What's Driving Government's Gripes with Google?

If it seems like the government has a beef with Google – make that multiple beefs – it’s a logical conclusion. The Federal Trade Commission and the Department of Justice have either formally or informally investigated a variety of its business practices and projects. The Wall Street Journal today has a good round up of the government intervention, particularly the DOJ’s request that Google and its book publishing partners provide “information about a deal both struck last year to allow the search giant to make millions of books available online.”

The article refers to “probes” into “4 Fronts:” the book search deals, the hiring practices of Google and other tech firms, overlap on the boards of Google and Apple, and – of most importance to us here at ClickZ – consumer protection issues related to online advertising (think DOJ’s inspection and subsequent squelching of the Google/Yahoo search deal and FTC’s ongoing work on behavioral ad targeting).

Ever since the news reports surfaced that the DOJ is also inspecting the hiring practices of Google and others (Yahoo and Apple have been named), I’ve been thinking a lot about this investigation pile up, too.

A few questions leap to mind:
1. Is this simply the result a more regulation-prone Democratic administration at work?
2. Is Google being picked on or singled out?
3. How much do lobbying efforts influence these sorts of inspections?
4. Could these investigations be fishing expeditions?

I don’t know the answer to any of these, of course. But I did have a talk about some of these subjects yesterday with Eric Goldman, assistant professor at Santa Clara University School of Law and prolific Internet law blogger.

Specifically, we discussed the reported DOJ inspection of tech firms and their hiring practices. The concern, Goldman and others believe, is that tech firms could be in effect suppressing their labor market. If – as has been standard practice for years – they include “non-solicitation” clauses in their agreements with employees or business partners, they may have placed restrictions on the ability of other businesses to hire their employees, or of employees to freely move to a competitor’s firm.

Such agreements among companies (“Sure, we’ll hire you on a consulting basis, but you have to agree not to poach any of our staff.”) could amount to a cartel-like situation in the eyes of the law. Apparently, said Goldman, trade associations deal with this sort of thing all the time. If, for instance, members of a trade group set standards for doing business, could they freeze out other methods or technologies in the process? That would be an antitrust issue.

The thing is, at least at the higher levels, online ad sector firms seem to be hiring left-and-right, and often grabbing execs from competitors. Very recently, for instance, ad execs have moved from Google to AOL and Facebook. Indeed, Goldman told me he was “surprised that this issue has even been surfaced because there is [indication] that this is a pretty healthy labor market.”

He also indicated that at least some of the investigations involving Google are mere tentacles of a larger animal. “Could the DOJ be sniffing around tech cos. and their hiring practices to see what they can dig up?” I asked him. They may be on a “fishing expedition,” responded Goldman. Either way, he told me, it’s not difficult for the DOJ to obtain the information it seeks. “They can do a lot without formal activity,” he said.