Google’s Misuse Of Market Dominance, Monopoly: Is Obama Administration …

23 Mar 2015 | Author: | No comments yet »

FTC report sheds light on Google’s dirty laundry.

A previously undisclosed report by staffers at the Federal Trade Commission reveals new details about how Google manipulated search results to favour its own services over rivals’, even when they weren’t most relevant for users.

In the late nineties, even before Google’s executives publicly pledged not to be evil, they were positioning their company’s search engine as a meritocratic alternative to the main options at the time. Other search tools based their results on factors like how often a searched-for term appeared on a Web page, but Google went beyond this, ranking pages based on their importance. Google executives have long argued their responsibility is to provide relevant search results, not promote websites, and if users don’t like those results there are other search engines “just a click away”. The company’s engineers prided themselves on developing algorithms that, when presented with a search term, provided a person with the most useful results; advertisements were also more clearly marked on results pages than on other search sites. “Google users trust our systems to help them with important decisions: medical, financial and many others,” Google’s co-founders wrote in a letter to investors when the company went public, in 2004. “Our search results are the best we know how to produce.

For example, the FTC staff noted that Google presented results from its flight-search tool ahead of other travel sites, even though Google offered fewer flight options. Following the FTC’s decision, Google’s rivals turned their attention to Europe, where officials have been investigating similar complaints against Google for five years and have rejected three Google settlement proposals.

They are unbiased and objective, and we do not accept payment for them or for inclusion or more frequent updating.” Since then, our dependence on Google has deepened. Google’s shopping results were ranked above rival comparison-shopping engines, even though users didn’t click on them at the same rate, the staff found.

Regulators in Argentina, Brazil, Canada, Taiwan and India are also investigating Google’s business practices, according to the company’s annual financial filing. All the while, people have continued to expect Google’s search engine to operate on strictly meritocratic principles, with the best results rising to the top. Just this month, it launched a search tool for car-insurance quotes, which competes with similar tools offered by Allstate Corp.’s Esurance, among others. The company was also accused of other misbehavior, including scraping material, such as product ratings, from rivals, including Yelp, TripAdvisor, and Amazon, and using it to improve its own search results. Local-listings site Yelp Inc., for example, complained publicly during the FTC’s investigation that Google copied its reviews to give its own local listings more heft.

A newly revealed document appears to help shed light on the extent to which the assertion that Google’s behavior didn’t constitute an antitrust violation because it didn’t hurt consumers was on the minds of the F.T.C. commissioners when, in 2013, they dropped their investigation. Through a Freedom of Information Act request, the Wall Street Journal viewed parts of a staff memo, issued in 2012 by the commission’s bureau of competition, which focusses on the legal context of alleged violations in order to determine their impact on competition and consumers. When it came to the most high-profile aspect of the investigation, whether Google illegally favored its own sites over competitors’ offerings, the memo found that, although Google’s behavior had hurt rivals, it didn’t justify a lawsuit.

Beth Wilkinson, an outside counsel to the F.T.C., said in a press release in 2013, when the commission announced that it wouldn’t file suit, “Undoubtedly, Google took aggressive actions to gain advantage over rival search providers. The evidence did not demonstrate that Google’s actions in this area stifled competition in violation of U.S. law.” As part of a deal with the F.T.C., Google agreed to stop some practices that had troubled commissioners. The F.T.C.’s focus on consumers follows a huge shift in American culture in the twentieth century—one that deeply influenced public policy on matters of corporate power. In the early nineteen-hundreds, Louis Brandeis, who would later be appointed to the Supreme Court, helped push for federal laws to reduce the power of big corporations. But, over the course of the century, as manufacturing declined and consumer culture rose, the supplier came to be replaced by the consumer as the figure most in need of protection under antitrust law.

European interpretations of antitrust law are somewhat different from those in the U.S.; Europeans are concerned with consumers, but also, to a greater degree than in the U.S., with competitors. Such lobbying, coupled with the knowledge that the F.T.C.’s own staff members found Google’s practices to be anti-competitive, could well influence European policymakers in their investigation of the company.

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