The power of Google to determine what information we see, and when, is enormous. Apparently, the U.S. government is worried Google has abused that power.
The Federal Trade Commission is on the verge of opening a formal civil investigation to see if Google has stifled competition on the Web. The FTC has been unofficially watching Google’s business practices for months. So far, it seems, the anti-trust watchdog doesn’t like what it sees. The Wall Street Journal says the FTC is about to issue subpoenas to Google to get more information. It has also talked to a number of Google’s competitors, who I am sure will be more than willing to demonstrate why the search giant is too powerful.
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It is only the latest probe into Google’s practices. Back in December, TIME.com’s own Techland covered the growing claims by competitors that Google’s search results favored the company’s content over others. The European Union has its own team of investigators looking into anti-trust violations. And a U.S. Senate subcommittee is drawing up plans for a hearing. The subcommittee chairman is considering hauling CEO Larry Page and chairman Eric Schmidt to Washington for a Wall Street–like grilling.
It is clear that Google has a tight hold on the Internet. And that has been clearer than ever in the past year. The New York Times has run a number of stories showing how companies have been able to boost their sales by gaming Google’s search algorithms. When Google changed its algorithm, those sites fell off the search page, basically hiding them from the world. The stories also showed what lengths companies will go not to cross Google — and what they will do to try to make up. If that’s not a sign of monopoly, I don’t know what is. And that’s just the search side of the business. Google’s power on the advertising side is even more troublesome. If you are a small company and Google won’t take your advertisement, you basically can’t market your wares on the Web, at least not to any sizable audience.
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That being said, if the government does end up suing Google, it won’t be an easy case. Monopolies, surprisingly, are allowed in American business. They are just not allowed when they use their power to hurt competitors. That might be a hard case to prove. Can you name another business Google has come to dominate like search and advertising? It’s doing well in smart phones with the Android, but I’m not sure you can connect that success to its search engine. The Google phone was a flop. Perhaps Gmail, maybe. Another question: Is Google too big to fail? The government would probably weigh the impact on Web business and the economy in general if Google were to be broken up. Still, anti-trust investigations can be taxing on companies. Even if it isn’t charged, Google will have to carefully evaluate all its moves in the next year or so to make sure there is nothing that it’s doing that seems anti-competitive. That means not entering some businesses that Google normally would, or at least not charging as hard into them. The Web is changing all the time, and anti-trust investigations take years. Google is sure to fall behind. Microsoft has never been the same since the government put it in its crosshairs. And IBM took years to recover and basically had to become a totally different company in order to survive. Google may have to change as well.
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