Monday, September 26, 2011

Google's US antitrust hearing on 21 September 2011

On 21 September 2011 a hearing took place in the US capital before the Senate Judicial Committee's antitrust subcommittee concerning Google's market power. The hearing inquired about whether Google is abusing its market power by prioritising its own businesses ahead of its competitors' businesses when users conduct a search using the Google search engine.

I have included a discussion of Google and the antitrust hearing below.

By way of background, Google was created in 1998 by its founders Larry Page and Sergey Brin. When it started out, Google's only business was a search engine which had an algorithm which sorted websites according to their relevance to search terms entered. The search engine is still alive and well today, and the algorithm has become a lot more sophisticated. However in 2011 the search engine is only one part of the Google empire.

Google now owns a large amount of good and service providers on the Internet. It is these businesses which competitors are saying receive preferential treatment in Google's search engine. An example of the extent of ownership of businesses by Google in 2008 is set out in a blog article by Asher Richard (

Pyra Labs-Blogger

Neotonic Software-for CRM

Applied Semantics-for search

Kaltix Corp-for context sensitve search

Genius Labs-for blogging

Ignite Logic-web templates for law firms

Picassa-digi photo management

Keyhole Group-digital mapping

Where 2 Technologies-digital mapping

ZipDash-maps and traffic for mobile devices

2Web Technologies-spreadsheets


Dodgeball-mobile social networking

Reqwireless Inc.-Java browser

Current Communications Group-broadband internet

Android-software for mobile phone o/s

Transformic Inc-search engine for deep/invisible web

Skia-graphics software engineering

DMarc Broadcasting-digital radio broadcasting

Measure Map-analytics for blogs

Upstartle-Writely, document editor for the web

@Last Software-SketchUp 3D modeling

Orion-Referral search engine

Neven Vision-automatic information extraction from jpgs

Jotspot Ind-wiki platform for websites

YouTube-online video company

Endoxen-geomapping software

Xunlei-filesharing app for the web

Adscape Media-in-game advertising

Gapminder's Trendalyzer-presentation software

Doubleclick-ad platform for the web

Tonic Systems-document conversion technology

Marratech-video conferencing technology

Green Border Technologies-secure web browsing tech

Panoramio-photo site sharing for Google Earth

Feedbumer-RSS feed distribution analytics and management

GrandCentral-mobile voice management

Postini-communications security and compliance
There were several parties who gave evidence of Google's alleged improper conduct, including the CEOs of Nextag (a price comparison business) and Yelp (a review business). For instance, the CEO of Nextag (Jeffrey Katz) said the following:
Today, Google doesn’t play fair. Google rigs its results, biasing in favour of Google Shopping and against competitors like us. Google says that competition is just one click away, but that’s not even the question. The question is, should Google be able to use its market power to make it difficult for users to find us?
The CEO of Yelp (Jeremy Stoppelman) claimed that after partnering with Google, Yelp terminated the arrangement and discovered that Google was using Yelp's content anyway. Stoppelman also said that Google also prioritised its own reviews over Yelp's reviews (which were allegedly drawn from Yelp).

Google's ex CEO (from 2001 to 2011) Eric Schmidt was questioned by the subcommittee. Some interesting allegations put to Schmidt include:
  • When shoppers use search terms for price comparison websites, Google's own price comparison business continually ranks third, whereas its competitors have varied search success. Schmidt denied this.
  • Google has been and is still using restaurant reviews from a competitor, Yelp, to populate it's own restaurant review business. Schmidt said as far as he was aware this was not happening.
The hearing has not had an outcome as yet but I will report on it once it happens.

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