Tuesday, September 27, 2011

Senators Question Whether Google Channels Searchers to Its Secondary Internet Businesses

This posting was written by Jeffrey May, Editor of CCH Trade Regulation Reporter.

Lawmakers expressed concern about Google’s decision to expand into secondary Internet businesses and addressed charges that the Google search engine channels customers to its own businesses, during a September 21 hearing by the Senate Judiciary’s Subcommittee on Antitrust, Competition Policy and Consumer Rights.

The hearing was held to consider the competitive impact of the conduct of Google, which has been criticized for allegedly manipulating search results for its own benefit. The Federal Trade Commission is currently investigating Google’s business practices.

“Our inquiry centers on whether Google biases [Internet search] results in its favor, as its critics charge, or whether Google simply does its best to present results in a manner which best serves consumers, as it claims,” said Subcommittee Chairman Herb Kohl (D, Wis.)

“[A]s the dominant firm in Internet search, Google has special obligations under antitrust law to not deploy its market power to squelch competition,” Senator Kohl added.

"Cooperating with FTC's Investigation"

Eric Schmidt, Executive Chairman of Google Inc., defended the company from suggestions that it was hindering competition. Schmidt said that Google was “fully cooperating with the FTC’s investigation” and noted that “every decided antitrust suit that has been brought against Google regarding our search results has been dismissed.

In a statement issued following the hearing, Senator Mike Lee (R, Utah) said that he was “disappointed” by Schmidt’s testimony.

“I had hoped to hear the company acknowledge the responsibilities that accompany its preeminent position in the Internet search market and address concerns many have raised about Google’s possible anticompetitive activities,” the subcommittee ranking member said. “Unfortunately, I fear that some of the testimony in today’s hearing may only encourage those who are calling for legal enforcement or government regulation.”

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