2005, President Bush passed an energy bill which exempts oil and gas companies from the Safe Drinking Water Act. This bill also exempts drilling companies from being required to identify the chemicals they use in their drilling fluid.
Public Goods
Public goods are another way markets can fail. According to Baye, a public good is a good that is non-rival and non-exclusionary in consumption. A good is non-rival in consumption if other people are not precluded from consuming a good if one person consumes it. A good or service is non-exclusionary if, after being provided, no one can be excluded from consuming it. Some examples of public goods include clean air, national defense, and radio waves. Everyone gets to consume clean air and it cannot be allocated to just one person. (Baye, 522) New technology has created new public goods, such as a lighthouses and street lights. (Wikipedia) The socially efficient of producing a public good is where the marginal cost of producing the public good exactly equals the total demand for the good.
Rent-seeking
Rent seeking is selfishly motivated efforts aimed at influencing another party’s decision. Government policies generally benefit some parties at the expense of others. Lobbyists are a form of rent seekers as they are hired by a firm or firms in order to influence legislature in their clients’ favor.
Economic rent should be understood as the unwarranted excess paid to any factor of production that could not be sustained in an ordinary competitive market. In a labor union, the economic rent is the wages paid to union workers (plus administration costs) above the cost of replacing them with equally productive and qualified non-union workers. (Thieblot, 27) In recent legislation, labor unions have acted as rent-seekers with a higher intensity than with previous legislation. Unions are hoping to secure for themselves and their members rewards greater than the value society awards them in a free market. Unions have used their influence to impose restrictions on imports and buy-American requirements as well as insist upon excessive union costs with prevailing wage laws and union-only project labor agreements. These restrictions have leveled the playing field by raising everyone else’s costs to the level of the union. (Thieblot, 39)
This level of rent-seeking comes at a price. One out of every five dollars spent by the Service Employees International Union in 2008 went to support select political candidates. This amount was over and above the contributions made by members and local unions and doesn’t include the salaries and staff costs of lobbyists.
Quiz Questions:
1) A firm with market power best resembles ___.
a) Monopoly
b) Perfect Competition
c) Oligopoly
d) None of the above.
2) When drilling for shale gas, how deep do drillers dig down before they begin drilling horizontally?
a) 500 to 1000 feet
b) 1000 to 2000 feet
c) 3000 to 4000 feet
d) 5000 to 8000 feet
3) Shale gas makes up how much of America's natural gas supplies?
a) 10%
b) 90%
c) 25%
d) 50%
4) Which of the following is not a public good.
a) Clean air
b) Lighthouses
c) Street lights
d) Cable television
5) One out of every __ dollar(s) spent by the Service Employees International Union in 2008 went to support political candidates.
Rent seeking is selfishly motivated efforts aimed at influencing another party’s decision. Government policies generally benefit some parties at the expense of others. Lobbyists are a form of rent seekers as they are hired by a firm or firms in order to influence legislature in their clients’ favor.
Economic rent should be understood as the unwarranted excess paid to any factor of production that could not be sustained in an ordinary competitive market. In a labor union, the economic rent is the wages paid to union workers (plus administration costs) above the cost of replacing them with equally productive and qualified non-union workers. (Thieblot, 27) In recent legislation, labor unions have acted as rent-seekers with a higher intensity than with previous legislation. Unions are hoping to secure for themselves and their members rewards greater than the value society awards them in a free market. Unions have used their influence to impose restrictions on imports and buy-American requirements as well as insist upon excessive union costs with prevailing wage laws and union-only project labor agreements. These restrictions have leveled the playing field by raising everyone else’s costs to the level of the union. (Thieblot, 39)
This level of rent-seeking comes at a price. One out of every five dollars spent by the Service Employees International Union in 2008 went to support select political candidates. This amount was over and above the contributions made by members and local unions and doesn’t include the salaries and staff costs of lobbyists.
Sources:
Thieblot, Armand. "Unions, The Rule Of Law, And Political Rent Seeking." CATO Journal 30.1 (2010): 23-44. Academic Search Premier. Web. 6 Dec. 2011.
Market Failure: Antitrust, positive and negative externalities, public goods, rent seeking, tariffs Government failure
Public Goods
According to Baye, a public good is a good that is non-rival and non-exclusionary in consumption. A good is non-rival in consumption if other people are not precluded from consuming a good if one person consumes it. A good or service is non-exclusionary if, after being provided, no one can be excluded from consuming it. Some examples of public goods include clean air, national defense, and radio waves. Everyone gets to consume clean air and it cannot be allocated to just one person. (Baye, 522) New technology has created new public goods, such as a lighthouses and street lights. (Wikipedia) The socially efficient of producing a public good is where the marginal cost of producing the public good exactly equals the total demand for the good.
Negative Externalities of Hydraulic Fracturing For Natural Gas (Oct. 10, 2011)
Hydraulic fracturing, or “fracking,” is the process of creating a fracture in an underground rock layer in order to release natural gas, coal seam gas, and petroleum for extraction.
The Process
Drillers drill down 5 to 8 thousand feet to the rock level and then drill horizontally through the rock bed. Water, sand, and chemical additives are pumped at high pressure down the well. This high pressure mix is forced through perforated sections of the well causing the rock to fracture and releasing the gas. The pressure is then reduced and the water is pumped out of the well leaving behind the sand which props open the cracks allowing gas and oil to flow and get collected through the well.
The Benefit
Shale gas makes up roughly 25% of America’s natural gas supplies. Prior to the recent technology breakthroughs and popularity of fracking, shale gas only made up 1% of the gas supply and natural gas reserves were in decline. Prices on shale gas have also fallen due to increased production in fracking. Another benefit of fracking is the increase in jobs due to the increase in production. Some estimates state West Virginia has created around 72,000 jobs between Q4 2009 and Q1 2011 due to increased fracking.
The Negative Externalities and Criticism
Gasland, a documentary on the harmful effects of hydraulic fracking was released in 2010. This documentary shone a harsh light on the process of fracking and its effects on the environment. One scene in the movie shows a man who is able to light his tap water on fire due to fracking being done nearby.
The fracking process uses millions of gallons of water which are infused with chemicals that are known to be carcinogenic and caustic. Anywhere from 30 to 70 percent of this fluid is left in the ground. The waste water that comes out of the well is known as “produced water” and is pumped into a pit to evaporate. This water is also sprayed into the sunlight to help expedite evaporation. This evaporated wastewater will eventually fall back to earth as acid rain. In 2005, President Bush passed an energy bill which exempts oil and gas companies from the Safe Drinking Water Act. This bill also exempts drilling companies from being required to identify the chemicals they use in their drilling fluid.
Recently Google has come under fire by the Department of Justice and the FTC for claims that the search giant unfairly drives traffic to Google's own services. The case was brought to the FTC by Fairsearch.org, a group who represents Google's critics and competition. Fairsearch's claim is that Google is using deceptive and anti-competitive practices in order to manipulate search results to favor Google's products. Sites like Expedia, Kayak.com, and TripAdvisor claim Google promotes links to its own local business pages which deprives other sites of potential traffic.
Google argues that users can easily navigate to other sites on the web and says it "built Google for users, not websites, and our goal is to give users answers."
On September 21, 2011 Google CEO, Eric Schmidt testified in front of the Senate Judiciary Committee. Schmidt made the point: "We use data sources that are our own because we can't engineer it any other way" and added "I disagree with the characterization that somehow we are discriminating against [competitors]." Google's PageRank system uses an advanced algorithm to rank websites based on the search engine's judgement of the likelihood that each result matches what the user was seeking. Schmidt admits that this algorithm is not perfect and is constantly being refined and tested.
Eric Schmidt's testimony goes on to mention that Google faces competition from, not only other general search engines (such as Yahoo!, and Bing) but also specialized search sites for restaurants (like Yelp), shopping sites (like Amazon and eBay), travel sites (like Expedia and Travelocity), and also mobile applications. Schmidt also discusses how many users are now turning to social media sites like Facebook and Twitter for information and answers to search queries.
This case is still pending and I will update this post with any new information as it arrives.
Mark Wilk
Final Paper
When a market fails it is unable to provide the socially efficient quantities of goods. There are many reasons a market can fail including: anti-competitive market power, negative externalities, public goods, and rent seeking.Monopolies and Antitrust
A firm with market power has the ability to set its price above marginal cost. A monopoly is a good example of a market in which a firm produces less than a socially efficient level of output. The welfare that would have accrued to society if the industry were perfectly competitive but is not realized because of the market power the monopolist enjoys is the deadweight loss.
Recently Google has come under fire by the Department of Justice and the FTC for claims that the search giant unfairly drives traffic to Google's own services. The case was brought to the FTC by Fairsearch.org, a group who represents Google's critics and competition. Fairsearch's claim is that Google is using deceptive and anti-competitive practices in order to manipulate search results to favor Google's products. Sites like Expedia, Kayak.com, and TripAdvisor claim Google promotes links to its own local business pages which deprives other sites of potential traffic.
Google argues that users can easily navigate to other sites on the web and says it "built Google for users, not websites, and our goal is to give users answers." On September 21, 2011 Google CEO, Eric Schmidt testified in front of the Senate Judiciary Committee. Schmidt made the point: "We use data sources that are our own because we can't engineer it any other way" and added "I disagree with the characterization that somehow we are discriminating against [competitors]." Google's PageRank system uses an advanced algorithm to rank websites based on the search engine's judgment of the likelihood that each result matches what the user was seeking. Schmidt admits that this algorithm is not perfect and is constantly being refined and tested.
Eric Schmidt's testimony goes on to mention that Google faces competition from, not only other general search engines (such as Yahoo!, and Bing) but also specialized search sites for restaurants (like Yelp), shopping sites (like Amazon and eBay), travel sites (like Expedia and Travelocity), and also mobile applications. Schmidt also discusses how many users are now turning to social media sites like Facebook and Twitter for information and answers to search queries.
Externalities
Negative externalities are costs borne by parties who are not involved in the production or consumption of a good. The most common example of a negative externality is pollution. Society has been increasingly looking at sustainability and reducing their carbon footprint. When a company is producing a disproportionate (or assumed disproportionate) amount of pollution, the public and mainstream media shines a light on the entire industry. This is true when we look at the industry of hydraulic fracturing. Hydraulic fracturing, or “fracking,” is the process of creating a fracture in an underground rock layer in order to release natural gas, coal seam gas, and petroleum for extraction.
Drillers drill down 5 to 8 thousand feet to the rock level and then drill horizontally through the rock bed. Water, sand, and chemical additives are pumped at high pressure down the well. This high pressure mix is forced through perforated sections of the well causing the rock to fracture and releasing the gas. The pressure is then reduced and the water is pumped out of the well leaving behind the sand which props open the cracks allowing gas and oil to flow and get collected through the well.
Shale gas makes up roughly 25% of America’s natural gas supplies. Prior to the recent technology breakthroughs and popularity of fracking, shale gas only made up 1% of the gas supply and natural gas reserves were in decline. Prices on shale gas have also fallen due to increased production in fracking. Another benefit of fracking is the increase in jobs due to the increase in production. Some estimates state West Virginia has created around 72,000 jobs between Q4 2009 and Q1 2011 due to increased fracking.
Gasland, a documentary on the harmful effects of hydraulic fracking was released in 2010. This documentary shone a harsh light on the process of fracking and its effects on the environment. One scene in the movie shows a man who is able to light his tap water on fire due to fracking being done nearby.
The fracking process uses millions of gallons of water which are infused with chemicals that are known to be carcinogenic and caustic. Anywhere from 30 to 70 percent of this fluid is left in the ground. The waste water that comes out of the well is known as “produced water” and is pumped into a pit to evaporate. This water is also sprayed into the sunlight to help expedite evaporation. This evaporated wastewater will eventually fall back to earth as acid rain. In 2005, President Bush passed an energy bill which exempts oil and gas companies from the Safe Drinking Water Act. This bill also exempts drilling companies from being required to identify the chemicals they use in their drilling fluid.
Public Goods
Public goods are another way markets can fail. According to Baye, a public good is a good that is non-rival and non-exclusionary in consumption. A good is non-rival in consumption if other people are not precluded from consuming a good if one person consumes it. A good or service is non-exclusionary if, after being provided, no one can be excluded from consuming it. Some examples of public goods include clean air, national defense, and radio waves. Everyone gets to consume clean air and it cannot be allocated to just one person. (Baye, 522) New technology has created new public goods, such as a lighthouses and street lights. (Wikipedia) The socially efficient of producing a public good is where the marginal cost of producing the public good exactly equals the total demand for the good.
Rent-seeking
Rent seeking is selfishly motivated efforts aimed at influencing another party’s decision. Government policies generally benefit some parties at the expense of others. Lobbyists are a form of rent seekers as they are hired by a firm or firms in order to influence legislature in their clients’ favor.
Economic rent should be understood as the unwarranted excess paid to any factor of production that could not be sustained in an ordinary competitive market. In a labor union, the economic rent is the wages paid to union workers (plus administration costs) above the cost of replacing them with equally productive and qualified non-union workers. (Thieblot, 27) In recent legislation, labor unions have acted as rent-seekers with a higher intensity than with previous legislation. Unions are hoping to secure for themselves and their members rewards greater than the value society awards them in a free market. Unions have used their influence to impose restrictions on imports and buy-American requirements as well as insist upon excessive union costs with prevailing wage laws and union-only project labor agreements. These restrictions have leveled the playing field by raising everyone else’s costs to the level of the union. (Thieblot, 39)
This level of rent-seeking comes at a price. One out of every five dollars spent by the Service Employees International Union in 2008 went to support select political candidates. This amount was over and above the contributions made by members and local unions and doesn’t include the salaries and staff costs of lobbyists.
Quiz Questions:
1) A firm with market power best resembles ___.
- a) Monopoly
- b) Perfect Competition
- c) Oligopoly
- d) None of the above.
2) When drilling for shale gas, how deep do drillers dig down before they begin drilling horizontally?- a) 500 to 1000 feet
- b) 1000 to 2000 feet
- c) 3000 to 4000 feet
- d) 5000 to 8000 feet
3) Shale gas makes up how much of America's natural gas supplies?- a) 10%
- b) 90%
- c) 25%
- d) 50%
4) Which of the following is not a public good.- a) Clean air
- b) Lighthouses
- c) Street lights
- d) Cable television
5) One out of every __ dollar(s) spent by the Service Employees International Union in 2008 went to support political candidates.Correct Answers:
Sources:
Eric Schmidt Written Testimony
Judiciary Committee hearing, September 21, 2011
WSJ Online, Feds to Launch Probe of Google
PCMag, Schmidt Defends Google's Search Practices, Urges Careful FTC Review
Fair Search
http://en.wikipedia.org/wiki/Hydraulic_fracturing
http://www.hydraulicfracturing.com/Process/Pages/information.aspx
http://www.bbc.co.uk/news/uk-14432401
http://online.wsj.com/article/SB10001424052702303936704576398462932810874.html
http://www.businessweek.com/magazine/content/11_11/b4219025777026.htm
http://www.gaslandthemovie.com/whats-fracking
http://www.girlygreengirl.com/2010/06/gasland.html
http://en.wikipedia.org/wiki/Public_good
Baye, Michael, Managerial Economics and Business Strategy 7e
Thieblot, Armand. "Unions, The Rule Of Law, And Political Rent Seeking." CATO Journal 30.1 (2010): 23-44. Academic Search Premier. Web. 6 Dec. 2011.
End of Final Paper
Rent Seeking: Unions
Rent seeking is selfishly motivated efforts aimed at influencing another party’s decision. Government policies generally benefit some parties at the expense of others. Lobbyists are a form of rent seekers as they are hired by a firm or firms in order to influence legislature in their clients’ favor.
Economic rent should be understood as the unwarranted excess paid to any factor of production that could not be sustained in an ordinary competitive market. In a labor union, the economic rent is the wages paid to union workers (plus administration costs) above the cost of replacing them with equally productive and qualified non-union workers. (Thieblot, 27) In recent legislation, labor unions have acted as rent-seekers with a higher intensity than with previous legislation. Unions are hoping to secure for themselves and their members rewards greater than the value society awards them in a free market. Unions have used their influence to impose restrictions on imports and buy-American requirements as well as insist upon excessive union costs with prevailing wage laws and union-only project labor agreements. These restrictions have leveled the playing field by raising everyone else’s costs to the level of the union. (Thieblot, 39)
This level of rent-seeking comes at a price. One out of every five dollars spent by the Service Employees International Union in 2008 went to support select political candidates. This amount was over and above the contributions made by members and local unions and doesn’t include the salaries and staff costs of lobbyists.
Sources:
Thieblot, Armand. "Unions, The Rule Of Law, And Political Rent Seeking." CATO Journal 30.1 (2010): 23-44. Academic Search Premier. Web. 6 Dec. 2011.
Market Failure: Antitrust, positive and negative externalities, public goods, rent seeking, tariffs Government failure
Public Goods
According to Baye, a public good is a good that is non-rival and non-exclusionary in consumption. A good is non-rival in consumption if other people are not precluded from consuming a good if one person consumes it. A good or service is non-exclusionary if, after being provided, no one can be excluded from consuming it. Some examples of public goods include clean air, national defense, and radio waves. Everyone gets to consume clean air and it cannot be allocated to just one person. (Baye, 522) New technology has created new public goods, such as a lighthouses and street lights. (Wikipedia) The socially efficient of producing a public good is where the marginal cost of producing the public good exactly equals the total demand for the good.
Sources:
Baye, Michael, Managerial Economics and Business Strategy 7e
http://en.wikipedia.org/wiki/Public_good
Negative Externalities of Hydraulic Fracturing For Natural Gas (Oct. 10, 2011)
Hydraulic fracturing, or “fracking,” is the process of creating a fracture in an underground rock layer in order to release natural gas, coal seam gas, and petroleum for extraction.
The Process
Drillers drill down 5 to 8 thousand feet to the rock level and then drill horizontally through the rock bed. Water, sand, and chemical additives are pumped at high pressure down the well. This high pressure mix is forced through perforated sections of the well causing the rock to fracture and releasing the gas. The pressure is then reduced and the water is pumped out of the well leaving behind the sand which props open the cracks allowing gas and oil to flow and get collected through the well.The Benefit
Shale gas makes up roughly 25% of America’s natural gas supplies. Prior to the recent technology breakthroughs and popularity of fracking, shale gas only made up 1% of the gas supply and natural gas reserves were in decline. Prices on shale gas have also fallen due to increased production in fracking. Another benefit of fracking is the increase in jobs due to the increase in production. Some estimates state West Virginia has created around 72,000 jobs between Q4 2009 and Q1 2011 due to increased fracking.The Negative Externalities and Criticism
Gasland, a documentary on the harmful effects of hydraulic fracking was released in 2010. This documentary shone a harsh light on the process of fracking and its effects on the environment. One scene in the movie shows a man who is able to light his tap water on fire due to fracking being done nearby.The fracking process uses millions of gallons of water which are infused with chemicals that are known to be carcinogenic and caustic. Anywhere from 30 to 70 percent of this fluid is left in the ground. The waste water that comes out of the well is known as “produced water” and is pumped into a pit to evaporate. This water is also sprayed into the sunlight to help expedite evaporation. This evaporated wastewater will eventually fall back to earth as acid rain. In 2005, President Bush passed an energy bill which exempts oil and gas companies from the Safe Drinking Water Act. This bill also exempts drilling companies from being required to identify the chemicals they use in their drilling fluid.
Sources:
http://en.wikipedia.org/wiki/Hydraulic_fracturing
http://www.hydraulicfracturing.com/Process/Pages/information.aspx
http://www.bbc.co.uk/news/uk-14432401
http://online.wsj.com/article/SB10001424052702303936704576398462932810874.html
http://www.businessweek.com/magazine/content/11_11/b4219025777026.htm
http://www.gaslandthemovie.com/whats-fracking
http://www.girlygreengirl.com/2010/06/gasland.html
Antitrust and Google (Oct. 3, 2011)
Trouble with Search
Recently Google has come under fire by the Department of Justice and the FTC for claims that the search giant unfairly drives traffic to Google's own services. The case was brought to the FTC by Fairsearch.org, a group who represents Google's critics and competition. Fairsearch's claim is that Google is using deceptive and anti-competitive practices in order to manipulate search results to favor Google's products. Sites like Expedia, Kayak.com, and TripAdvisor claim Google promotes links to its own local business pages which deprives other sites of potential traffic.Google argues that users can easily navigate to other sites on the web and says it "built Google for users, not websites, and our goal is to give users answers."
On September 21, 2011 Google CEO, Eric Schmidt testified in front of the Senate Judiciary Committee. Schmidt made the point: "We use data sources that are our own because we can't engineer it any other way" and added "I disagree with the characterization that somehow we are discriminating against [competitors]." Google's PageRank system uses an advanced algorithm to rank websites based on the search engine's judgement of the likelihood that each result matches what the user was seeking. Schmidt admits that this algorithm is not perfect and is constantly being refined and tested.
Eric Schmidt's testimony goes on to mention that Google faces competition from, not only other general search engines (such as Yahoo!, and Bing) but also specialized search sites for restaurants (like Yelp), shopping sites (like Amazon and eBay), travel sites (like Expedia and Travelocity), and also mobile applications. Schmidt also discusses how many users are now turning to social media sites like Facebook and Twitter for information and answers to search queries.
This case is still pending and I will update this post with any new information as it arrives.
Sources:
Eric Schmidt Written Testimony
Judiciary Committee hearing, September 21, 2011
WSJ Online, Feds to Launch Probe of Google
PCMag, Schmidt Defends Google's Search Practices, Urges Careful FTC Review
Fair Search