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Policy

Google: Friend or Foe?

9/26/2011 12:01 AM Eastern

Washington — “Googled” has become a new verb for
searching the Web. “Senate-antitrusted” may become a new
verb for putting that company under the federal government’s
microscope.

Google, which has grown in a few short years from a search
engine to an Internet conglomerate with interests in advertising,
video and wireless, is already the target of a Federal Trade
Commission inquiry into its dominance over online search
and Internet advertising.

Last week, at the first of what could be several Capitol Hill
hearings on the company — titled “Th e Power of Google:
Serving Consumers or Threatening Competition?” — the
company got a taste of Congressional angst over its size
and power. Democrat and Republican lawmakers alike expressed
concerns that the company’s aims had changed as
it acquired businesses —YouTube, Motorola Mobility — and
it now had the power and incentive to favor its own products
in the searches it dominates.

During the debate over the Federal Communications Commission’s
network neutrality rules, which will take effect Nov.
20 (see sidebar), critics of the rules, including cable operators,
suggested that if the FCC was going to regulate Internet-service
providers as the “on-ramps” to the net, they should also
be looking to Internet search gatekeepers.

“Some Internet application providers — in particular,
search and browser applications — serve as principal gateways
to content and applications on the Internet for far
more consumers than are served by any ISP,” the National
Cable & Telecommunications Association said in comments
submitted to the network-neutrality proceeding.
“The obvious example is Google.”

Legislators last week agreed that Google was the obvious example
of a company whose dominance raised concerns about
access to content. Is it possible for Google to be both an unbiased
search engine and at the same time own a vast portfolio of
web-based products and services?, said Senate Judiciary Committee
Antitrust Subcommittee chairman Herb Kohl (D-Wis.).
“Does Google’s transformation create an inherent confl ict of
interest which threatens to stifl e competition?”

Google executive chairman Eric Schmidt, the hearing’s star
witness, came under plenty of tough questioning from both
Democrats and Republicans.

Schmidt said the company was doing the best it could in
employing a complicated algorithm (it changes about once
every 12 hours) to provide the most useful answers for its
users. He said that sometimes the best thing for consumers
is for Google to send them to Google content for the answers,
but that its goal was to serve those users, not other
Web sites. He conceded that the system was not perfect and
sometimes got it wrong.

Schmidt argued that it makes it easy for users to move to a
competitor, like Bing, but various legislators pointed out that
Google has 65-70% of computer search, 75% share of advertising,
and somewhere between 95% and 97% of the search market
on mobile devices, where many in government assume
online search is migrating.

That, suggested Kohl, fits the antitrust law definition of a
monopolist with special obligations. Schmidt said Google understood
its obligations, had thought about what it should do
when it got “big enough to be evil,” and had taken steps to address
that.

September