August 18, 2010
Google Uber Alles
Brad McCarty published an interesting piece at The Next Web Google yesterday. He looked at the Google-Verizon net neutrality proposal and suggested that Google may be doing a bit of slight of hand with some of the language in the proposal. McCarty focuses on this:
Regulatory Authority The FCC would have exclusive authority to oversee broadband Internet access services, but would not have any authority over Internet software applications, content, or services. Regulatory authorities would not be permitted to regulate broadband Internet access service.
His main point revolves around the words "but would not have any authority over Internet software applications." This, he says, is Google's way of protecting its search product from government regulation interference. The point is legitimately raised because of the number of governments that are looking into Google's business practices from either a privacy or trade regulation perspective.
As McCarty notes, Google maps are favored over Mapquest, and Google Places is favored over Yelp in search result placement. Given the report today that Google owns 65% of the search market, is this fair? Net neutrality in general suggests that a neutral web does not discriminate against content access. Nominally, that would be true. No entity should stop anyone from going to Mapquest, but does that require Google to treat searches for mapping services equally?
It's not exactly ancient history that the Justice Department accused Microsoft of manipulating its share of the browser and search market in the 1990s. What did that accomplish? Microsoft had to open up Windows and Internet Explorer to search via other providers beyond MSN, Live Search, Windows Live Search, Bing, or whatever the branding happens to be. Still Microsoft is allowed to make that process not easy for consumers. Want Google as a default search provider? Download the code that makes that happen. It would be easier if it were just there. At the very least, the Judge, the Justice Department, and all the other relevant parties settled on an open system that still nominally favored Microsoft search.
The European Union took a slightly different approach in the last decade, mandating a browser ballot during Windows setup. That evened out some of the browser market share in Europe. Why, even Opera went from less than a percent to the low 2s. At the same time, it helped Google's search market share as these alternatives to IE tended to use Google as the default search. It's not so easy to simply fine tune an interconnected market.
Google is a dominant company. There is no doubt. It competes on a number of product fronts. It's search product is the money maker. YouTube, it's video product, is the most dominant source of video on the web. It doesn't do well in social networking, what with Buzz being an also-ran in that category. Calling Buzz an also-ran disrespects also-rans. But if McCarty is right, the language, if enacted in one form or another, means Google would be allowed to keep its dominant position in search and expand its other offerings by tieing them to that dominant position. McCarty says that Google has been able to to create a walled garden promoting its own services in this way. Is that something like tying a browser to an operating system to maintain the dominant way of getting to the Internet? Hmmmm.
Google is under attack on several fronts for its business activities. Antitrust questions abound from the Google Book Settlement. Whether or not a judge approves it in present form or requires more modification, there will be appeals and more appeals. Google is under investigation for capturing unsecured Wifi information in several countries. Google's defense to that one is we just picked a big bunch of whoopsie daisies. The U.K. bought that excuse, but other countries may be a bit more difficult. Google's intention to buy ITA software, the company which provides major information about airline fares has many in the industry nervous. Most of the major travel sites advertised on television use ITA for a lot of their consumer sales. Even Bing uses it. Imagine that.
So, is Google really a "don't be evil" company or is it a Microsoft (the old Microsoft, the current one is really turning into a one or two trick pony) with a smiley face. The conundrum is that Google is so gosh darn good at what it mostly does. But what, really, are the limits of market power? Is this proposal really an attempt to limit regulatory interference in its business practices. I'll remind all that the first part of the quoted statement refers to the FCC, but the latter says "Regulatory authorities." That could be the FCC, the FTC, the DOJ. Sure, it's a long way off before Congress steps in and legislates. But this requires more scrutiny before turning into law. [MG]