The U.S. Department of Justice should launch a broad antitrust investigation into Google Inc.’s search and advertising practices and consider a wide array of penalties, including possibly breaking the company up, a consumer group said today.
Consumer Watchdog, along with a mobile entrepreneur and two lawyers representing Google rivals, all called on the DOJ to initiate an antitrust investigation focusing on a number of issues, including Google’s marriage of search results to advertising and its book search service.
“The time has clearly come for Justice to launch a major, broad antitrust investigation against Google, and we think all remedies should be on the table, including, we think, the possible breakup of the Internet giant,” said John Simpson, a consumer advocate with Consumer Watchdog. The 25-year-old organization focuses on a number of consumer issues, including health care, insurance and energy, but the group’s move into tech issues in recent years has largely focused on criticisms of Google.
Consumer Watchdog sent a letter to the DOJ Wednesday asking that the agency investigate Google for antitrust violations. “For most Americans — indeed, for most people in the world — Google is the gateway to the Internet,” the letter said. “How it tweaks its proprietary search algorithms can ensure a business’ success or doom it to failure.”
A DOJ spokeswoman declined to comment on Consumer Watchdog’s request.
Simpson and other speakers criticized several of Google’s business practices.
Google has manipulated search and advertisement placement results to shut out potential competitors who counted on Google results to drive traffic to their sites, said Joseph Bial, a lawyer at Cadwalader, Wickersham & Taft who represents myTriggers.com and TradeComet.com. Both companies have filed antitrust lawsuits against Google alleging that the search giant shut out their attempts to advertise on Google.com.
Google’s dominance in search and search-based advertising means that online and mobile advertisers have little choice but to do business with them, added Simon Buckingham, the New York-based founder of Ringtones.com and Appitalism. The close ties between Google’s search results and search-based advertising means the “neutrality of the search results are compromised,” he said.
Adam Kovacevich, senior manager for global communications and public affairs at Google, discounted the criticisms, saying Consumer Watchdog has been “relentlessly negative” about Google. The group recently questioned the reasons why Google stopped censoring search results in China and criticized Google’s privacy Dashboard as inadequate, Kovacevich said.
“We totally understand that with size and success comes scrutiny,” he added. “Although given their track record, even if we broke Google in half tomorrow, Consumer Watchdog would probably insist that we split halves into quarters.”
While Simpson and other participants in the press conference criticized Google’s search results and ad delivery system as being opaque, Kovacevich said Google has worked hard to be open with publishers and users.
“Ultimately, criticizing Google for its ‘secret formula’ is an easy claim to make, but it just isn’t true,” Matt Cutts, principal engineer for Google’s search quality team, wrote in a blog post in March. “Google has worked day after day for years to be open, to educate publishers about how we rank sites, and to answer questions from both publishers and our users. So if that’s how people choose to define ‘secret,’ then ours must be the worst kept secret in the world of search.”
Google also continues to try to improve its search results, Kovacevich said.
An attendee of the Consumer Watchdog press conference also questioned the need for an antitrust investigation. Ed Black, president and CEO of the Computer and Communications Industry Association, a trade group counting Google as a member, suggested many calls for antitrust scrutiny of Google were coming from the company’s rivals.
“Isn’t part of the issue that Google is, in fact, a very strong competitor and disrupter of several markets with dominant players?” Black said. “A lot of the opposition and attacks on Google are really being fronted by people who don’t like, for the first time, that they have a company competing against them.”
There seems to be little evidence that Google is violating antitrust laws, Black added. “There is not a record of proven misconduct here at all,” he said.
But Simpson and Gary Reback, an antitrust lawyer and founder of the Google Books settlement opponent the Open Book Alliance, suggested enough complaints about Google exist to warrant an investigation.
Protecting consumers is “what we pay Justice for,” Simpson said.
“Is there a case here?” Reback added. “How would we know without looking?”
Asked how the DOJ could break up Google, Simpson suggested the agency could separate its search function from its advertising business, although he didn’t explain how Google would recover the costs of providing search. The DOJ could also order Google to spin off its Gmail and Buzz product lines and YouTube, he said.