Google Accused of "Cooking" Search Results and Charging MSFT Too Much 285
A reader writes "Google is being scrutinized by the Senate Antitrust Subcommittee for supposedly 'cooking' their search results. In an independent study comparing search results for products, Google Shopping consistently ranked 3rd. Eric Scmidt denied these accusations at a Senate hearing Wednesday." On top of all that, Microsoft is alleging that Google overcharges them as much as fifty-fold for advertising prices as compared to other buyers.
This is the Government's Business because .. (Score:4, Interesting)
"Microsoft's chief Washington lobbyist has been convening regular meetings attended by the company's outside consultants that have become known by some beltway insiders as "screw Google" meetings
Microsoft is trying to harm Google in the regulatory, legal, and litigation arenas because they're having problems with Google in the competitive marketplace." link [dailyfinance.com]
Schmidt before Congress. (Score:4, Interesting)
I watched the whole committee session. Schmidt did reasonably well. Susan Creighton, a lawyer from Wilson Sonsini speaking for Google, not so much.
The chart showing Google Shopping almost always in the #3 position in organic results was interesting, and weird. I look forward to seeing more details on that in the SEO blogs.
Schmidt had a painful time replying to questions about Google's active encouragement of offshore pharmacy ads. [projo.com] He refused to say much. Part of the plea deal is that Google can't deny in public statements what they admitted in writing in their plea bargain. (If they do, the plea bargain is off and DOJ takes them to court on criminal charges.) So Schmidt can't claim Google did nothing wrong. He could have been more apologetic, though.
Susan Creighton had a rough time. Google pays Apple $100 million a year or so to be the default search engine on the iPhone. She was asked about that, and tried hard to evade answering the question, which was put to her several times before a grudging admission that Google paid Apple for that. That's a real antitrust issue - buying your way into a new market when you're #1 in a related market doesn't go over well.
Re:Why Is It The Government's Business?? (Score:3, Interesting)
Are you familiar with the antitrust laws in this country? The laws don't include any details. This is pretty much the entirety of the statute prohibiting monopolies:
"Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony [and listing penalties]" (Sherman Act Section 2)
In other words, 'monopolies bad, you federal courts sort out what that means' -- and that's the way it has been ever since. There is a whole body of cases interpreting what that means. Congress has had nothing to do with it for something like a hundred years, through cases far more serious than whatever Google is accused of. What makes you think Congress is going to do anything different in this case, other than possibly the result of being induced by Microsoft campaign contributions?
Re:Why Is It The Government's Business?? (Score:1, Interesting)
Antitrust laws should not exist, but that's a larger discussion of why government shouldn't be allowed in business and money in the first place.
If a company has enough scale to undercut its competition, the government is then protecting the competition, it's not protecting the consumer with anti-trust laws, because the government then protects consumers from lower prices.
Government wants to protect business based on its relationship with a given business, but consumers would be better served by economies of scale if those economies produce lower prices.
IF a company does NOT provide low enough prices that there is no way to make money by producing a similar/same product and sell it cheaper or make it better quality, then there will be a competitor in that space.
Anti-trust laws are about protecting businesses, but not about protecting consumers. Consumers are better served with lower prices, not with large number of so called 'competitors', each of which provides the same freaking price/quality ratio.