Google Faces Mounting Antitrust Challenge

Google Faces Mounting Antitrust Challenge

U.S. senators are calling for public hearings on Google’s business practices, joining several state attorney generals and the European Commission in a growing chorus that could impact the company’s acquisition strategy and future expansion.

Search engine bias and unfair acquisitions are the main issues under review. Critics argue that Google is abusing its dominance in online search by putting rival search results lower on the results page and unfairly promoting their own products, an expanding array of mapping, video, restaurant ratings, and shopping comparison tools.

“We will closely examine allegations raised by e-commerce websites that compete with Google that they are being treated unfairly,” said Senator Herb Kohl, who is the chairman of the antitrust subcommittee.

Google maintains that its search engine criteria is based strictly on what is most relevant and what best serves users, and some sites are ranked poorly because they are less relevant and useful. But as the company moves beyond its search business and expands into areas such as mobile advertising, it faces growing scrutiny by antitrust regulators for conflicts of interests.

That scrutiny could result in a fracturing of policy to comply with decrees in several markets, hampering its expansion worldwide.

Antitrust allegations are sure to gain momentum, as the senators join several states’ attorneys general in addressing Google’s acquisitions and possible search engine bias. Last year, Texas Attorney General Greg Abbott began a probe into whether Google’s practices unfairly stymied competition, focusing on getting the company’s formula for setting advertising rates as a jumping off point.

Ohio’s attorney general, Mike DeWine is reportedly evaluating facts to decide whether he will open an investigation, and Wisconsin’s attorney general J.B. Van Hollen and Missouri’s attorney general Chris Koster are considering a probe in light of Google’s bid to buy flight-information company ITA Software. About 15 attorneys general from across the country reportedly have discussed the subject of Google probes at a private meeting of the National Association of Attorneys General in Washington D.C. earlier this month.

These moves come amidst the European Commission’s investigation into whether Google skews search results to benefit its own services.

Google has 65 percent of the U.S. search market according to ComScore, and regulatory filings indicate the company spent about $1.8 billion for 45 acquisitions last year, raising eyebrows and concerns about competition. Microsoft faced a similar line of inquiry over 20 years ago, again begun by Texas, which blossomed into a Federal Trade Commission inquiry in 1990, and then a full blown case spearheaded by the Justice Department in 1993.

While there is a precedent with Microsoft, neither the Justice Department nor the FTC has said they are actively pursuing a case against Google at this time.

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