[governance] regulating global digital monopolies

[parminder]

See below about an anti-trust inquiry against Google in the US senate... 
Can a small country in Africa or Asia do such an inquiry against google 
today. So, whatever the US government decides on whether Google breaks 
competition law or not, would by default be applicable globally. Can 
US's commercial (and perhaps social/ cultural/ political) interests not 
color its judgement on this issue? Even otherwise, is such a 
undemocratic practice acceptable to us, or do we simply not bother, with 
multistakeholder participation being our sole agenda ? If unacceptable, 
what is the global governance response to this key governance issue, and 
many others like this...... Do we have a response? Are we even headed in 
the direction where a possible response may lie? What is civil society/ 
IGC's responsibility in this regard?

parminder


  Good Google or bad Google?

Steve Lohr

The search giant's online commerce venture is being challenged as a 
conflict of interest.

Good Google or bad Google?

Those two headline narratives competed for credibility in a three-hour 
hearing on Wednesday before a Senate antitrust panel, which heard 
testimony from Google's chairman Eric E. Schmidt and competitors of the 
search giant.

Google's story: The company is zealously dedicated to helping people 
find the most useful information on the Internet, and Google's 
prosperity and the economic opportunity it has created for many 
thousands of American businesses all flow from that high-minded mission.

The rivals' rebuttal: Google increasingly tilts search results in favour 
of its own online commerce offerings like travel and shopping as it 
bundles those services into its industry-dominant search engine, 
limiting choice and stifling competition.

The Senate hearing has been the most prominent one yet in the debate 
about Google's business practices and their effect. Antitrust regulators 
in the U.S. and Europe are investigating Google as it steadily expands 
its business beyond search.

At the start, Senator Herb Kohl, chairman of the Judiciary's antitrust 
subcommittee, pointed to the potential conflict of interest. “Is it 
possible,” he asked, “for Google to be both an unbiased search engine 
and at the same time own a vast portfolio of Web-based products and 
services?”

Later, he suggested that the profit motive would naturally tilt search 
results toward Google services. Not so, Mr. Schmidt replied. “I'm not 
sure Google is a rational business trying to maximise its own profits,” 
he said.

He never mentioned Microsoft by name, but his testimony was intended to 
draw a distinction between his company and the last technology 
powerhouse that was investigated, sued and found to have violated 
antitrust laws. That former innovator, Mr. Schmidt said, “lost sight of 
what matters and Washington stepped in.”

Google, he said, has studied that history. “We get it,” Mr. Schmidt 
said. “We get the lessons of our predecessors.” Later, circling back to 
that theme, he said, “One company's past needn't be another's future.”

Mr. Schmidt described the online economy as highly competitive, with 
users “one click away” from other sources of information. The many 
rivals include search engines like Microsoft's Bing, review and listing 
sites like Yelp, comparison shopping sites like Nextag, online merchants 
like Amazon and social networks like Facebook. “The Internet is the 
ultimate level playing field,” he said.

There were a few testy moments. Senator Mike Lee showed a chart with the 
rankings for Google Product Search in hundreds of shopping searches, 
compared with the rankings of three comparison shopping sites, Nextag, 
Pricegrabber and Shopper. The rivals' rankings varied widely, while 
Google's service was consistently ranked third.

Mr. Schmidt first replied that the chart was an “apples to oranges” 
analogy, because the Google service steers users to specific products 
and is not a shopping comparison site.

Unconvinced, Mr. Lee said, “You cooked it so you are always No. 3.”

Mr. Schmidt replied, his voice tightening, “Senator, I can assure we 
haven't cooked anything.”

Google's competitors testified in a second panel, after Mr. Schmidt, an 
arrangement that Google requested and the subcommittee accepted. The 
competitors described a different world than Mr. Schmidt portrayed, 
saying Google has immense market power and uses it.

Jeffrey Katz, the chief executive of Nextag, said Google was “an 
outstanding partner to us for many years,” but the relationship has 
become strained as the search company expanded. Google's business 
interests, he said, conflict with its commitment to an open-for-all 
Internet.

“But what Google engineering giveth, Google marketing taketh away,” Mr. 
Katz said. “Today, Google doesn't play fair. Google rigs its results, 
biasing in favour of Google Shopping and against competitors like us.”

The issue, he said in a separate interview, is subtle and does not 
affect all Google searches, mainly ones related to buying goods or 
services. “When you search for ‘running shoes' or ‘digital camera,' 
Google transforms itself from an independent search engine to a commerce 
site,” Mr. Katz said. “But that is not what happens when you type in a 
search for, say, ‘kidney dialysis.'”

Jeremy Stoppelman, the chief of Yelp, said sites like his have to 
cooperate with Google because it is the gateway to so many users. About 
half of Yelp's visitors come through Google search.

Google, Mr. Stoppelman said, folds the reviews of other sites into its 
own offerings. “Google forces review websites to provide their content 
for free to benefit Google's own competing product not consumers,” he 
said. “Google then gives its own product preferential treatment.”

Under questioning, both Internet entrepreneurs were asked, given 
Google's evolution, would they start their businesses today. They would 
not, they said. “With Google taking so much of the real estate, I 
wouldn't do it today,” Mr. Stoppelman replied.

Mr. Katz said Google should either give competitors in online commerce 
equal treatment in search results or clearly disclose its conflict of 
interest.

He punctuated his point by using the same phrasing Mr. Schmidt did when 
he testified. “Level playing field, level playing field, level playing 
field,” Mr. Katz said. *— New York Times News Service *


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