Two Senators, Herb Kohl, the Chairman of Subcommittee on Antitrust, Competition Policy and Consumer Rights along with Mike Lee, the ranking member of Subcommittee on AntiTrust sent a letter to the Chairman of the Federal Trade Commission today asking the FTC to investigate Google as to whether they are violating Antitrust Laws and the FTC Act.
In their letter to the FTC they write in relevant part:
“””We are writing to you regarding our examination of competition concerns arising from the business practices of the world’s leading Internet search engine, Google Inc. (“Google”). On September 21, 2011, we held an Antitrust Subcommittee hearing to examine allegations that Google’s search engine is biased in favor of its own secondary products and services, undermining free and fair competition among e-commerce websites.”
“While we take no position on the ultimate legality of Google’s practices under the antitrust laws and the FTC Act, we believe these concerns warrant a thorough investigation by the FTC. We detail below a number of concerns raised at the hearing, in the course of our Subcommittee inquiry, and by a number of industry participants that we believe deserve careful review.””
“The Internet is a driving force of the American economy. Today, approximately 240 million people throughout the United States regularly use the Internet, and last year their activity generated nearly $170 billion in commerce. Recent studies show that 92% of adults online use search engines to access information on over one trillion websites.””
“The number of Internet websites will continue to grow, making the role of Internet search engines ever more important for those seeking information or engaging in commerce online. “”
“”In July 2011 alone, there were 17.1 billion search queries in the United States, up 3 percent from the previous month. Google is dominant in general Internet searches, with a 65 to 70 percent market share in computer-based Internet search, and a market share of at least 95 percent for Internet searches done on mobile devices.
“In response to Senator Kohl’s question at our Subcommittee hearing to Google’s Executive Chairman Eric Schmidt as to whether Google is a monopolist in online search, he responded, “I would agree, Senator, that we’re in that area.”
“Google faces competition from only one general search engine, Bing, a partnership of Microsoft and Yahoo!, which is a distant second in market share and is losing an estimated $2 billion annually.”
“Given the scope of Google’s market share in general Internet search, a key question is whether Google is using its market power to steer users to its own web products or secondary services and discriminating against other websites with which it competes.””
“Google began as a general Internet search engine, whose mission was simply to identify the web pages most relevant to user queries. Google’s stated goal was to transfer users from its search results page to the websites listed on that page as soon as possible. As Google co-founder and current CEO Larry Page said at the time of its Initial Public Offering in 2004, “We want you to come to Google and quickly find what you want. Then we’re happy to send you to the other sites. In fact, that’s the point.”
“”Google’s critics argue that given its acquisitions and development of these varied web products and services, Google has a strong incentive to bias its search results in favor of its own offerings.”
“Rather than act as an honest broker of unbiased search results, Google’s search results appear to favor the company’s own web products and services.”
Google has made over 100 acquisitions since 2001, including: Motorola Mobility (2011) (still under Justice Department review), Zagat’s (2011), Like.com (2010), ITA Software (2010), AdMob (2009), DoubleCJick (2007), YouTube (2006), and Android (2005).
“Given Google’s dominant market share in Internet search, any such bias or preferencing would raise serious questions as to whether Google is seeking to leverage its search dominance into adjacent markets, in a manner potentially contrary to antitrust law.”
“As consumer surveys show that.88 percent of consumers click on one of the first three links, these statements appear significant when analyzing Google’s potentially anti-competitive practices.””
“We are committed to ensuring that consumers benefit from robust competition in online search and that the Internet remains the source of much free-market innovation. We therefore urge the FTC to investigate the issues raised at our Subcommittee hearing to determine whether Google’s actions violate antitrust law or substantially harm consumers or competition in this vital industry.”
“Thank you for your attention to this matter.”
And the sad thing is, the moment they went down this road, smart and credible people started seriously warning that they were neck deep in anti-trust waters yet they persisted.
I don’t think they can be broken up, on the basis of what their business is and how they work. I wonder what sort of civil penalties are available to discourage antitrust practices? Are they grave enough to seriously dissuade a multi billion dollar operation to let go of anti-competitive (but advantageous) practices?
Google will fall from the top spot as soon as another site can offer what Google (the search engine) offers. And do a slightly better job of it. To do that, a competitor needs the same information Google has collected: a cache of the crawlable web.
Does Google try to prevent this from happening?
Consider their robots.txt file. This file is a website’s stated “permission to crawl”. It sets forth what information may or may not be crawled.
Google crawls other websites aggressively and incessantly in order to do business. Other sites permit this via their accomodating robots.txt file.
However Google’s robots.txt allows almost no crawling.
The mission of the company is purportedly to organise the world’s information.
But this requires cooperation from others. As such, it is not a mission that can be accomplished single handedly by Google. A prerequisite is the world’s consent to copy and store their information.
Google relies on others to allow Google to access their information.
What’s interesting is that once Google has made and stored a copy, others are not permitted to access the information in the same manner as it was collected.
Simply put, crawl most websites and on rare occassions you might get a complaint, or a request to slow down how fast you’re crawling.
Crawl Google, who generally has vastly more bandwidth to afford its users than most websites, and they will ban you, swiftly and without warning.
Is this reasonable? If so, why?
Remember this is not information Google has generated. (This is not like someone crawling Amazon.) Google has simply copied and stored a copy of someone else’s infromation.
ALL countries of the world should investigate Google for possible antitrust violations!
A trillion websites? That’s quite a few
No empire lasts forever. Is google an online empire?
Long ago, the bean counters probably calculated that it would be much more profitable to go ahead and do pretty much Anything Google wanted to do, and just “Pay The Piper(s)” later.
As the inquiries, investigations and lawsuits drag on through time, fines and penalties will surely be paid to politicians, governments and other injured parties.
And, Google will still have more cash than places to put it.
It will be like taking a handful of light away from the Sun.
Fortunately, absolute power doesn’t last forever.
But, for now …The Internet Belongs To Google.
@Greg: Yeah, I caught that too. Stunning.
If you really want to see how technically clueless our representatives are, try watching the SOPA hearings. It’s downright embarrassing how uninformed they are. If they’d ask for help from actual experts it might not be so infuriating. But they refuse to because they’re so used to railroading through legislation written by their lobbyists.
In the broader picture, the Hollywood-financed reps seem to have smacked a hornet’s nest because people are starting to fight back against their business as usual attitude. And the reps are taking notice. Hopefully the same fervor will help shape future technical legislation like this one so it applies common sense instead of corporate partisanship. The point is that a fair and balanced approach to handling the Google monopoly is possible if outside influences are kept in check.
Sorry, somewhat ot, my 2 cents.
Big G really does “need” to be reined in, tamed and humbled
The bigger they are the harder they fall. I see Google being broken up into pieces.
No company I have ever seen has been allowed to push the boundaries so far ; Even Microsoft never got this far, IMO.