Google. A brand so enormous, it’s a verb. We endlessly Google, but we never Yahoo or Bing. And many of us have never even heard of competing search engines like Gigablast, Yandex, or Qwant. This enormity is the problem—the massive Google has seemingly shouldered out most of the competition, leaving the remaining few to languish in the shadow of its greatness. Google’s rapid surge from startup to internet superpower has drawn the eye, and ire, of competitors and legislators alike.
Since its humble beginning in 1998, Google has grown exponentially through the application of superior and innovative technologies to become more than just a search engine. With the financial heft to divert substantial funding toward innovation, Google is always at the leading edge of new, exciting and helpful technological advances. In a show of savvy business sense, the company has eagerly bought up competitors and other successful companies to help spread its influence across the Web and the world. Some acquisitions are familiar, such as image sharing service Picasa, video sharing service YouTube, Web feed service FeedBurner, and mobile device manufacturer Motorola. Other additions to the Google family are not as mainstream, but they help provide Google with a full complement of technology from digital coupons and facial recognition to e-commerce, cloud computing, and more, although its core product remains search engine technology.
It is this search technology with its complicated algorithms that has caused national and international antitrust coalitions to take a dim view of some of the tech giant’s business practices. Over the past several years, Google has been accused numerous times of using its vast influence and market share to hinder competition.
So what exactly is Google’s share of the Web search market? comScore, an American internet analytics company, recently released its search engine rankings for September 2015, giving Google a 63.9 percent share of the market. Peter Theil, PayPal co-founder and author of Zero to One, a book that calls out Google as a monopoly, cites a similar percentage. But how accurate is this number? According to Priceonomics, Google’s share is much closer to 94 percent and is perhaps even higher if worldwide numbers are included. This discrepancy might be a reflection of the partnership between comScore and Google. The two have been coordinating on the creation of an audience metrics program, so it is possible that comScore has a vested interest in protecting their business ally from suggestions of dominance. It could also be a simple error of calculation although Google would probably draw even more unwanted interest by correcting it upward. Regardless, even 63.9 percent is an incredible share of a burgeoning market—one that amounted to more than $66 billion in profit for the company in 2014.
Despite its steadily increasing progress, Google tries to downplay its success whenever it can, and with good reason. In 2013, after several years of scrutiny, the Federal Trade Commission (FTC) launched an investigation into the business practices centered around Google’s alleged “search bias.” Search bias is the term for what complainants say occurs when Google exploits its search algorithms to promote its products over those of competitors.
The company disagreed vehemently with the allegations and sought to defend itself in the public eye as well as in the courtroom. To help sway public and regulatory opinion in their favor, Google helped put on several events at George Mason University’s Law and Economics Center in Washington, D.C. that purported to increase discussion about search competition on the internet. Attendees included FTC regulators, congressional staffers and federal and state prosecutors. Emails obtained by The Washington Post revealed Google’s behind-the-scenes involvement with organizing the conference and inviting attendees. The conference proved fruitful for Google: The technology and legal experts present supported Google’s position, arguing their points in front of regulators who would later determine that there was no hard evidence of wrongdoing in Google’s changes to their search algorithms.
Google also commissioned a paper by noted conservative judge and antitrust scholar, the late Robert Bork, with antitrust professor Gregory Sidak, to help bolster their position. Bork and Sidak wrote, “That consumers can switch to substitute search engines instantaneously and at zero cost constrains Google’s ability and incentive to act anti-competitively.”
In addition to their attempt at shaping public and media discourse on the subject of their search practices, Google continues to try to influence decision-makers through monetary donations to companies and individuals that will support them. In the first quarter of 2015, Google spent approximately $5.47 million lobbying a select group of legislators on subjects such as privacy and competition issues in online advertising, openness and innovation in online services and devices, and international internet governance.
This last point, international internet governance, is a hot topic for Google as Margrethe Vestager, the European Union’s (EU’s) competition commissioner, this year made a formal complaint against the company for using its dominance to bias Web searches. This complaint marks the first time Google has faced formal charges for anti-trust violations. As an initial response, Google defended its business practices in a blog post, stating: “While Google may be the most used search engine, people can now find and access information in numerous different ways—and allegations of harm, for consumers and competitors, have proved to be wide of the mark.” Vestager’s recent charge isn't Google’s first encounter with the EU—they’ve been under investigation since 2010 for anti-trust violations in the European market for promoting their products at the expense of their competition. The EU’s first three-year investigation of them ended in February 2015 with Google agreeing to “make concessions on how they display competitor’s links.”
Currently, the beleaguered giant also faces charges by Indian investigators who sent concerns regarding anticompetitive practices and search dominance to Google’s headquarters last week after a lengthy three-year investigation. They intend to pursue the matter formally, pending further fact-finding.
So, is Google dominance a reality or just a smoke-and-mirrors attempt by competitors and governmental agencies to slow down the company’s explosive growth? According to Investopedia, a monopoly is a single company or group that owns all or nearly all of the market for a given product or service. While Google isn’t the only company that provides search services, it does have the lion’s share of the market, giving it the ability to manipulate search results that can indeed hinder competition.
That, coupled with Google’s sometimes strong-armed tactics with competitors, makes it suspect. In the case of Yelp, a review service that has a strong following in the restaurant category, Google used its fiscal power to attempt to purchase the successful service outright. When Yelp turned down Google’s offer, the company responded first by buying competitor, Zagat, and then by “borrowing” Yelp results to support Google’s local search results content. They also created programs such as City Experts (recently replaced by Local Guides) to build a network of reviewers and experts that can serve local areas in much the same way as Yelp. In another move to swipe market share from local review competitors, their Local Carousel, a series of images and ratings that pops up during local information searches, is positioned to grab consumer attention and shift it away from organic search results in favor of the Google product.
Detractors have long pointed to Google’s ever-changing algorithms as a means of supporting the case that Google is manipulating search results on purpose and for its financial gain. Google may be doing this, but even if it is, these actions are protected under the auspices of free speech. Google has long argued that, just as an editor chooses which stories to print or not, and which to put on the front page, Google’s algorithms edit what the consumer sees. This type of editorial control is protected under the First Amendment, regardless of how the results are shown.
Even though Google grew its enormous market share fairly through exceptional service and cutting-edge technologies, it is still possible, and even easy, to access the internet without using its services. The open architecture of the internet gives consumers direct access to websites without using a search engine. Web browsers provide customizations that allow content to be accessed sans search engine, and mobile apps have proliferated as a new way of searching for needed content. If Google manipulates its algorithms to support its products, to the consumer it is not that different from watching a news channel that gives fuller coverage to stories that supports its political viewpoint, or a magazine that publishes advertisers with whom it has partnerships.
Regardless of how you view Google’s alleged dominance of the market and whether or not you agree with their supposed manipulation of search results, it is clear that there is a long way to go in defining the boundaries of online super companies. Their structure and essence are clearly a challenge to conventional thought about monopolies since current antitrust legislation is focused on businesses that developed during an industrial age rather than an informational one. Internet superpowers like Google, Amazon, PayPal and Facebook have an opportunity to rewrite the definition of fair competition for a global online community.
What is evident from the controversy surrounding Google’s practices is that there is significant confusion over what constitutes anticompetitive actions in the online world. Our current scramble to adjust to a post-industrial economy puts the cart before the horse by waiting for concerns to arise before addressing them. To rectify this, scholars, business people, legislators and consumers should unite to come to a mutually agreeable understanding of issues faced exclusively by online businesses. This understanding should encompass not only best business practices but also exhibit a sensitivity to the difference between competitiveness online versus in a brick-and-mortar world. A litmus test for anti-competitiveness constructed without a specific business in mind (e.g. Google) would be an excellent first step toward a protective antitrust policy geared toward the information age.
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