Monday, September 19, 2011

Google chairman to testify before US Senate antitrust panel!

Google's slogan may be don't be evil, but a growing chorus of antitrust regulators in the United States and Europe wants to know if the company has lived up to that creed.

This week, those concerns - especially whether Google gives its own businesses preferred placement in search results, thwarting competition and harming consumers - will have their most public airing to date, when Google's chairman, Eric E Schmidt, testifies before a Senate antitrust panel. Some of Google's competitors will also testify.

The Senate proceeding is just one of an array of inquiries into Google's behavior by various federal and state authorities in this country, as well as by regulators in Europe and Asia. And though the company and the times are different, there are echoes of a hearing before the same Senate body, the Judiciary antitrust subcommittee, 13 years ago and the last sweeping antitrust investigation of an American technology powerhouse, Microsoft. Later, the federal government, joined by 20 states, filed suit against Microsoft.

"Google is a great American success story, but its size, position and power in the marketplace have raised concerns about its business practices, and raised the question of what responsibilities come with that power," said Sen. Richard Blumenthal, D-Conn, who is a member of the antitrust subcommittee and who as attorney general of Connecticut played a leading role among the states that sued Microsoft.

Today Google, like Microsoft then, is both admired and feared. Google has used the riches from its dominance in search and search advertising to expand into video distribution with YouTube, smartphone software with Android, and Web browsers with Chrome. It has added online commerce offerings in local retail and restaurants, comparison shopping and travel, and has folded them into its search engine, prompting complaints that Google is giving its businesses preferred placement in its search results.

Google executives have consistently replied that its search results are the product of extensive user testing, and do not favor its own offerings. If users become dissatisfied with Google search results, the company argues, they will go elsewhere, to rival search engines like Microsoft's Bing, sites that focus on specific products or services like Yelp, or social networks like Facebook.

"Using Google is a choice," Amit Singhal, a senior engineering manager at Google, wrote on the company's blog in June, after the Federal Trade Commission began its investigation. "And there are lots of other choices available to you for getting information."

Competitors disagree. Yelp, the popular website for user reviews and recommendations for restaurants and other businesses, has noticed a difference in search rankings since Google established its own online businesses, said Jeremy Stoppelman, co-founder and chief executive of Yelp, which gets half its traffic from Google searches.

Two years ago, Google offered to buy Yelp, but the talks broke down. Last year, Google introduced Places, a Yelp-like service for listing businesses and collecting consumer reviews. A Google search for a restaurant typically displays the Places entry - linked to a map, user-generated reviews and other services - ahead of Yelp, Stoppelman said.

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