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When you stare down a $220 billion corporation, it’s hard not to blink. But if the Federal Trade Commission doesn’t deliver on its ultimatum to Google that it settle its antitrust problems soon for real relief or face prosecution, then consumers will never get the open and unfettered online and mobile access to information they deserve.
While the government’s battle with Microsoft in the 1990s was about whether the dominant software company could bundle software and an Internet browser, the antitrust case against Google is about whether one company should have so much control over online information that it can steer us any where it chooses for its own profit.
This is the power to make or break businesses, control online discourse, and steer consumers to the Internet giant’s own websites and affiliated businesses, all based on tweaking an unseen algorithm and holding a network of key online and mobile gateways and properties.
Google’s 70% control of online searches and 90% control of mobile searches, along with its dominant Android mobile operating system, patents, and vast content acquisitions make it the Standard Oil of our time.
The allegations against Google are that it restrains online trade with biased search results that drive consumers to the content it owns (Google Travel, Products, YouTube, Maps, Google+, etc.) or content it chooses, as opposed to that favored organically by the public.
Restraint of trade may be different today than in 1911 when the U.S. Supreme Court ordered John Rockefeller’s Standard Oil broken into parts under the Sherman Antitrust Act. Nonetheless the antitrust principle of preventing dominant players from playing unfairly and hurting consumers by driving out legitimate competition is very real for Google’s 2012 business model.
The principle at stake in the FTC case is critical:
If you want to do business online, should you be forced to do business with Google?
Companies like Foundem, Nextag, AsktheBuilder.com and Kayak have been threatened with closing because they have fallen on the wrong side of the assumptions in Google’s Search algorithm. The evidence shows that Google increasingly steers consumers to what it determines to be “quality” web sites – aka those that use Google services and support its business model. If you are not on Page One of a Google Search, your business is not alive, even though you may be the business that consumers prefer in the market, just not Google’s “type” of business.
Counterfeit industries and black markets for prescription drugs, predatory loans and entertainment have also profited because Google has turned a blind eye to the source of its massive advertising dollars and, as a result, companies that play by the rules have been hurt. Example: Google paid the US $500 million last year for illegal pharmacy advertising. Copyright and other intellectual property rights held by authors, artists, musicians, journalists and Hollywood are also increasingly thrown to the wind because of Google’s dominance, bias against respecting them and the money to be made from “free” content and pirated products.
Can such a dominant search and content Goliath really provide open access that isn’t biased toward its ownership interests?
Google founders Larry Page and Sergey Brin didn’t think so when they went to Stanford.
“We expect that advertising funded search engines will be inherently biased towards the advertisers and away from the needs of the consumers,” they wrote in Appendix A of their research paper explaining their search technique. “Since it is very difficult even for experts to evaluate search engines, search engine bias is particularly insidious.”
Consumers often don’t know that they are being steered or why, so it takes an engineer to show them. Recently engineers from Twitter, MySpace and Facebook showed that Google’s new social search feature steers users to less relevant and less popular spots, like Google+, to promote Google services, rather than Twitter and other spots with unquestionably more traffic. Google increasingly wants our world to be its world.
The young Google founders argued in their Stanford research paper that launched Google that overt bias won’t be tolerated, but covert steering would be acceptable. “For example, a search engine could add a small factor to search results from friendly companies, and subtract a factor from results from competitors,” they wrote. ” This type of bias is very difficult to detect but could still have a significant effect on the market.”
And this is the most dangerous type of bias in the hands of company as big and controlling as Google.
The European Commission is demanding the Internet giant change its ways or face a formal complaint. The Federal Trade Commission, rumored to be backing away from a staff recommendation in favor of legal action, owes the public a prosecution of Google in order to reveal the evidence it has collected. Help us keep the FTC off the fence – send an email to the Commission today to tell them to file the antitrust lawsuit today!
Originally posted on November 30th, 2012 on the Hill. Posted by Jamie Court, author of and President of Consumer Watchdog, a nonpartisan, nonprofit organization dedicated to providing an effective voice for taxpayers and consumers in an era when special interests dominate public discourse, government and politics. Visit us on Facebook and Twitter.
13 Comments
Of course the FTC should proceed against Google, but it won’t. Because Obama is a corporatist tool.
All of the online petitions in the world won’t change that. What continually surprises me are the people who still think they might.
I agree that Google’s abuse of it’s search/advertising monopoly should be addressed. However, the kitchen-sink approach to the criticism here makes me wonder if folks will walk away with a better understanding of why this is the case or just be encouraged to join in a round of unfocused Google-hate. Some stuff here doesn’t pertain to the discussed FTC action at all.
I guess it’s valid to criticize “black market pharmaceuticals” having been promoted though Google’s ad services. OTOH, in different contexts folks at FDL have been known to applaud providing access to low-cost drugs from abroad in contrivance of American law. I’m hesitant to jump on the bandwagon of demanding Google proactively run their advertising department as a branch of American law-enforcement. Any way it goes, an ad product is apples vs. oranges to a search product. I don’t understand how running the ads you highlight would hurt companies that “play by the rules.” There are not enough advertisers to fill all the inventory of web-sites looking to monetize as it is. It’s not like “good” ads must get bumped in order to show “bad” ones.
Google is hardly a monolith. While abusive in the search arena, they also serve as a bulwark against the sorts of terrible policy traditionally rammed through without discussion by politicians (typically Democrats) on the payroll of the RIAA/MPAA. With that in mind, it’s a bit unsettling to see this article attack Google on copyright.
Google has been laudable for it’s work promoting fair use and resisting disasters like SOPA/PIPA. At this point, representatives of “big content” are largely focused on destroying the free internet and along with it laying waste to vast swaths of formerly fertile human intellectual exploration and artistic expression – the analogs for our times tentatively (and increasingly) restricted by exclusive virtue of the fact that much modern human expression is now done using a digital medium. Google’s stance in opposition to that trend – in particular, lending resources and clout to substantively defend and push the boundaries of fair use – is one place where the company, on balance, should be generally applauded not criticized.
There are many, many things over which to fault Google. Abuse of it’s search product is honestly just one of them – albeit an important one. The FTC should absolutely proceed with a case in that regard if necessary to secure proper relief (as appears to be the case). But there is no need to muddy the waters, and certainly no justification to serve as water-carrier for the MPAA, in order to promote action on the issue.
Yeah. But which one of his many corporate masters does he serve mostest? We’re moving into a situation where once-distinct centers of power/money/influence are beginning to step on each others’ toes.
There are some heavy-hitters in both corners. At this point, Obama is likely pretty torn as to which path will provide the biggest personal payout.
Recommended.
And I’ll bet that causes him far more discomfort that anything else in his life, including all the innocent people maimed and killed by his policies.
Bottom line, when a corporation controls that much market share, it should be broken up, period. Doesn’t matter how much the corporation supposedly plays fair.
Especially when the constitution provides “equal protection” while these laws have all the appearance of “profit protection” for a distinct minority.
Not that I actually understand the phrase “in contrivance of American law”.
Much of the progress in this world has come about because one group of the powerful pissed off another group of the powerful. (See also: Magna Carta, which was intended to benefit a few noblemen but wound up serving as the foundation for jurisprudence in English-speaking countries.)
Superb comment, kgb999, as is your other comment.
This one at @3, however, distills the moment down to its primary and most appalling essence: “At this point, Obama is likely pretty torn as to which path will provide the biggest personal payout.”
DW
I really don’t care. A corporatist is fascist is a corporatist.
Uuuuh. Yeah. Yikes. Try “contravention” instead.
[It sure *sounded* like that might be right #*@&!~]
As PW points out up-thread, a ton of things “the people” have accomplished in terms of what we call freedom were actually carried by powerful interests for their own benefit. Understanding that many struggles are between such powers can help target effective approaches when the interests of one are clearly more in line with those of wider society than the alternative being promoted by a corporate rival.
The SOPA/PIPA thing was a manifestation of that. Overwhelming consumer support of the corporations who fought against those policies made it damn near impossible for the corporations trying to push the crap through to operate without risking serious damage to their primary businesses. So they backed off and left their politicians without *any* cover at all … and the deals died. That would never have happened without the opposition being driven by billion-dollar-corporate interests (Google, Wikipedia, Twitter, Reddit, etc, etc).
Something similar has been happening in Europe with that largely secret treaty driven by the same interests behind SOPA. In that case, Obama has the process totally rigged from our side; he’s given the MPAA and RIAA literal seats at the negotiating table while congresspeople (and other corporate stakeholders) aren’t even allowed to see a draft until we’re already committed. Internet freedom advocates find ourselves supporting corporate interests manifesting their desires by leveraging power in foreign governments to counter the corrupt actions of our own politicians under the thrall of more pernicious corporate influence.
Does it suck that the world’s governments are so obviously bought-and-paid-for by the highest bidder? Hell yes it does. But if we’re just going to sullenly throw up our hands every time an issue is driven by extreme corporate interest … there doesn’t seem to be much point in trying to stay engaged.
In this case with Google, we know Obama is simply looking for a payout. We also know that action on Google’s abuses would be in the best interests of wider society. Leaving aside the extreme distasteful nature of our current situation, assuming we want action, doesn’t it make sense to figure out what corporate interests are offering Obama the alternative payout and try to strengthen their position?
The problem isn’t, specifically, Google having achieved dominance in search. That level of success alone is not a reason to break up a company. If Google only did search, their dominance in the industry wouldn’t really be that big of a problem (in fact, I’m not sure how one would “break up” a company that only offered a single product of search – no matter how dominant it got).
The problem is that Google now also owns a lot of other businesses in addition to their original search product – music distribution, retail software, cloud storage, social networking, electronics, etc. What they have been doing is use their control of search to make competitors’ products/services disappear from searches and instead promote their own alternative at the top of every page … disguised as neutral search results. They have the ability to make any business disappear from 70% of the desktops and 90% of the mobile devices on the planet – and have been clearly demonstrated leveraging that power against competitors on many occasions.
It is the nexus(!) search dominance and other online business endeavors reliant on search-driven traffic for success that has allowed Google to create brutal market distortions. Making matters worse, the nature of these distortions is often horribly misunderstood by the general public. (Note to article author: just because a web site “unquestionably has more traffic” does not implicitly mean that the site would/should be considered more relevant and appear at the top of search results … search isn’t typically based on a popularity contest, nor would we want it to be).
Long term, I think you are probably right. The only concrete solution to the situation would be requiring Google to spin-off it’s search product into an entity with governance entirely distinct from the business products that rely on search for success. The only alternative I can come up with would require Google to disclose proprietary methodology for peer review and certification that their search algorithms and implementation don’t favor Google products. That type of approach pretty much puts the government in position of directly dictating (or at least approving) technological decisions for the company in perpetuity, a solution I do not favor at all.