The knives are out in Washington, D.C. for Google. Google has long been under the threat of an antitrust investigation in the U.S., but this time it looks like it is about to happen. According to the Wall Street Journal, the FTC is preparing a major antitrust investigation into Google’s “core search advertising business.” No wonder Larry Page and Eric Schmidt don’t want to appear before a Senate hearing also looking into its market power.
According the the WSJ:
The new FTC investigation . . . will examine fundamental issues relating to Google’s core search advertising business, which still accounts for the overwhelming majority of its revenues. Those will include whether Google—which accounts for around two-thirds of internet searches in the U.S. and more abroad—unfairly channels users to its own growing network of services at the expense of rivals’.
The issue appears to be that Google is using its market power in search to push consumers to its own services. Perhaps the most egregious example of this has been with Google Places, which comes up at the top of search results for pretty much every local search, whether or not it is the best result. The FTC, no doubt, will be asking Yelp about this, which is constantly having run-ins with Google Places. Expedia, TripAdvisor, and Microsoft have also complained about lost clicks.
Are there other examples, and do they rise to the level of antitrust? Most video searches go to YouTube, for example. But is that because Google pushes them there or those are the best results?
It’s going to be hard to prove one way or the other. I’d argue that if a full-blown antitrust investigation does get launched, it may be a signal that Google’s market power has peaked. Remember when Microsoft went through its antitrust ordeal? It’s been downhill for them ever since. And now, just as social (and Facebook) is starting to take over from search as the fundamental way information is shared, discovered, and organized on the Web, the government is focusing on the last decade’s war.
I wouldn’t worry too much about Google’s market power. Technology has a way of overthrowing the powers that be more quickly and naturally than the government ever will.
Photo credit: Simon Law
Google provides search and advertising services, which together aim to organize and monetize the world’s information. In addition to its dominant search engine, it offers a plethora of online tools and platforms including: Gmail, Maps, YouTube, and Google+, the company’s extension into the social space. Most of its Web-based products are free, funded by Google’s highly integrated online advertising platforms AdWords and AdSense. Google promotes the idea that advertising should be highly targeted and relevant to users thus providing...