Google Isn't Dominant: Schmidt ... Really?
Google Executive Chairman Eric Schmidt's answers to questions in the wake of the Senate Judiciary Antitrust Subcommittee failed to satisfy the majority of Congressmen on Capitol Hill, so they sent him plenty more in writing.
This one, from Sen. Richard Blumenthal, stands out:
Mr. Schmidt, your company is overwhelmingly dominant - it really has only one rival, and that rival is losing incredible sums of money each year. Given the tremendous market power of your company, do you believe it's fair to characterize Google as a monopoly?
I remember vividly watching the hearings via C-Span online and being surprised when Schmidt admitted that Google's size in search put it in the area of being a monopoly. He said that on record and I appreciated the candor, which I thought could help alleviate some of the distrust politicians and others have in the company.
But now I read in his response to questions to the senators something that looked like it was written by attorneys:
First, I would disagree that Google is dominant. By investing smartly, hiring extremely talented engineers, and working very, very hard (and with some good luck), Google has been blessed with a great deal of success. But given the rapid pace of change in the technology industry, we take nothing for granted. As I acknowledged during the Committee hearing, Google is "in the area" of 65% of queries in the U.S., if you look only at Google's general search competitors, such as Microsoft's Bing and Yahoo!. In fact, we find that the monthly general search query figures released by comScore and Hitwise don't reflect the reality of how many sites Google competes with in search. Google has many competitors that are not general search engines, including specialized search engines, social networks, and mobile apps. So inferirng that Google is in any way "dominant" in search would be incorrect.
Oh. My God. Really?
You can't offer that response after already saying that Google's size put it in the area of being a monopoly and hope to slip it by people. You just can't. What the lawyers did was alter the response and the frame of the question.
Schmidt wasn't asked whether Google was in the monopoly area if you look at the Web search giants, but now the lawyers are twisting
To anyone who watched the hearing, it comes off as a terrible lie, because Google has essentially taken the definition of the search market -- i.e. versus Bing, Yahoo, etc. -- and stretched it to incorporate several more sources not included in comScore, et al.
With 65 percent U.S. search share and much more overseas, Google is a monopoly by the definition of the rules in our country and in Europe.
I was less bothered by Schmidt saying Apple and Facebook are rivals, whereas he said they weren't in September 2010.
Understand that there was no Google+ to challenge Facebook at that time, and Android wasn't as nearly powerful in September 2010 against Apple and other platforms as it is now.
Moreover, Siri does make Apple a little more compelling in mobile search, so I think it's fair for Google's counsel to mention Apple as a more intense rival now. "Similarly, Apple's Siri is a significant development--a voice-activated means of accessing answers through iPhones that demonstrates the innovations in search."
Though I would note how he couldn't bring it up at the hearing because Siri didn't launch on the iPhone 4S until three weeks after the hearing.
But Schmidt should not be saying Google isn't dominant, not after admitting Google's size under oath. Lawyers like to play with language, but they should have left that one alone and answered it consistent with Schmidt's response that day.
Under oath, there are no take-backs, and now all Google has done has given anti-Google advocates like Consumer Watchdog and FairSearch more ammunition. Indeed, FairSearch.org characterized the responses as such:
Google Chairman Eric Schmidt continued today to thumb his nose at Senators' concerns about how Google exploits its monopoly power in its business practices, contradicting in his written answers Google's stated business policies and his own testimony at the hearing. ... Google's denial of its own monopoly power is not only laughable, but proof that the Senate and federal, state and international law enforcement agencies must continue to search for the truth about how Google uses its enormous power to advantage itself and hurt competitors trying to reach consumers on the Internet.
I think Schmidt's original statement was candid, but this written response is lawyered up -- the monopoly word is such a loaded one and carries with its such a massive freight and consequence that any time it comes up, Google's counsel wants to make the market definition of search rivals and competitors as nebulous and widespread as popular.
Think of it as expanding the fences at a Major League ballpark to give pitchers better opportunities at defense.
How far will that rabbit hole go? If my wife loses her keys and I help her search for them, could Google consider me a competitor? Seriously, because that's where Google is headed. Good luck with that argument.
Whatever, it's still good theater.