Google co-founder Larry Page has now taken over as CEO. Welcome to hell, Larry!
Google is facing calls for a mounting wave of lawsuits, investigations and other actions by grandstanding government agencies, lawmakers and attorneys general. These complaints fall into three broad categories:
1) Abuse of search engine dominance
2) Manipulation of search engine results
These actions are coming at Google from all directions, from puny American state attorneys general, to the mighty European Union – the same organization that shook down Microsoft for a cool $2 billion dollars a decade ago.
Thanks, Europe, for protecting the world from the overbearing dominance of Windows Media Player!
The Federal Trade Commission (FTC) is thinking about launching an investigation into Google’s search engine dominance. But first, they’ll wait and see what happens with a Department of Justice (DOJ) lawsuitagainst Google to block the company’s $700-million purchase of ITA Software. (ITA makes software for airlines that manages online flight and ticket information.)
After the DOJ decides whether to sue Google, the two agencies may negotiate with each other to decide which of them gets to go sink their teeth into the Silicon Valley giant.
Google owns about 65% of the search market in the United States. Yahoo has about 16% and Microsoft has nearly 14%, although Yahoo uses Microsoft’s search engine behind the scenes.
European Union antitrust lawyers have started an investigationinto Google’s search and advertising business. The complaint centers around the allegation that Google gave an advantage to its own services in both paid and unpaid search results, and also that it lowered the ranking for competitors who advertised on Google. Microsoft has also complained to European authorities about Google’s practices.
Google has a whopping 95% market share for search engines in Europe.
Google’s troubles go beyond allegations that it abuses its dominant position. An Italian court has ruled that Google’s autocomplete is libelous, after a man claimed that when you start to search for his name, unflattering suggestions are offered.
Various European governments are forcing changes in how Google operates StreetView. Swiss authorities have slammed Google for auto-blurring only 98% of all faces on StreetView, and is requiring the company to manually view every picture to find and hand-blur the remaining 2%. An unconfirmed report published in Germany says Google plans to stop taking picturesfor StreetView Germany.
The attorney general for the state of Texas is investigating whether Google favors its own web sites in search results. Ohio and Wisconsin are considering their own anti-trust action against Google.
Does all this sound familiar? It should. This is exactly what happened to Microsoft in the 1990s. That company was accused of anti-competitiveness, that it leveraged its monopoly power in PC operating systems to force its Internet Explorer browser or Windows Media Player on users, and other issues. Microsoft faced action by European regulators, the DOJ, and also a large number of states attorneys general.
There was a bandwagon, and everybody jumped on it.
In the end, Microsoft had to shell out a ton of money. But the larger damage was extralegal and non-monetary. The company was humiliated in court, including embarrassing testimony by founder Bill Gates. Government lawyers data-mined the company’s e-mail, looking for smoking-gun evidence. Lots of private e-mail was made public, and it didn’t do Microsoft’s reputation any favors.
And this is exactly what’s likely to happen to Google. None of this action threatens Google’s survival as a business. The more likely outcome is that the company will be nickel-and-dimed to death, and shackled by audits, rules, oversight and government-supervised business practices that do not apply to its competitors.
Google will be forced to hire attorneys, lobbyists, and marketers to polish its public image. It will be required to pay fines here, there and everywhere. And the company could be dragged into court, its internal e-mail mined for nuggets. If that happens, you can count on hearing some headline-grabbing comments by the gaff-prone former CEO, Eric Schmidt.
All this will take place as Facebook laughs all the way to the bank. But don’t laugh too hard, Facebook: You’re next.