Google's Schmidt to Testify at Senate Antitrust Hearing
Former Google CEO and current Executive Chairman Eric Schmidt has agreed to testify before the Senate Judiciary Committee's antitrust subcommittee in September, a move to address concerns that the search engine has grown too powerful online.
The move is a necessary backtrack from the world's most powerful search engine, which is facing increasing scrutiny by politicians and regulators, including Senate and Congress members, the Federal Trade Commission, and the Justice Department.
U.S. senators Herb Kohl, D.-Wis., and chairman of the Senate Subcommittee on Antitrust, Competition Policy, and Consumer Rights, and Mike Lee, R-Utah, in a June 10 letter asked Google to send either Schmidt or current CEO Larry Page to testify at the hearing.
Google (NASDAQ:GOOG) said it would instead send Chief Legal Officer David Drummond, who has been with the company for years and in 2007 testified before the committee regarding Google's DoubleClick acquisition and other matters.
This decision didn't sit well with Kohl or Lee, who didn't want the hearing take the tenor of legal issues. The senators suggested they might subpoena Schmidt or Page to force them to testify on Capitol Hill. That step was averted by Google July 8.
"We look forward to Eric Schmidt's participation at our Antitrust Subcommittee hearing in September," said Kohl about the session, for which no date has been set. "This will allow us to have a truly informational and thorough public hearing."
Google explained its reason for the change of heart thusly: "Senators Kohl and Lee expressed a strong desire to have our executive chairman appear in front of the subcommittee, and we're happy to accommodate them," a Google spokesperson told eWEEK. "We appreciate their willingness to work with us to make it happen this fall."
A source familiar with the situation said the fact that the hearing was pushed to September also made it easier from a scheduling standpoint for Schmidt, who travels the globe frequently as the public face of the company and to broker deals.
Once the Senate threatened Google with a subpoena, there was little chance Google would not acquiesce to the Senate's demands to see Schmidt or Page in court. A subpoena--in which someone is forced by law to appear in court to testify under oath--is exactly what the company doesn't need right now.
Google needs to appear as cooperative as possible because it is already facing a formal antitrust inquiry from the FTC independent of the Senate Judiciary Committee.
The FTC is looking into complaints from Microsoft, Expedia (NASDAQ:EXPE), Yelp, TripAdvisor and other bit search players that Google unfairly leverages its power by subverting their rankings in search results in favor if its own. Google faces similar charges in Europe and from the U.S. attorney general in Texas.
The agency, which negotiated with the Justice Department to investigate the matter, will also look at the way Google treats its search ad customers.
The Senate Subcommittee sessions could set the tone for the FTC's investigation, which could take a year or more. Most legal experts believe Google will not face formal charges for violating antitrust acts pertaining to deceiving users or engaging in unfair trade practices.
At the least, the investigation will keep Google more honest than it ever dreamed under its "Don't Be Evil" motto.