Senators seek FTC inquiry into Google antitrust violations

The two ranking members from each party on the Senate subcommittee on antitrust and competition, Senators Herb Kohl (D-Wis.) and Mike Lee (R-Utah), wrote a letter asking the Federal Trade Commission to launch an investigation into the business practices of Google, and how it uses dominance in search to promote its other products.

Their request is the result of their own inquiry into the matter, in which Google Chairman Eric Schmidt testified back in September of this year. In that hearing Schmidt responded, when asked if Google was a monopolist of the search industry, "We are in that area."

Any discussion of technology and antitrust investigations brings up obvious references to Microsoft's now famous fight against the Department of Justice during the 1990s, for utilizing it's monopoly of desktop operating systems to advance its Internet properties. This was something probably not lost on Schmidt who during his testimony in September pointed out, as reported in the Washington Post, "We get it. We get the lessons of our corporate predecessors."

In their letter, they ask the FTC to investigate if Google can still be considered an unbiased provider of information when they have an assortment of properties that they've purchased or developed to aid in the promotion of their advertising business. The letter points out that Google results tend to favor their other properties like Google Maps, Google Finance, Google News and YouTube, and that in recent years they've been very successful at displacing the previous market leader in those areas. As evidence of bias they point out that in 2007, Google's own Marissa Mayer, Vice President of their location offerings, did preference their own websites because "it only seems fair, right?"

Yelp CEO Jeremy Stoppelman had previously testified to the subcommittee that 75% of their traffic currently comes from Google directed searches, but indicated that this is only because of the service's current popularity in comparison to even Google's own Local service and that given Google's current practice he probably wouldn't launch his business in today's environment.

Google FTC Letter 12-19-11

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11 Comments

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Got to love the government. So what if google is more popluar then others its the people who make the decesion. Then again people elected bush for a second term and look how we ended up.

It's their search, who cares what they do with it. It's not a product sold to the public. People have a "choice" to use it or use another search provider. Advertisers have a choice to use it or use another product. No one is being forced unfairly.
Get over it Government.

Duckie37 said,
It's their search, who cares what they do with it. It's not a product sold to the public. People have a "choice" to use it or use another search provider. Advertisers have a choice to use it or use another product. No one is being forced unfairly.
Get over it Government.

What does being sold have anything to do with it? You still have the choice whether or not to buy it...

Let's put the monopoly issue asides. You know these investigations will go nowhere and the fact that Google is such a popular company with passionate followers, it's stupid for congressmen to go after them really. It only makes sense if that they are in fact lobbied by Microsoft or Apple.

Google is not the problem. They do not monopolize using unscrupulous business practices, they simply out-innovate the competition. Google has built a brand based on quality products that make customers think that if it is Google, then it must be the best. There is nothing uncompetitive about this.

Government should really look at Apple. They actively use vendor lock-in to keep competitors out of all markets they are in (Music - iTunes Music Store, Mobile Phone - iPhone, Portable Media Player - iPod, Tablet - iPad, Computer Hardware - Mac, etc.).

When a competitor tries to compete with them in one market, Apple will use their control in other markets to block them, or put out a software update to lock them out, if the competitor tries to work around the block.

For example, Apple using their market dominance to set unfavourable terms on the iTunes Music Store (Not that I like the record companies, but they are using 'agree or else we will remove your content and you will lose market' line), iTunes itself (Blocking Real Networks from interfacing their music store with iTunes), Not allowing content to be transferred to an iPod with anything other than iTunes, Blocking apps on the iOS App Store that compete - otherwise known as "providing duplicate functionality" (like Web Browsers, although they finally were allowed in), Not allowing legally purchased Mac OS X to run on 3rd Party Hardware, Not allowing competing 'App Stores' to use the iOS platform (Have to Jailbreak to do this) and so on. Maybe something from Steve Job's book might help the case.

Simon- said,
Google is not the problem. They do not monopolize using unscrupulous business practices, they simply out-innovate the competition. Google has built a brand based on quality products that make customers think that if it is Google, then it must be the best. There is nothing uncompetitive about this.

Government should really look at Apple. They actively use vendor lock-in to keep competitors out of all markets they are in (Music - iTunes Music Store, Mobile Phone - iPhone, Portable Media Player - iPod, Tablet - iPad, Computer Hardware - Mac, etc.).

When a competitor tries to compete with them in one market, Apple will use their control in other markets to block them, or put out a software update to lock them out, if the competitor tries to work around the block.

For example, Apple using their market dominance to set unfavourable terms on the iTunes Music Store (Not that I like the record companies, but they are using 'agree or else we will remove your content and you will lose market' line), iTunes itself (Blocking Real Networks from interfacing their music store with iTunes), Not allowing content to be transferred to an iPod with anything other than iTunes, Blocking apps on the iOS App Store that compete - otherwise known as "providing duplicate functionality" (like Web Browsers, although they finally were allowed in), Not allowing legally purchased Mac OS X to run on 3rd Party Hardware, Not allowing competing 'App Stores' to use the iOS platform (Have to Jailbreak to do this) and so on. Maybe something from Steve Job's book might help the case.

Jobs had dinner with obama, so we know jobs had somewhat of a connection with the goverment

Whenever any company has a market share at greater then 60-80 percent of the entire global market for something the government must get involved.. I personally think that the google page is like the Windows XP of the internet.. its so boring and old.. I am just glad microsoft is pouring so much money into bing because google really does need some competition..

ShareShiz said,
wasteful spending by the government once again

Exactly. Google's results are dependent on date (just recently) and how many other web pages have their websites linked. If that wasn't the case, SEO would be obsolete or at best mythical.

It's not Google's fault regular people like their web sites/services.

Marshalus said,
It is if "regular" people don't know alternatives exist because Google search doesn't show them.

You missed my point. Google search algorith doesn't show them. Their results are displayed in order of relevance, date and popularity on the internet (how many external web links points to a specific web address).

This is just a meaningless inquiry by some senators who have probably lost some money in their own internet businesses. Sour grapes, 'tis all