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Google This: The Question Lawmakers Should be Asking, But Won't

The Real Challenge Is Our Current Definition of 'Monopoly Power'

By Published on . 2

Searching and finding is the foundation of a well-organized Internet and that activity is in jeopardy. Privacy isn't the issue; competition is . Google's stranglehold on the universe of otherwise free information isn't illegal. "Don't be evil" is great marketing and a tremendous ideal but human nature and the demands of running a public company preclude adhering to the letter or the sentiment of the slogan.

Since Google received its subpoena from the Federal Trade Commission in June, much has been said about the upcoming face-off with the federal government. The US investigation asks the question, does Google abuse its power to limit competition?

Last week's Senate hearings provided more entertainment than a good Jon Stewart rant. "The Power of Google: Serving Consumers or Threatening Competition," was an assembly of suit-and-tie-clad policy makers who took to the podia to get to the bottom of whether Google's practices are unlawful in that the search giant's practices stifle competition, make unfair policies about who gets to play in the Google sand box , who pays whom for what and, basically, if Google is being a big bully.

They all read statements, asked a bunch of questions, apologized for running out of time, and got…well…nowhere.

In the United States (unlike the European Union) simply having a monopoly is not illegal. But using that monopoly to limit competition is what will get you in trouble. On the other side of the Atlantic, where monopolies are dealt with a bit more harshly, Google controls well in excess of 90% of the search market.

Asking questions is easy. Asking questions and getting an actual answer is a bit more complicated. I'm convinced that Google has the best public relations and marketing communications people in the world. It's not a secret to anyone that former CEO Eric Schmidt went going it alone last week because he has the best public persona of the top three men. Virtually every Googler is extremely well trained in the art of managing an interview. Watch as Schmidt goose steps past questions of privacy and public dominance on ABC. Go ahead, take 3 minutes.

Every critical question is parried in favor of a "what the people want" and "in the best interest of people" answer. This is great public relations, lovely marketing but it's also a refusal to engage in the real issues that Google's dominance presents. Last week's hearings saw the same evasive behavior. When a senator asked a question, Google sidestepped or rephrased.

Guess how Schmidt answered questions at last week's hearings? While Chuck Schumer embarrassed his state and himself by taking his time to tout New York's tech prowess in lieu of asking any questions, Senators Franken and Lee asked questions and pushed to get answers until their time expired.

There's no question that Google has made the Internet better. It is also technically true that most of what Google offers is free to consumers. Yet while there may not be a cash transaction between user and service provider but there is an exchange. Few users of Google's "free" services truly understand their habits, activities and directive behaviors are being monitored, cataloged and literally sold to the highest bidder.

Google's answer to any question relating to Google using its influence to reduce competition is the same; the people decide what with they want with their online behavior. That's not entirely true if "the people's" choices are limited by Google, is it?

The real challenge for our governing bodies is the current definition of "monopoly power." Google and its counsel argue that "it's free and instantaneous to change." Tell me, what choices do we have? And, while Google influences choice and is in fact a destination, what choices can we have in the future? You can't argue that Google has changed everything while defending an outdated definition of monopoly.

Senator Kohl asked a very direct question about whether Google feels it has the right to favor its own properties. Google's counsel Susan Creighton successfully avoided the question by rephrasing and asking herself a different question.

Yes, people do want answers and it would be nice to get an actual answer as opposed to being constantly fed the "what people want" Google pablum.

Google launches a social network and every publisher has to participate or else. At least, that 's how a recent editorial on Forbes read before the article was removed. A month later, all I could find were a few Twitter mentions of the story and a copy in Blekko's cache.

I don't know why Forbes removed the story, it seemed to me that it was one writer's interpretation of what sitting in on a Google sales meeting is like—do what Google wants or else.

Changes in the algorithm is another nice benefit of absolute power. Advertisers are constantly being "caught" gaming the search system. Did I say advertisers? I meant brands, or site owners. Only the advertisers get advance notice when their sites are penalized. This year, losers included Forbes and top advertisers like JC Penney, Overstock.Com.

Speaking of losers, Overstock was penalized around February 22 , 2011. On April 8th, it announced that 5% of revenue was impacted. It's hard to calculate exactly how much a search traffic loss will cost in instances like Yelp, for example, but with Overstock the data was made public. A 5% revenue loss in the penalty period from February 22nd to April 8th nets out at about a $6.8 million loss.

Somebody has to make up those lost dollars. Thankfully, one can easily buy a bunch of Google ads to fill the gap.

This is not the first time I have expressed concerns over Google's involvement in government. Others have voiced their concerns about Google's behavior as well.

With all this talk about trusts, the main trust of focus should be the public one Google has created in its editorial search technology. A public good should have oversight by those who know how it works and have no specific bias.

Coincidentally, Senator Franken asked if an oversight policy similar to the one I suggested in January would be feasible. Creighton's response was a predictable "no" as any oversight would be too slow. Then Franken ran out of time. I would have appreciated at least one follow up question; which do you think would be slower, an independent oversight group or the US government?

ABOUT THE AUTHOR
Kevin Ryan is CEO of the strategic consulting and project management firm Motivity Marketing. He tweets at @KevinMRyan.
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