Is Google hindering competition? A Senate subcommittee would like to know, and Google Executive Chairman Eric Schmidt is getting a chance to defend the search-engine giant's practices.
"We built searches for users, not websites, and no matter what we do, there will always be some websites unhappy with where they rank," Schmidt told members of a Senate Judiciary antitrust subcommittee in written remarks.
Schmidt has close ties with the Obama administration. Specifically, he is a member of the President's Council of Advisors on Science and Technology. But that isn't stopping Google competitors from charging that the company is favoring its own company over its competitors, and the company is the subject of an antitrust investigation by the Federal Trade Commission.
Google Competitors Rail
Indeed, Google's competitors are also speaking out in the Senate. Nextag, Yelp and Expedia are among those blasting Google for its alleged anti-competitive moves.
"We believe Google has acted anti-competitively in at least two key ways: by misusing Yelp review content in their competing Places product and by favoring their own competing Places product in search results," Yelp CEO Jeremy Stoppelman said, according to remarks he prepared for testimony.
But Schmidt contends consumers can choose any rival sites they want. In his testimony, he said, "If consumers don't like what one website is providing them, they can switch to another website with just one click."
Song and Dance
Schmidt is spinning a story about how Google is struggling to survive, and it seems unlikely the Senate subcommittee will buy it, said Rob Enderle, principal analyst at Enderle Group.
"Google is one of the most powerful companies in the world and it is led by newly minted billionaires including Schmidt," Enderle said. "Even trying to sell this concept to the U.S. Senate creates the impression he thinks they are idiots and I doubt that will end well."
The subcommittee has its own researchers and is surrounded by lobbyists from Google's competitors who will likely gleefully point out that Schmidt is effectively playing the Senate for fools, Enderle said.
"In the end, this approach will likely only cause Schmidt to lose credibility and assure a more negative outcome from the event," he said. "In short I don't think there is any chance they can sustain this argument, they are too powerful and rich."
So what happens if the Senate doesn't buy into Schmidt's testimony? Keep in mind that this is an election year. Google is one of the companies aligned with the current administration and, Enderle said, Google could become a way to embarrass the Obama administration.
"Google would appear to be playing into that strategy which would suggest that the Republicans will push for more aggressive moves by enforcement agencies and Democrats to distance themselves from the coming disaster," Enderle said.
Posted: 2011-09-23 @ 12:46pm PT
Sounds like these Senators smell Google's cash and are hoping to shake them down for some election time 'donations'.