Google CEO Testifies Before Senate Antitrust Committee

Charges of Possible Monopoly Recall Past Case Against Microsoft

by Lee Avery on September 23, 2011

Google has become perhaps the most powerful company on the Internet. With the recent acquisition of tech companies in mobile communication and hardware development, the company is reaching beyond the online world. This incredible growth has led Congress to question the fairness of the company’s business practices. On September 21^st, Google chairman Eric Schmidt testified before the Senate antitrust committee to try and avoid and charges.

Despite stock prices and recent news to the contrary, Schmidt presented a view of Google as a company doing its best to survive in a competitive market. According to comScore, which measures traffic volume, Google controls two-thirds of the online search market, hardly an underdog platform.

This market dominance has raised constant comparisons with Microsoft, to which Schmidt replied, “In the years since [the Microsoft antitrust trials], many of us in Silicon Valley have absorbed the lessons of that era. We get the lessons of our corporate predecessors. But I ask you to remember that not all companies are cut from the same cloth, and that one company’s past need not be another’s future.”

At issue in the trial is not necessarily whether or not Google has a monopoly on the industry, but if it is misusing its power as the dominant market leader.

One way in which Google may be doing this is by giving its own products, like Youtube, preferential treatment in search results. The difference in traffic to sites ranked number one and number two for a particular search term can be hundreds of thousands of dollars.

An algorithm developed by Google determines how sites are ranked on the site. The rub is the fact that Google does not make it publicly known how what criteria, exactly, the algorithm uses to determine rankings. Google is the only company able to specifically cater, or “cook,” its products to search well.

“This conduct has the potential to substantially harm competition for commerce on the Internet, and retard innovation by companies that fear the market power of Google,” said Democratic Senator Herb Kohl of Wisconsin during the hearing.

That sentiment found support across the aisle as well from Senator Mike Lee, a Utah Republican. “Google is in a position,” he said, “to help determine who will succeed and who will fail on the Internet.”

Schmidt defended his company to this, saying, “I want to assure you that we haven’t cooked anything. I have sympathy for the websites that go down [in search result rank]. When we make a change there are ancillary or unintended consequences. But we’re in a business of ranking, and it’s important to know when one goes down another goes up.”

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