Schmidt did not mention Microsoft by name. Rather he referred to an unnamed large technology company 20 years ago that faced regulatory intervention. He was alluding to U.S. v. Microsoft.
"That company lost sight of what mattered and Washington stepped in," Schmidt said. He insisted that Google has learned the lessons of the antitrust case against Microsoft that concluded in 2001. "We get it," he said.
At issue was whether Google--through its search business and related interests--serves consumers or threatens competition, a charge that Microsoft has been making since 2007 when Google announced its intention to acquire DoubleClick. Since then, as Google has become more dominant and entered new businesses, calls to constrain the company have grown louder.
[Find out more about the search technology that has Google's competitors complaining. See Google Universal Search, A Massive Effort.]
Some regulators already believe that Google has behaved in an anticompetitive fashion: European regulators are in the midst of an antitrust inquiry into Google's search business. The U.S. Federal Trade Commission is doing likewise. The Texas Attorney General is also looking into Google's search business practices, and other state-level investigations may be in the works.
At the hearing, skepticism about Google was well represented. Thomas O. Barnett, a partner at Covington & Burling who has represented TripAdvisor, said, "I consider Google to be a dominant company with monopoly power at least in search and advertising."
Google's competitors argue that the company acts to hinder competition. Jeremy Stoppelman, CEO of Yelp, charged that Google has acted anticompetitively in two ways: by presenting Yelp review content in Google's competing Places service and by favoring its Places service in search results.
Google insists that it plays fairly and has set up a Web page to address the charges against it. But the complaints have already prompted Google to change some of its practices: In response to Yelp's objection to Google's use of its content, Google has complied and no longer shows Yelp content in its Places product.
The charge that Google favors its own content over third-party content is a bit more complicated. The rebuttal Google published online echoes a point Schmidt made over and over in response to claims that Google promotes its own services at the expense of other companies in search results.
"Sometimes the best, most useful answer to a query is one of the traditional 10 blue links,'" Google states. "But sometimes it's a news article, sports score, stock quote, flight times, video, shopping results, or a map--any of which we may place above or among the other results from across the Web. Every search engine has shifted toward providing more answers directly in the search results--because it's what consumers want."
What this means is that Google search results are not purely the product of the Google search algorithm. Rather the search results generated by Google's ostensibly neutral search algorithm get augmented with other links when Google's other algorithms determine an answer can be provided by, say, presenting a Google Maps link. This aggregation of search systems is called universal search.
The way universal search works is not widely understood and makes trying to recognize bias by analyzing the relative position of links on search results pages far more difficult for outsiders. It's simply not clear where algorithmic search results get modified by other universal search factors to generate the final list of links presented to Google users.
In the absence of clarity about where Google search results originate, Google has to confront misapprehensions. For example, Senator Mike Lee of Utah questioned why Google product search ranked third so consistently when product comparison sites did not fare so well on average. Schmidt had to explain that Lee was making an apples-to-oranges comparison.
"In general, what's happening here is product comparison sites being compared against products," Schmidt explained.
Lee appeared unconvinced and insisted Google appeared to be cooking its search results.
"I can assure you that we've not cooked anything," Schmidt replied, evidently unperturbed by the government grilling.
Senator Al Franken later expressed frustration about the lack of transparency around how Google ranks search results. He noted that Schmidt had been asked whether Google's search rankings reflect an unbiased algorithm and that Schmidt replied with less than a certain, affirmative response.
That lack of certainty, Franken said, "really bothers me because that's the crux of this."
Despite the fact that Google's search algorithm is nothing but a collection of biases that attempt to define what's relevant, one possible outcome of the hearing and the related scrutiny about how Google ranks its search results may be an effort to label the source of results in universal search. Just as Google labels sponsored search results, it could label "house" search results, as internal ads are often called.
Asked what Google could to do address complaints, Stoppelman urged the separation of Google properties from algorithmic search links. This would mean the end of universal search as we know it, or at least the extensive labeling of links assembled through universal search.
But not every competitor of Google's wants to see the search company regulated.
"[W]e don't need federal intervention to level the playing field with Google," wrote Rich Skrenta, CEO of search engine Blekko in a blog post. "Innovation and competition are far more powerful instruments to battle companies that have grown powerful and influential. ... The success of Google should be applauded on Capitol Hill, not derided."
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