Today, Google's going to be grilled, chopped, and fried before Congress, which is digging into the search giant over accusations of anticompetitive mischief. There are two possibilities here: Google's breaking the law, or it's a victim of its own success.
In short, Google's competitors think the search giant is wielding its massive internet hegemony unfairly. If you're Yelp, you're angry that Google Places gets preferential treatment when people search for restaurant reviews. If you're Yahoo!, you're angry that Google Maps is the top result for "maps." Ditto for email, travel, and shopping, which is why executives from Nextag, Expedia, and Yelp are all testifying against Google and its CEO, Eric Schmidt.
The testimony that Yelp CEO Jeremy Stoppelman plans to pitch Congress today lays the general grievances out succinctly:
Google is no longer in the business of sending people to the best sources of information on the web. It now hopes to be a destination site itself for one vertical market after another, including news, shopping, travel, and now, local business reviews. It would be one thing if these efforts were conducted on a level playing field, but the reality is they are not. The experience in my industry is telling: Google forces review websites to provide their content for free to benefit Google's own competing product – not consumers. Google then gives its own product preferential treatment in Google search results.
In response to our objections, Google informed us that it would cease the practice only if we agreed to be removed from Google's web search index, thereby preventing Yelp from appearing anywhere in Google web search results. This, of course, was a false choice. Google's dominant position in the market prevents services like Yelp from exercising any sort of meaningful choice in the matter: it is a choice between allowing Google to co-opt one's content and not competing at all.
In short: Google owns search, companies need Google, Google forces companies to either sit at the kids' table or starve. Companies like Yelp think Google's guilty of anticompetitive behavior because they've lured the internet masses into their corral with only the guise of choice—in reality, we're wandering a fenced-off plantation where Google's stuff is all that matters.
Schmidt puts the company's stance well himself: "Users can and will switch. The cost of going elsewhere is zero, and users can and do use other sources to find the information they want." Unlike Microsoft, which made an Everest of cash because we had zero choice but to buy a PC with Windows installed on it, using Bing or Yahoo! is easy and free. Everything Google offers is free. And if we don't like it, we can use a competitor. Furthermore, the competition is pretty great these days! Don't like Android? Buy Windows Phone. Don't like Google Maps? Use Bing Maps. And so forth. Google is massively popular because, for the most part, they're the best—Hotmail is still a travesty, MapQuest is an embarrassment, and, if only for psychological reasons, Google's search is still considered the gold standard in "what's out there on the internet." Taken this way, Google's being attacked because simply because they're better than everyone else.
And is it so unfair that they'd favor their own products? If they were transparent about it, and still offered the option of clicking elsewhere, I can't imagine it would be. When you go to a McDonalds, you don't whine at the absence of Whoppers. If Google billed itself as a service portal, loathe as I am to use that term, instead of just a search engine, a lot of the griping might lose its basis. Go to Google, expect Google products. If that's the de facto situation, assessing it as such makes the whole thing seem like less of a monopolistic horror.
The Congressional hearing begins at 2 PM EST, in Washington, DC. We'll cover it once it begins, but here's what's going to matter most:
What does Google say about its page ranking?
Google's going to be called out for artificially boosting its own services, instead of just letting the sacred algorithm do the work. Hearing an official response on this, under government pressure, will be interesting, and crucial to the discussion. If Google's gaming the system without telling anyone, it's hard to grant them much sympathy. Google, of course, denies these claims, saying "We rank search results to deliver the best answers to users, and that is the only consideration – not political viewpoints, and not advertising dollars."
What does Google think Google is?
Is Google going to paint itself as strictly impartial search engine, or admit that's become far more?
How hard is the Congressional beatdown?
The attitude reflected in DC might influence the rest of the federal government, including the FTC, which is doing its own investigation of Google. If they come across as sniveling and secretive, they'll have blown a serious moment in the public eye. If they present reasonable, pro-consumer arguments, they'll probably endear themselves with politicos.
At any rate, we'll know much more (and have much more to say) in a couple of hours, when the eye-squinting and paper-shuffling on The Hill begins. I wonder if Eric Schmidt is staring in a mirror and slapping himself right now. Today it's just a congressional hearing, sure, but if the anti-trust train picks up steam, Google could end up facing a full-blown DoJ investigation. And those usually don't end well.