Google antitrust hearings started today on Capitol Hill, one year after Texas Attorney General began an antitrust review of Google.
Last year Texas AG Abbott was looking whether Google intentionally hides search results that might promote its competitors. At the same time EU antitrust regulators started a similar investigation. The Texas case involved three companies – Foundem, SourceTool/TradeComet, and myTriggers. The main controversy was about Google's dealings with these companies.
Google accused Microsoft for hiding behind its accusers. The three co-parties alleged that their less desirable rankings on Google are result of Google's effort to attack the competition. They were claiming that Google's algorithms downgrade their site ranking because they are a direct competitor to the represented search engine.
Today’s Senate Judiciary Committee’s antitrust hearing is investigating Google’s business practices. Famous executive chairman Eric Schmidt will be responding to questions. After his testimony Google’s rivals – consumer review site Yelp, online travel site Expedia and Nextag – the online comparison shopping site will argue that Google unfairly demotes them.
Google’s advertising powerhouse is making $30 billion in ad revenue each year and apparently its business practices and algorithms are under attack and finally supervised by a Federal antitrust investigation.
According to the testimony given by the restaurant review site Yelp, after Google failed to acquire the company in 2009, the web monopolist started including Yelp reviews in its Google Places service, but was slammed for doing this by Stoppelman (Yelp). Google then removed Yelp reviews and when Yelp’s CEO complained about Google scraping Yelp’s reviews, the Company told him that if he didn’t like it, he could have his service results removed from Google’s entire search index. That sounds like twisting arms and monopoly techniques to me – if you don’t play with Google and let your reviews being scraped you will disappear from our organic search?!
Another problem involves Google’s monopoly position to invade new markets.
The accusations are two-sided: Google uses its 65% search engine market share to lure consumers toward its own services and properties and steer away its competitors by not engaging in a ‘search neutrality’ approach.
In the other side, Google uses the monetary funds generated by its dominant position in search and search related advertising campaigns to fund money-losing businesses to compete with others, like the notorious acquisition of the Android business. Google has already acquired travel data base information site ITA, which provides information that is bought by online travel website Expedia. It has started the acquisition of Motorola, which is estimated to give Google control over thousands of mobile-technologies, all coupled with patents that will be used to support Android.
If U.S. Antitrust Laws and Practices want to protect us as consumers, serve the interest of fair competition in business, then it has to promote accountability and democratic oversight over business actors that act on the abuse of near-monopoly powers, competitor bashing and predatory tactics.
Ironically, As Google defends their position as not violating antitrust laws stating that the search display results pages or SERPS are all algorithmically derived and cannot be manually configured to favor or unfavor individual businesses. The New Yorks Times presented their findings to Google. Googler Matt Cutts, head of webspam, regarding the JC Penny situation and confirmed that the tactics violated the Google webmaster guidelines and shortly after, the J.C. Penney web site was nowhere to found for the queries they had previously ranked number one for. Matt tweeted that “Google’s algorithms had started to work; manual action also taken”. This statement by Matt Cutts, proves that there is a manual lever for the Google algorithm, significantly weakening the internet giant’s anti trust defense.