Do Google's business practices serve consumers or threaten competition? That's the question before a Senate hearing Wednesday where Google executive chairman Eric Schmidt will testify, hoping to halt potential antitrust actions against the company and fend off concerns that Google really is the new Microsoft.
Wednesday's hearing by the Senate Subcommittee on Antitrust, Competition Policy and Consumer Rights follows a recent decision by the Federal Trade Commission to begin a preliminary antitrust probe of Google. Concerns over Google's behavior include the company's ever-expanding business empire, how it deals with competitors, and whether it unfairly penalizes businesses that run afoul of its rules.
"Google is abusing its dominant position in search to stifle competition and capture more control over the flow of information and commerce online," according to FairSearch, a coalition of businesses complaining of Google's use of its market power. "Officials charged with protecting innovation, economic growth, and consumers must step up and enforce existing laws that will prevent Google from further stifling competition on the Internet." FairSearch members include Microsoft, Travelocity, Kayak, Expedia, and Hotwire.
For its part, Google welcomes the opportunity to address concerns about how it operates. "We are actually looking forward to the hearing," Schmidt recently told ABC News' Christiane Amanpour. "Because what we want is sort of a fast hearing of all of these issues."'
Here is the Eric Schmidt interview with ABC News:
A Pivotal Moment for Google?
It's unclear if anything will happen as a result of the hearing, but if history is any guide, Schmidt's testimony could be a pivotal moment for Google's antitrust drama. In March 1998, then Microsoft CEO Bill Gates appeared before the Senate Judiciary Committee to answer similar accusations of monopolistic behavior. By May, the software giant was hit with an antitrust suit, the effects of which ended just recently. Google will try to avoid a similar fate.
Wednesday's hearing promises to be interesting, with Schmidt's testimony followed by comments from representatives for Yelp, Expedia. and shopping site Nextag. But while antitrust watchers may be glued to CSPAN during the hearing, should anyone else care?
If you're a Google user you might, since the hearings on Wednesday will examine several ways you use Google products right now. Here's a breakdown of what's being examined.
If you search for certain things in Google--such as a specific address, landmark or city--one of the first results you will see is a Google Map or a link to Google Maps. For other searches--such as weather, time, flight information, and stock quotes--you will also see links to Google products or even answers from Google right on the results page.
That may be handy for you, but the downside of Google's actions is that sites that used to get traffic from a Google search such as Mapquest, Expedia, or weather and stock information sites, lose traffic. With Google providing the answers users are looking for instead of third-party Websites, the search results for competing products are effectively demoted.
"We found that what people want is, when they go to Google, they want the answer right now," Schmidt told ABC News. "So in certain categories--the weather, maps, things like this--if we can algorithmically compute the answer of that quickly, we'd rather give it to you."
Microsoft's Bing offers similar information for searches thanks to its Instant Answers service that favors information from Bing Maps, Bing Weather, Bing Finance, and Bing Travel. The Instant Answers service is only available in the U.S. version of Bing.
Another concern likely to be brought up is Google's use of third-party content in its own products. One of the biggest complaints against Google has come from Yelp, whose reviews used to show up in Google's Place Pages. Last year, Yelp's content was removed from Google Places, and the two companies have been bickering about Yelp's position in Google Search ever since.
Google Places currently uses its own user reviews with links to other review sites such as Menu Pages, Urban Spoon, and recent Google acquistion, Zagat.
There's also the question of Google's habit of penalizing sites that run afoul of Google's rules about search spam---results offering little or no value to the user. Google has stated before that it penalizes some vertical search engines--sites dedicated to a specific search category such as shopping--accusing them of being spam. The search giant earlier this year also penalized the search results for department store chain J.C. Penney after an investigation by The New York Times showed deceptive search engine optimization practices were being used to favor the retailer. J.C. Penney denied any wrongdoing.
There are also concerns that Google manipulates its search results to favor its own information or downplay information from others. The Electronic Privacy Information Center, a civil liberties and privacy advocacy group, recently sent a letter to the FTC complaining that Google was favoring its own material on searches for the keyword "privacy" on YouTube.
There may also be questions raised about Google's large number of disparate businesses such as search, the Android mobile operating system, YouTube, Google Places (local search), flight data company ITA/Google Flight Search, Zagat, Google Books, Maps, Google Apps for Business, and Chrome OS for laptop computers. Most of these services are centered around encouraging users to stay in Google's ecosystem and use its biggest revenue generator: Google search advertising.
Google is the most popular search engine in the United States with a market share of nearly 65 percent.