Congress doesnt get Google, and it doesnt get Congress

Is Google evil? Members of the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights tried to decide that today in a hearing on Googles market power and whether it is beneficial for consumers or not. The end result was that the Senators requested Google make voluntary changes to its search ranking, and tried to keep Google honest through tough questions. But while the hearing exposed some questionable results on Google searches notably product searches it also exposed a lack of clarity around who Googles customers are, and a fundamental conflict of cultures between Silicon Valley and Washington, D.C.

Among the key themes highlighted, here are some standout moments from the hearing:

Eric Schmidt, in response to a question about Googles temptation to send consumers to web sites that generate more profits for Google: Im not sure Google is a rational business trying to maximize profits.
Sen Michael S. Lee (R-Utah) said, after showing a study that illustrated that Googles product search mostly come up third in its results, youve cooked it so youre always third.Schmidt was quick to point out the Google wasnt cooking any results.
Eric Schmidt, in response to requests that Google try to adapt results so the top searches arent for sites offering counterfeit or pirated goods and content: We try to represent the web the way it is rather than the way we wish it would be.
Stoppleman testifying that: Google is no longer sending people to the best destination on the web, but to the destination that is most profitable for Google.

Consumer friend or gatekeeping monopolist?

Does Google exist to help consumers find web pages and deliver search results, or is it a monopol! y gateke eper that charges businesses to connect them with online consumers? Who would the government be protecting if it interfered with Googles market power and would that serve businesses or consumers? Googles Chairman Eric Schmidt and Susan A. Creighton, a Partner Wilson Sonsini Goodrich & Rosati, went to great pains to illustrate that consumers could just move from Google to a competing search engine if they didnt like Googles results meaning D.C. need not get involved.

Those who feel that Google acts as a gatekeeper between consumers and businesses on the web were represented by Jeremy Stoppelman of Yelp and Jeff Katz CEO of Nextag Inc. Each explained their firms couldnt compete or even begin their businesses in todays search climate because Google is making the entry of web-based companies that provide consumers information so difficult. But Im not sure I can buy into the gatekeeper idea as a reason for Washington to intervene.

Stoppelman did a great job explaining that he began Yelp in 2004 because he saw a hole in the market. He then outlined how Google played rough with the site in terms of scraping its content after Yelp refused a deal with it. Thats a crappy thing to do, but thats what lawsuits are for. Check out Skyhooks lawsuit with Google over location. Yelp wasnt having its content taken because it was a small business unable to buy lawyers it was having its content taken because it was a company so successful that Google actually tried to buy it, and Yelp said no. Stoppelman might not see a hole in the market today, but its kind of ridiculous to expect any market to stay the same for seven years.

If consumers can switch easily to a new search engine, Congress getting involved makes it seem like we are in danger of becoming a nanny state to protect specific business interests. And that makes me nervous (my colleague Mathew Ingram is also skeptical about the need for an antitrust investigation of Google, arguing that technological innovation has disrupted more monopolies than any government ever has. Indeed, I found it odd watching Senator Amy Klobuchar (D-Minn.) and Senator Chuck Grassley (R-Iowa) ask Schmidt about how its algorithms affect small businesses and what might be done to protect those businesses from changes to Googles algorithm.

Is part of the problem a clash of cultures?

Schmidt, like any computer scientist, tried to argue that the algorithms do what they are supposed to do. From a computer science view, if an algorithm is fair, then changing to protect a certain class of those affected by it makes it fundamentally unfair to others (something Congress routinely does with exceptions and carve outs when its making legislation). In fact, the biggest elephant in the room was a clash of cultures between the Silicon Valley culture of the free market and using technology to create a better consumer experience and Washington D.C.s inherent cynicism and pandering to constituents.

Also, the senators wanted broadband. Both Senators Klobuchar and Chuck Schumer (D-NY) requested Googles fiber to the home experiment in their states. I dont blame them, but it was odd to hear Google be castigated for abusing its search advantage (and hearing Senators tie that advantage to its infrastructure and sc! ale earlier in the hearing) while other members of the committee requested services that would enhance Googles ability to create higher barriers to entry. In the binary world of Silicon Valley that may not make sense, but in D.C. it apparently does.

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