Regulating the internet
The search giant’s antitrust headache gets bigger
Jun 30th 2011 | SAN FRANCISCO | from the print edition
SINCE the start of this year, Google’s share price has fallen steadily as investors have begun to fret about its longer-term prospects. Now they have another reason to worry. On June 24th the company revealed that America’s Federal Trade Commission (FTC) had opened a broad investigation into its online-search and online-advertising businesses to see if it has abused its dominant position. Some pundits predict that the trustbusters’ tussle with Google could turn as bloody as their battle with Microsoft in the 1990s.
The regulators’ move comes at an awkward time for Google, which faces a growing threat from Facebook, the world’s biggest social network. Facebook aims to supplant Google as the main conduit via which people access the web. On June 28th Google hit back, unveiling Google+, a social-network platform to rival Facebook.
Google’s new offering, which is still in trial form, boasts some handy features. It makes it easy to set up separate groups, thus sparing your boss from seeing your semi-clothed and inebriated party snaps. It also lets up to ten people hold a video chat together. But this will probably not be enough to get people to abandon Facebook, which benefits from a powerful network effect: people join it because most of their friends already have.
Still, Google’s determination to keep innovating has served it well in its core business of search, where it commands nearly two-thirds of the market in America and an even higher share elsewhere (see chart). It is this dominance that has attracted regulators’ attention in America and abroad. Last November the European Commission announced a similarly sweeping review of Google’s operations.
Another reason that Google is attracting more attention is that it keeps expanding into new areas. In Silicon Valley, one of the first questions a potential investor asks a start-up is: “What would you do if Google moved into your space?” Some of Google’s new ventures have been controversial. For instance, regulators recently gave the company a green light (with conditions attached) to acquire ITA Software, which provides online flight information. Several other travel companies opposed the deal, howling that it would limit competition. Google’s critics say that because it has its fingers in so many pies, from online video to location-based services, it must surely be tempted to give some of its own businesses an artificial boost in its rankings.
谷歌吸引更多注意的另一个原因是它不断向新领域扩张。在硅谷，潜在投资者询问新创办公司的首要问题是：“如果谷歌进入你们的业务领域，你们会怎么做？”谷歌的一些新投资项目充满争议，比如监管者近来对该公司收购在线航班信息公司ITA Software的交易大开绿灯，其他一些旅游公司对这项交易表示强烈反对，他们咆哮说，这将限制竞争。谷歌的批评家表示，因为谷歌染指了从在线视频到位置服务（location-based service）的众多领域，它必定非常想人为推高自己业务的排名。
Google acknowledges that it makes hundreds of tweaks a year to the algorithms that determine the search results it serves up. But it insists that its aim is to improve users’ experience by, for example, blocking spam and thwarting firms that try to game its system. It also likes to point out that its rivals, including Yahoo! and Microsoft’s Bing search engine, are merely a click away. Rivals retort that only Google’s name has become a verb, and that this reflects its vice-like grip on the market. (The other possibility is that Google’s search engine is more popular because it is better.)
Google is not invincible. Bing has been slowly increasing its share of American searches and is working with Facebook on integrating social-networking data into its results in a bid to improve them. (This is another reason why Google wants its own source of social data.) People are also being offered more and more digital information via other sources, including specialised search engines and software applications on smartphones.
When it comes to web advertising, it is equally hard to see how any charges of monopolistic abuse against Google can be made to stick. There is no shortage of sites and ad networks unconnected to Google that are ready to take advertisers’ dollars. And the cost of switching from Google to a rival is very low.
None of this guarantees that Google will escape unscathed from the investigation. Eric Goldman of Santa Clara University reckons that the FTC’s watchdogs could raise questions about Google’s habit of occasionally bidding in its own ad auctions to promote “house” ads for its businesses. Google insists that it has always been transparent about this practice.
这些都不能保证谷歌能够安然逃脱调查。圣塔克拉拉大学（Santa Clara University）的埃里克•高曼估计，美国联邦贸易委员会的监管人员可能对谷歌偶尔参与自己组织的拍卖活动，为自身业务需要推销自家广告（House Ad）的行为进行盘问。谷歌坚称对此业务一直保持透明。
Like watchdogs for chocolate
Yet even if Google has to make some concessions in the end, talk of its predicament being the same as Microsoft’s in the 1990s is plainly ridiculous. By embedding only its own web browser into its Windows operating system, Microsoft deliberately restricted users’ choice in the hope they would become addicted to its products.
Google is also addictive, but in the way that chocolate is, not in the way that cigarettes are. People love Googling, but they can easily give it up. Google’s lawyers must be hoping that the FTC understands this crucial distinction.