In May 2009 an internal Google presentation was leaked and published the web by Consumerwatchdog.org. No smoking gun indictment - what stands out in the presentation is a line “competition is just one click away”, which has now become a Google’s corporate mantra; out there to ward off complains by its detractors that despite consistently attracting around 70% of web users, Google is not monopolizing the online environment.
I’m sitting on the sidelines for that argument. However it is the keyword advertisers and other commercial services that may have issues with Google that are now starting to be recognised.
First a personal disclose may be appropriate - for legal research of the Web I prefer the Google search engine with SSL + Firefox, because of the Firefox add-ons and extensions make makes it a smooth and rewarding experience (but what happened to the Google ‘search within results’ button?); Google Scholar also add value to legal research; Chrome has an interface that I find has its uses to organise favourite sites; and I did upgrade to Internet Explorer 9 – needed to access optimise accessing Windows Exchange servers.
Siva Vaidhyanathan may title his new book, ‘The Googlization of Everything' (2011), but I’m with Nancy Reagan about addictions with technology - I “just say no". From where I sit as a consumer of search services, if I found a better search engine, I would be off with a click.
Google’s share of the web searching by U.S. web users is reported by Search Engine Land as being in the range of 65-70% during 2010; although commentators suggest that Google’s share of the web searching is flat-lining with the balance of the web searching carried out through other search engines.[1] The other important metric of Google’s performance is the share of the spending on search engine marketing by U.S. advertisers in which Search Engine Land reports Efficient Frontier search marketing as determining that Google achieved a market share of 79% in the 4th quarter of 2010 with 21% being share by the Yahoo and Bing search engines.[2] However Search Engine Watch comments that search engine advertising is only part of the total on-line advertising spending spread across the channels of search, display and social media advertising, with the social networking website Facebook attracting significant advertising revenue.[3]
Vaidhyanathan views Google mantra “competition is just one click away” as presenting a “myth that Internet companies are weightless and virtual”,[4] rather than the reality that Google is a firm that operates through vast data networks and computer servers that can rely upon ‘network effects’ as the invisible glue that keeps users attached to the Google search engine. Vaidhyanathan argues that the network effects have the effect that “[o]pting out or switching away from Google services degrades one's ability to use the Web.” It depends on whose perspective you take; the loyalty of web users to a search engine lasts until a better one comes along. However for the keyword advertisers, Google is the only game in town – its detractors say that is the way Google wants to keep it.
Since 2010 the European Commission has been investigating both the operation of the AdSense technology and also how Google markets the AdWords service to advertisers.[5] As well, the Commission is investigating complaints from vertical search service firms that identify changes to Google’s algorithms as reducing Web traffic to the search related businesses of those firms.[6] The Commission’s investigation extends to whether Google’s technology discriminates against how vertical search engines are placed in searches using Google’s search engine by asking firms whether Google has taken traffic away from competing services or lowered the visibility of rival services.[7]
A further complaint of vertical search engines firms is reported by Out-Law.com as relating to the ‘bundling’ of the AdSense technology with the Google search engine is anti-competitive as vertical search engines are forced to use the Google search engine technology if vertical search service firms want to access the revenue that can be generated through the AdSense technology.[8]
In 2011 Microsoft has taken the step of filing a complaint with the European Commission. Brad Smith, Microsoft SVP & general counsel, describes the Google mantra that consumers are free to choose to go to other search engines as being a superficial view that ignores how Google acts to prevent search services of the competitors of achieving the quality of information and advertising support provided by Google. It is claimed by Microsoft that by hindering effective competition access to quality information and advertising support the search engines of competitors is less attractive to web users. An aspect of the Microsoft’s 2011 complain to the Commission identifies the contractual restrictions imposed by Google on advertisers that are alleged to have an anti-competitive effect in that advertisers are discouraged from running ad campaigns with competing suppliers of keyword advertising services.[9]
There are competition scholars like Geoffrey Manne & Joshua Wright (2011) who deconstruct what they described as the superficial view that Google dominates either the search advertising provider market or the online search market; as when the advertising market is considered there are available choices for advertisers including whether online and traditional offline advertising are economically-relevant substitutes.[10]
Commentators like Fred Vogelstein[11] and Farhad Manjoo[12] question whether Google is an appropriate target for scrutiny by competition regulators that investigate Google’s expansion into new markets and new online services. In 2009 The New York Times reported that Christine A. Varney, head of the Justice Department’s antitrust division, said the touchstone of antitrust policy under the Obama Administration should be “the protection of consumer welfare”.[13] The New York Times commented that by the standard described by Varney, “Google seems an elusive target for antitrust enforcers, since most of its services are free. And in the new markets it is entering, including cellphone software and online alternatives to desktop programs, Google is an insurgent going up against large, well-heeled rivals, notably Microsoft.” Again, it depends on whose perspective you take, users of these new Google products have plenty of choices. However for e-commerce and the keyword advertisers, size does matter and Google is the only game in town.
Microsoft has been slammed down by the European Commission over the release of interoperable information in the work-server market and (more controversially) over tying the Windows Media Player and the Internet Explorer browser into the operating system. It seems Microsoft has decided if you can’t beat the European Commission – just get the Commission to game-on the competition. Some may see a situational irony in Microsoft’s action – Brad Smith saw that coming.
The Microsoft litigation in Europe shows that European competition law may produce a different result as compared to the U.S. or Australia. There is continuing argument as to whether regulatory action against innovative firms makes economic sense or is good competition policy. The European Commission may reject the complaints or take a view there is a case to be answered – later in 2011 we should have an understanding of whether Goggle has a problem in Europe and if so, what effect that will have of Google’s operations in Australia.
[1] M. McGee, Google’s Search Share Down For 4th Straight Month: Hitwise (7 April 2010) Search Engine Land <http://searchengineland.com/google-search-share-down-4th-straight-month-hitwise-39584> at 25 January 2011. Reporting the percentage of search share across a sample of 10 million U.S. Internet users in February 2010: Google 70.95%; Yahoo 14.57%; Bing 9.70%; Ask 2.84%; and March 2010: Google 69.97%; Yahoo 15.04%; Bing 9.62%; Ask 3.44%. See also J. Yarow, Google's Search Share Flatlines (16 September 2010) Business Insider <http://www.businessinsider.com/google-search-share> at 25 January 2011.
[2] The research provided by Efficient Frontier search marketing, as reported by P. Parker, Research: Optimism Fueled SEM Growth in Q4, But ROI Lagged (18 January 2011) Search Engine Land <http://searchengineland.com/research-optimism-fueled-sem-growth-in-q4-but-roi-lagged-61482> at 25 January 2011.
[3] C. MacDonald, 2011: The Year of Facebook (30 December 2010) <http://searchenginewatch.com/3641660> at 27 January 2011.
[4] S. Vaidhyanathan, 'Render unto Caesar: How Google Came to Rule the Web', The Googlization of Everything: How one company is disrupting commerce, culture, and community (2011) Chapter 1.
[5] Epicenter Staff, Google Hit With Antitrust Complaints in Europe (24 February 2010) Wired.com <http://www.wired.com/epicenter/2010/02/three-antitrust-complaints-lodged-against-google-in-europe/> at 25 February 2010.
[6] British price comparison site Foundem, French legal search engine eJustice.fr and Microsoft-owned Ciao from Bing are the complainants. European Commission, MEMO/10/47: Statement on press reports on complaints against Google (24 January 2010) <http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/10/47&format=HTML&aged=0&language=EN&guiLanguage=enhttp://europa.eu/rapid/setlanguage.do?language=en>.
[7] J. Kanter, Europe Inquiry Focuses on Google Business Practice (13 Janaury 2010) New York Times <https://www.nytimes.com/2011/01/14/technology/14google.html?_r=1> at 1 March 2011.
[8] OUT-LAW News, Google rival makes new complaint to EU authorities (24 February 2011) <http://www.out-law.com/page-11795> at 25 February 2011.
[9] B. Smith, 30 March 2011 (21:00) (Adding our Voice to Concerns about Search in Europe), Microsoft Corp. SVP & General Counsel, <http://blogs.technet.com/b/microsoft_on_the_issues/archive/2011/03/30/adding-our-voice-to-concerns-about-search-in-europe.aspx> at 1 April 2011.
[10] GA. Manne and JD. Wright, 'Google and the Limits of Antitrust: The Case Against the Case Against Google' (2011) 34 Harvard J. Law & Public Policy.
[11] F. Vogelstein, Why Is Obama's Top Antitrust Cop Gunning for Google? (20 July 2009) Wired.com <http://www.wired.com/techbiz/it/magazine/17-08/mf_googlopoly?currentPage=all> at 21 July 2009.
[12] F. Manjoo, The Case Against the Case Against Google - The Department of Justice should take a hint from the Microsoft suit: no more antitrust actions against tech companies (28 July 2009) Slate.com <http://www.slate.com/id/2223755/pagenum/all/#p2> at 28 July 2009.
[13] S. Lohr and M. Helft, New Mood in Antitrust May Target Google (17 May 2009) New York Times <http://www.nytimes.com/2009/05/18/technology/companies/18antitrust.html?_r=1&ref=business> at 21 October 2009.
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