Google-Yahoo Antitrust Hearings Come Up Tilt

Google and Yahoo went two heavyweight rounds with Microsoft July 15 as both the U.S. House and Senate waded into the proposed advertising partnership between Google and Yahoo. In hearings in both chambers, misstatements, half-truths and general mud slinging were the order of the day.

And that was just in the shallow end of the antitrust pool, which is the only place where Congress feels comfortable. As political theater, it was superb. As for fact-finding, it was a bust. Add the two together and you get a typical congressional hearing.

Microsoft, which has been trying to acquire Yahoo all summer, played the aggrieved party, arguing that a combination of Google and Yahoo would give Google 90 percent control of the search market. In fact, Microsoft General Counsel Brad Smith proclaimed that the deal would "make Google bigger than any newspaper chain or any television network and provide Google the largest concentration of advertising control in history."

"Gee, I never felt so sorry for poor little Microsoft," said House Judiciary Chairman John Conyers.

In a morning session with the Senate, Smith just happened to drop that Yahoo CEO Jerry Yang told him just days before the deal went down that a Google-Yahoo partnership would be the end of both Yahoo's and Microsoft's days as a major search player. Yahoo General Counsel Michael Callahan first objected to Smith's characterization of Yang's comments and then, well, he didn't recall the remark at all.

Smith's statement so startled Sen. Herbert Kohl, chairman of the Senate Antitrust Subcommittee, that he reminded Smith he was under oath.

Google and Yahoo, for their part, were not shy about reminding lawmakers about Microsoft's own inglorious antitrust problems and pointed out that Microsoft currently controls more than 90 percent of the desktop operating system market share, more than 95 percent of the productivity apps market and 80 percent of the browser market.

"While it's easy to imagine using a different search engine -- others are just one click away, and millions of people use different search engines every day -- Microsoft has locked consumers into its PC-based software monopolies," stated Google's top lawyer, David Drummond.

As for advancing the issue one inch either one way or another, lawmakers did little, merely asking talking point questions, which is what they do best. Despite all the flap July 15, don't expect Congress to ultimately have much to say about the deal. Over the last few years, lawmakers have remained silent as the Department of Justice rubber-stamped the mergers between AT&T-BellSouth, Verizon-SBC and Verizon-MCI mergers, not to mention the Google and DoubleClick deal.