IN the 1990s, Gary Reback, a Silicon Valley lawyer, almost single-handedly brought the antitrust weight of the federal government down on that eraâ??s high-tech heavyweight, Microsoft. Now Mr. Reback contends there is a dangerous new monopolist in the catbird seat: the search giant Google.
Gary Reback, a Silicon Valley lawyer, calls Google the "arbiter of every single thing on the Web."?
This month, Mr. Reback shepherded Adam and Shivaun Raff, the husband-and-wife entrepreneurs behind the London comparison shopping site Foundem, around Washington. The three held meetings with Congressional staff members and antitrust enforcers at the Department of Justice and the Federal Trade Commission.
Their goal was to air the Foundem coupleâ??s complaint that in 2006, Googleâ??s supposedly objective algorithms suddenly dropped Foundem into the netherworld of Google search results. They say Google also raised the rates Foundem had to pay to advertise alongside search results. These moves, the couple say, pushed their comparison shopping site out of view, and Google later put the spotlight on its own shopping listings.
Google is the â??arbiter of every single thing on the Web, and it favors its properties over everyone elseâ??s,â? said Mr. Reback, sitting in a Washington cafe with the couple. â??What it wants to do is control Internet traffic. Anything that undermines its ability to do that is threatening.â?
Google says its mission is to give users the information theyâ??re looking for even if that means giving its own content priority and de-emphasizing sites it believes offer poor experiences. â??Telling a search engine that it cannot innovate and show results in a way that benefits users would undermine the very goals of our competition laws,â? says Matthew Bye, a Google lawyer.
But the search giantâ??s decisions on such matters may soon be judged by higher authorities. Over the last several years, it has become the canonical way to search the Web, an information doorway that dictates what kind of knowledge is visible to the browsing public. That growing market power has generated both sky-high profits and unwanted regulatory attention.
Almost a decade after Google promised that the creed â??Donâ??t be evilâ? would guide its activities, the federal government is examining Googleâ??s acquisitions and actions as never before, looking for indications that the companyâ??s market power may be anticompetitive in the worlds of Web search and online advertising.
â??They are not just on the radar screen. They are the at the center of it,â? said Tim Wu, a professor at Columbia University and the author of a forthcoming book on technology monopolies, â??The Master Switch: The Rise and Fall of Information Empires.â? â??If you are in the federal government and are interested in antitrust, you are looking at Google.â?
Google has managed to squeak by most regulatory reviews. On Friday, the Federal Trade Commission approved Googleâ??s $750 million acquisition of AdMob, a mobile advertising start-up. Staff members had initially planned to oppose the purchase, even saying in a statement that the deal â??raised serious antitrust issues.â? But the agency ultimately endorsed the deal, assuming that Appleâ??s entry in the market would facilitate competition.
Nevertheless, the search giant may get an indication this summer of just how uncomfortable Washington can get for such dominant firms. Federal Judge Denny Chin is expected to rule in the next few months on Googleâ??s amended settlement with authors and book publishers and whether the agreement gives the search giant too much control over the millions of library books that it scanned. The Department of Justice has opposed the settlement on two occasions.
At the same time, Googleâ??s own missteps have prompted a new round of scrutiny. This month, it admitted that its camera-equipped cars, which drive around photographing the worldâ??s neighborhoods for Street View images within Google Maps, had inadvertently collected fragments of communications from people using unsecured WiFi networks. Privacy advocates howled, while the F.T.C. and regulators in Europe said they were looking into the matter.
Taken together, these inquiries are a litmus test for the federal governmentâ??s willingness to challenge a widely liked and admired company and to take on some profoundly difficult questions.
Can monopolies exist online, when competition is only a click away? What constitutes anti-competitive behavior in the complex networked economy, where the very size of big companies allows them to operate more efficiently, and thus grow even bigger? Are consumers harmed if various services are bundled together, but everything is free?
Google executives acknowledge the scrutiny. â??Weâ??re getting larger, and we have been very disruptive within some industries,â? says Alan Davidson, head of United States public policy at Google. â??We know we have a giant bullâ??s-eye on our backs.â?
IN Washington, there is significant disagreement over the proper scope of competition regulation and what the future should hold for Google â?? and both sides have big financial stakes.
On one side are companies like AT&T and Microsoft, which vociferously lobby against Google in the policy arena.
AT&T is Googleâ??s staunchest foe in the battle over â??net neutrality,â? a term used by Google and others who fear that telecommunications providers might throttle bandwidth for certain Internet services, discouraging innovation. Microsoft provides e-mail and other services in competition with Google and has a rival search engine, Bing, which controls 11.8 percent of the market in the United States. (Google has 64.4 percent, and Yahoo 17.7 percent, according to comScore.) Microsoft is also a paying member, along with Amazon.com and Yahoo, of the Open Book Alliance, a group founded by Mr. Reback to oppose the Google Books settlement.
Google oozes a confident, seemingly cavalier attitude. Its Washington office, a few blocks from the White House, has all the casual accouterments of other Google spaces, like massage chairs and foosball tables. Furthering the idea of an open, freewheeling atmosphere, the company uses a public meeting space at the office to present regular events that are available to the public, like conversations with authors and a recent panel about home energy use with Carol Browner, a senior energy official at the White House.
When it comes to government scrutiny, the companyâ??s executives challenge the premise that Google is a monopoly, even as the companyâ??s share of the search market inexorably rises, arguing that Google is still a minor player in the overall advertising market, which totals $800 billion a year.
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