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The Simple Error That Blew The Government's Case Against Google
The FTC ended its 20-month antitrust investigation into Google with a slap on the wrist – a gentle one.
Some Google critics are upset about this and say Google only got away with such a light punishment because the FTC blew its case.
According to a story by Edward Wyatt in the New York Times, these critics say the government screwed up when it built its case around the question of whether Google's near monopoly of Web search hurts consumers.
They say the FTC should have asked whether Google's massive market share in Web search hurts the businesses that buy Google search ads.
At issue were changes that Google made in recent years to its popular search page. Google makes frequent adjustments to the formulas that determine what results are generated when a user enters a search. Currently, it makes more than 500 changes a year, or more than one each day.
Users rarely notice the changes in the formulas, or algorithms, that generate search results, but businesses do. If a change in the formulas causes a business to rank lower in the order of results generated by a search, it is likely to miss potential customers.
What customers are now seeing reflects changes in the format of Google results. For certain categories of searches — travel information, shopping comparisons and financial data, for example — Google has begun presenting links to its own related services.
Ultimately, Google won over the FTC by showing that consumers preferrred Google search pages that included links to Google products at the top.
Meanwhile, the FTC didn't pay any attention at all to the fact that these search results pages featuring Google products pushed free links to competitors down the page. This move down the page costs competitors traffic. They make it back up the page only by buying more ads. Because they have to buy more ads, they have to charge consumers more.
Anyway, that's what critics of the FTC have to say.
Others (like me) say if you want to see Google's monopoly weakened, wait a few years.
Silicon Valley startups, Microsoft, Apple, Amazon and as-of-yet unnamed companies are pouring billions of dollars into the project.
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