MarketingData-Driven MarketingSenate Grills Google’s Eric Schmidt on Market Dominance

Senate Grills Google's Eric Schmidt on Market Dominance

Judiciary Committee probes search giant's bias toward its own web products.

Members of the U.S. Senate Judiciary Committee grilled Eric Schmidt today about whether Google’s search market dominance poses a competitive threat to rivals in areas like news, shopping, local business reviews, and travel.

But even as they pressed him about whether Google had used its search influence as a lever to advantage its products in those other categories, some Senators fretted that the tech innovation, and resulting jobs, the search giant has produced should not be stifled by undo regulation.

Minnesota Democrat Al Franken captured the conflicted mood when he told Google’s chairman, “Google’s unprecedented growth and success is… one of the reasons we need to pay attention to what you’re doing. As you get bigger and bigger I wonder what that means for the next Larry Page or Sergey Brin who are building the next product.”

Senator Herb Kohl, a Wisconsin Democrat, sounded a similar tone: “Google is a gate keeper with enormous power to influence the information people can obtain on the internet…Is it really possible to have really unbiased search results for news and information queries?”

Criticism of Google did not split along party lines. It was a Republican, Utah’s Mike Lee, who took his criticism the farthest, calling on Google to voluntarily change the way it promotes its own products – for instance by guaranteeing it does not penalize websites that are competitive.

He said, “I’m troubled by what we’ve learned today about Google’s practices and I hope that you will take swift action.”

During his testimony and questioning, Schmidt strenuously objected to characterizations of the company as a monopolistic tyrant seeking to consolidate its power. He argued, as Google’s public policy executives repeatedly have, that search engines increasingly compete with Facebook and other social media companies to fill consumer demand for information.

But he also acknowledged the need for vigilance in safeguarding consumer choice on its search results pages.

Asked to comment on the company’s $500 million Justice Department penalty earlier this year related to the sale of ads to Canadian pharmacies selling drugs illegally to U.S. residents, Schmidt consulted his counsel and then declined to elaborate. He would say only, “We regret what happened, it was a mistake, and we apologize.”

Schmidt’s caution provoked occasional exasperation from committee members. At one point, after Schmidt gave an uncertain response to a question about whether Google’s algorithm favors its own products, Senator Franken expressed dismay. “We’re trying to have a hearing here about whether you favor your own stuff. And you admittedly don’t know the answer.”

 

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