Washington

Eric Schmidt to Congress: Google Not Dominant in Search

Says it does not have any characteristics he would associate with market power 11/04/2011 05:19:28 PM Eastern

Google Executive Chairman Eric Schmidt says Google is not dominant in search, arguing that its competitors are not just general search engines -- Bing, Yahoo! -- but specialized search engines, social networks and mobile apps.
 
"Inferring that Google is in any way 'dominant' would be incorrect," he told Sen. Richard Blumenthal (D-Conn.) in a written response, following up on questions stemming from his appearance before the Senate Judiciary Committee Sept. 21.
 
According to a copy of that response, he also seemed to step back from his characterization of Google at the hearing, when he told the senators that he understood the company was "in the area" of legal definitions of monopoly. "Google has none of the characteristics that I associate with market power," he wrote. But, as he did at the hearing, he again suggested in the letter that that was an issue for a court to decide.
 
Blumenthal had asked one of the $64,000 questions: Does Google favor its own content in search, which is a key antitrust concern about the company. Schmidt said the question of whether it favored its content was based on an inaccurate premise. Its search results are its service, "not some separate 'Google content' that can be 'favored.'"
 
But he did say that when it came to so-called "oneboxes," which appear for queries that Google is "highly confident that the user wants a specific answer" -- weather, directions, stock quotes  -- it was accurate for Google exec Marissa Mayer to say that Google puts it Google Maps, or Google Finance first. "[I]t is my understanding that she was referring to the placement of links within a onebox (but not the ranking of other thematic results within search results), and her description was accurate," he said of Mayer's quote.
 
Schmidt also said Google spent $60 million last year to prevent violations of its policy that ads not be placed in sites engaged in piracy and counterfeiting. In a response to Sen. Al Franken (D-Wis.), he added that Google last year shut down 95,000 accounts "for attempting to use sponsored links to advertise counterfeit goods," more than 95% of which he said Google had discovered on its own. He said action was taken against almost 12,000 sites for violating the policy against infringing content.
 
"Our policies prohibit the use of our AdSense and AdMob programs on web pages (AdSense) or apps (AdMob) that include infringing materials or seek to sell counterfeit goods." But he also said complaints about ads being used to monetize infringing content represent "far less" than 1% of Ad Sense partner sites, though he did not say how many of those there were.
 
He suggested that those who are pirating content are a tricky bunch. "Despite the best efforts of the online advertising industry, technologically sophisticated players use tactics like "cloaking" (showing one version of their site to users and a different version to Google) to evade the protections that Google and other companies put in place," he told the Senator. "While the industry is aggressively going after those who abuse online advertising programs, it is clearly a cat-and-mouse game and efforts to legislate in this area must be careful not to target ad platforms for abuses of their systems that could not reasonably be prevented."
 
The current legislative efforts include a bill, the Protect IP Act, which originated in the Judiciary Committee, and the Stop Online Piracy Act in the House. Google has problems with both bills, though he said in his response to the senator that he supported the Protect IP Act's goal of targeting foreign ''rogue' websites that are dedicated to copyright infringement or counterfeiting."
 
"In his answers today, [Eric] Schmidt repeatedly denies the premise of Senators' questions about Google's policy of favoring its own services over all other sites," said Fairsearch.org in a statement.

Fairsearch includes search competitor Microsoft (which Blumenthal pointed out in his questions provides the underlying software to both Bing and Yahoo!), Kayak, Travelocity, Hotwire, Expedia, and others. "Schmidt even backtracks from his testimony at the hearing that Google is 'in the area' of monopoly power," it said. "His evasiveness stands in contrast to his acknowledgement at the hearing of a "great responsibility" that comes with Google's power...Schmidt's non-responsive reply to the Subcommittee is evidence that those investigating Google must 'search on' for real answers to the serious questions about how Google uses its monopoly power in the market."

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