Feeds

Why probe Google for antitrust? It 'does no evil'

Prof: Google ads aren't ads

Intelligent flash storage arrays

Supernova For Eric Clemons, Google's oft-echoed claim that it doesn't believe in doing evil is reason enough to investigate the web-dominating search giant for antitrust violations.

Clemons is a professor of operations and information management at the Wharton School of the University of Pennsylvania - a computer-science mind employed by one of the country's leading business schools - and in recent months, he's made quite a name for himself with his ongoing scrutiny of Google's search platform.

This morning, Clemons appeared at the annual Supernova tech pow-wow in downtown San Francisco to present his case for why such scrutiny is so important. As he pointed out repeatedly, he's not arguing that Google should face antitrust litigation or that it would crumble under such litigation. He's simply saying that investigation is warranted - for many reasons. Including the infamous "do no evil" bit.

"Doing no evil. If you say that, you have to be looked at," Clemons told today's conference. "Anybody who argues they're doing no evil while making amazing profits deserves a quick - or a not so quick - look."

What's more, he says, those profits could allow the company to "spend its way out of trouble. They've got enough money to hire a better set of lawyers than the Department of Justice."

The issue, of course, is that Google controls roughly 70 per cent of the web search market. Google can argue that its share of the global economy - or even the online advertising market - is relatively small. But Clemons questions whether Google's position is analogous to Microsoft's boondoggle of the late 90s, when it faced antitrust litigation. As you may remember.

"[A key term is] relevant market share," Clemons said. "Was Microsoft just another software firm with 2 per cent of the software market or was it a near monopoly player in operating systems? Or is it just another form of advertising? Is search an essential utility?"

For Clemons, Google search is not just another form of advertising. In fact, he says, it's not a form of advertising at all. "We know what advertising is. Advertising creates a desire to buy now. It creates a brand trust and brand awareness... What Google does is it hijacks brands."

You know the drill: When you search for a particular brand, you may find several paid links that lead you to sites that don't actually own that brand. "Is this advertising?" Clemons said. "I really don't think so. Advertisers really don't have a choice."

Sure, he says, advertisers can advertise elsewhere. But that's no substitute for search, an essential online utility. "If you lose access to an essential utility, you are essentially dead." The web has become so essential to consumers - and search has become so essential to the web - that advertisers have no choice but to give Google their money.

Google argues that there's no possibility of antitrust violation here because it doesn't set prices, because advertisers bid for the placement of paid links. And it says the AdWords platform is geared to give brand owners prime placement above the knock-offs. But there's a contradiction there, and for Clemons, the setup is merely geared to maximize Google's revenue.

"If you put Marriott at the top [over knock-off sites], it's a revenue enhancer that also preserves Google's reputation," he said. "I'm not saying this is good or evil. But I'm saying that calling it good is actually the same as calling it greedy. It's done because it works."

Google, he argues, has created a system that takes bids when no bids are needed. "It can accumulate a cash hoard of tens of millions of dollars while charging companies to buy back their own names and then listing everything in exactly the order it would have been had no one bid at all."

As Clemons points out, it's a genius business model. Unless the DoJ decides it's not. ®

Internet Security Threat Report 2014

More from The Register

next story
Facebook, Apple: LADIES! Why not FREEZE your EGGS? It's on the company!
No biological clockwatching when you work in Silicon Valley
Lords take revenge on REVENGE PORN publishers
Jilted Johns and Jennies with busy fingers face two years inside
Yes, yes, Steve Jobs. Look what I'VE done for you lately – Tim Cook
New iPhone biz baron points to Apple's (his) greatest successes
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
Facebook pays INFINITELY MORE UK corp tax than in 2012
Thanks for the £3k, Zuck. Doh! you're IN CREDIT. Guess not
Ex-US Navy fighter pilot MIT prof: Drones beat humans - I should know
'Missy' Cummings on UAVs, smartcars and dying from boredom
Sysadmin with EBOLA? Gartner's issued advice to debug your biz
Start hoarding cleaning supplies, analyst firm says, and assume your team will scatter
Edward who? GCHQ boss dodges Snowden topic during last speech
UK spies would rather 'walk' than do 'mass surveillance'
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
Three 1TB solid state scorchers up for grabs
Big SSDs can be expensive but think big and think free because you could be the lucky winner of one of three 1TB Samsung SSD 840 EVO drives that we’re giving away worth over £300 apiece.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.