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Google Accused of "Cooking" Search Results and Charging MSFT Too Much
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.
Where the competition will do literally anything, including tipping the ears of politicians with insanely expensive lobbyist to run you through the mud.
I don't know or care if these accusations about Google are true.
I think the more important question is why should the government care about how Google is running their search results. They are the dominant search engine, but there are other competitors in this space and other alternatives.
Yet another example of government pushing its nose into something it doesn't understand in the name of the public good.
Several reasons.
If it results in false advertising, there can be a false advertising claim under the Lanham Act by a competitor or the FTC. unlikely in this kind of case, but Google has been investigated in the past for making money off of that kind of thing, and the same agency is doing the investigation here.
In addition, there's antitrust law. Merely having other competitors in the space doesn't mean that a company isn't violating antitrust law. The concern of antitrust law is protecting against anticompetitive use of a firm's market power in a way which reduces competition--in simple terms, doing this takes away from the total benefit that society obtains from the marketplace, because it results in the firm with market power artificially raising prices, meaning that the company demands more and produces less while people pay more for products the company would have been willing to produce for less had it not manipulated the marketplace--effectively, people lose the benefit that reflects the difference between the old price and the new price, and fewer people buy because it costs more, and the company doesn't gain as much as the consumers lose. So it's generally a net loss when a firm abuses market power.
Antitrust law doesn't always protect against monopolies, because it doesn't prevent people from using economies of scale or integrating their supply chain. It does, however, sometimes result in regulation even in markets that are or seem to be oligopolies.
-- IANAL, this isn't legal advice, and definitely isn't legal advice for you. Also, Squee!
He failed to explain why Google results always came 3rd on product comparisons though.
The entire interview can be watched here .
Friendly reminder:
Google's services aren't free. Gmail, Google Docs, Picasa, all the other "services" you're referring to aren't their services. Google sells advertising.
That is neither relevant nor interesting. A more interesting question is whether the bias is deliberate and targeted or not.
Here's a target practice analogy: When you shoot darts at a target, you won't get all darts in the bullseye. You might even find that your darts land more often in the lower half of the board. That's bias, and it's not deliberate.
Now suppose that a champion throws some darts, and his darts all land in the upper left corner of the board. That's bias too, but it's clearly deliberate and targeted. If moreover there's money riding on the game, and the champion was expected to win, then there's a case for cheating.
In both cases, it's completely impossible to not have bias, ie to hit the bullseye every single time always.
Google was accused of cheating a client today.
Those bastards!
The client in question was none other than Microsoft.
Those magnificent bastards!