Google grilled by US Senate

By Andy Goldberg Sep 21, 2011, 22:03 GMT

San Francisco/Washington - Google was in the cross-hairs of US legislators Wednesday as the Senate's antitrust subcommittee held a hearing on whether the company was using its search dominance to handicap competing services.

Democratic and Republican legislators displayed a rare degree of bipartisanship in probing the Silicon Valley heavyweight, which has seen its influence even further extended in recent years as its smartphone operating system Android has grown into the world's most popular smartphone software.

Google controls over two-third of US internet queries and is the target of a formal antitrust probe launched earlier this year by the Federal Trade Commission.

But Google chairman Eric Schmidt insisted that he and other executives at the web search giant were focused solely on providing consumers with the best possible services, rather than maximizing the company's profits. He noted that the company makes over 500 changes each year to its search algorithms to ensure the best results.

'Our principles always put consumers first,' said Schmidt, saying that these principles override Google's focus on maximising profit.

'We focus on loyalty, not lockout,' said Schmidt. 'It's easy to leave Google services - we want consumers to stay with us because we're better, not because they're locked in.'

'The ultimate correction is how consumers behave and we live in fear every day that consumers will switch to other services,' Schmidt said.

He suggested that it was disingenuous to consider Google an unassailable monopoly in the fast-changing world of the internet where powerful new competitors such as Facebook can spring up almost overnight.

Schmidt denied that Google games its search results to bump its own products up the rankings list. But he defended the company's practice of often providing direct answers to consumer queries from its own database, rather than directing them to external websites.

'If we know the answer it's better for the consumer to answer the question so they don't have to click anywhere,' he said.

He said he was 'not aware of any strange boosts or biases' that would favour Google.

That assertion was questioned by Senator Richard Blumenthal.

'You run the racetrack. You own the racetrack. For a long time, you didn't have any horses,' Blumenthal said. 'Now you have horses ... and your horses seem to be winning.'

Schmidt's position was also disputed by other witnesses at the hearing.

'Google doesn't play fair,' charged Jeffrey Katz, CEO of shopping comparison site Nextag, who claimed that Google favoured its own sites in search results at the expense of competitors.

'Google rigs its results, biasing in favor of Google Shopping and against competitors like us,' he said in written testimony. 'As a result, Nextag's access is more and more discriminated against. Not because our service has gotten worse ... but because we compete with Google where it matters most, for very lucrative shopping users.'

Jeremy Stoppelman, the CEO of local ratings site Yelp, said that as Google began to expand its own sites it had discriminated against possible competitors. He told the hearing that Google had wanted to use Yelp's ratings on its own search results and that when Yelp refused, it threatened to stop indexing Yelp altogether.

'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,' he said.