Google under scrutiny over search dominance

Afp
Wednesday 21 September 2011 00:46
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Google's executive chairman Eric Schmidt will take center stage at a Senate hearing Wednesday into whether the Internet giant is abusing its dominant position in online search.

The Mountain View, California-based Google has drawn increasing scrutiny from US and European regulators as it has grown over the years from a scrappy Silicon Valley startup into an Internet powerhouse.

European Union competition watchdogs began an investigation into Google in November and the US Federal Trade Commission (FTC) opened its own probe into the company's lucrative search and advertising business in June.

As it has grown, Google has branched out into various businesses including online mapping, shopping, travel and providing operating systems for mobile phones and tablet computers.

The Senate hearing, entitled "The Power of Google: Serving Consumers or Threatening Competition?" targets the activity at the heart of Google's livelihood: search.

According to the tracking firm comScore, Google accounted for 64.8 percent of US search market share in August followed by Yahoo! with 16.3 percent.

Microsoft, which has poured millions of research and advertising dollars into its own Web search engine, Bing, controls 14.7 percent of the US search market, comScore said.

Among the parties filing anti-trust complaints against Google in Europe is Microsoft, which itself was the target of US anti-trust action in the 1990s.

At issue in the hearing of the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights is whether Google gives preference to its own websites or products in search results.

Schmidt, who was replaced as Google's chief executive by co-founder Larry Page in April, will be the star witness at the hearing, which begins at 2:00 pm (1800 GMT).

Also scheduled to testify is Yelp co-founder and chief executive Jeremy Stoppelman, who has openly accused Google of favoring its own products over the online restaurant reviews from his site.

Also testifying is Thomas Barnett, who served as counsel for Expedia.com, when it joined with other online travel websites in a bid to ground Google's proposed $700 million acquisition of flight information company ITA Software.

In an interview Sunday with Christiane Amanpour of US television network ABC, Schmidt welcomed the EU and FTC inquiries and noted that they "haven't really complained about anything yet."

"I think it's fine that they're investigating these sorts of questions," he said. "I think that's appropriate, in a democracy.

"I think at the moment this is more of an awareness issue," Schmidt said. "We have an opportunity to communicate what we're doing. Senators have an opportunity to communicate their concerns and I think that's very good.

"I'm pretty comfortable that we're in good shape," he said.

As for whether Google favors its own services, Schmidt said "we don't take the position of judging what our consumers are looking for.

"We're here to serve consumers and do it quickly," the Google chairman said. "In my experience as long as we've stayed focused on the end-user, we end up doing the right thing and staying on the right side of these laws."

In a blog post at the time of the opening of the FTC probe, Google's Amit Singhal also said he was confident the Internet company's business principles will "stand up to scrutiny."

Singhal said Google is more transparent than other search engines about the algorithms that determine a Web page's ranking in search results.

"We make hundreds of changes to our algorithms every year to improve your search experience," Singhal said. "Not every website can come out at the top of the page, or even appear on the first page of our search results."

He also emphasized that "using Google is a choice - and there are lots of other choices available to you for getting information.

"The competition is only one click away," he said.

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