Texas Attorney General Investigates Google's Alleged Anti-Trust Activity
On September 3, Search Engine Land reported, and Google confirmed that the Texas Attorney
General, Greg Abbott, inquired about and is currently investigating potential anti-trust activity by Google. It was reported Greg Abbott's office declined to answer any questions, and now everyone is just speculating on what the outcome will be. Well, I'm no better.
This is not the first anti-trust inquiry Google has faced, and it likely won't be the last. According to Experian Hitwise, Google accounts for 71% of searches in the United States, and it's no surprise to anyone when you've got that kind of market share, you've got a lot of bulls-eyes on your back, as well as a lot of government officials making sure you don't go all anti-trusty on the rest of the market. Google has been in this position for sometime, and I'm sure I'm missing a few, but here are some of the Google antitrust highlights over the last few years:
- In April of 2007, Google purchased DoubleClick for 3.1 billion dollars and the FTC stepped in, but eventually approved the purchase, stating, "the companies are not direct competitor in any relevant antitrust market."
- In 2008, Google was looking at partnering up with Yahoo! in their highly publicized ad deal, however, Google eventually pulls out because of looming antitrust issues.
- In February 2009, Tradecomet.com filed an antitrust suit against Google, however, they were not to be the last.
- As time progressed, British price comparison site Foundem and myTriggers also become involved in US filings of anti-trust suits.
- In July 2010 it was reported, Foundem, French legal search engine ejustice.fr, and Microsoft service Ciao from Bing filed European anti-trust suits, eventually leading to ongoing EU Commission investigations.
- Most recently, a week ago there were reports of the Texas Attorney General anti-trust investigation.
There were other activities involving the FTC, but for purposes of brevity let's pretend I've included the most relevant instances. Since a majority of internet users search using Google, any company wanting to be found spends a lot of money utilizing the algorithms set out by the internet giant. Take a look at number of new companies providing SEO functions. When large expenditures are dedicated to this task and lost when the algorithm is altered, you can imagine the frustration and the likelihood of damages that could be involved. You've got angry companies who wonder why these changes had to happen. This is a valid concern, right?
On the flip side, doesn't Google need to update its algorithms? Understandably, Google has to change with the technology (new programing languages, bots, etc.) in order to provide the best search engine for it's users. It doesn't want to lose any of that 71%. However, if Google competitors begin to lose page rank status because of these changes questions begin to arise to the reasoning behind the changes.
According to Google's business model, "You can make money without being evil," and I have a tendency to believe them. It might be because of all the products I use, but they seem to do a great job of creating well thought out systems that help my productivity. If changes to the search engine are found to be anticompetitive because someone loses their page rank, is that a victory? Does the public benefit? Does holding back the smartest person in the class really help competition and the end-user?
On a similar note, factor in that several of these companies have ties to Microsoft, and you've got a mixed bag of issues. Microsoft owns Ciao (as mentioned above), and involved their lawyers with assistance in proper representation. Then in February of 2010, Microsoft General Counsel, Dave Heiner, voiced his opinions on the matter, discussing that it's not just Microsoft pointing fingers, but several companies and groups raise interesting questions regarding Google's potentially anticompetitive nature.
As I mentioned, I like to think Google isn't evil, but what if I and my fellow Googlers are wrong? What if the reverse is true and Google alters algorithms when another search company starts to gain market share? It will be interesting to see how these investigations progress and what kind of case will develop. Without addressing the validity of anti-trust laws, it's a touchy area when determining whether changes in the Google algorithms had a basis in creating a better search engine or were used a vehicle to keep any competitors out of the market. What were the motives of any changes? Were there "better" results for the searching capabilities of Google? Who decides what those "better" capabilities should be?
As a final note, back in March of last year, Eric Clemons, wrote a guest piece for TechCrunch and gave his opinion of "What an anti-trust suit against Google would look like." The article provides great insight on the basics of how these lawsuits work and is a good read if you want to see how this suit might potentially proceed.
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