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Thursday, September 22, 2011

Google defends business practices before Senate.

USA Today
by Scott Martin
Sept 22, 2011

Google Executive Chairman Eric Schmidt was on the hot seat Wednesday at a Senate antitrust hearing as CEOs and senators accused Google of abusing its dominance in Internet search to the detriment of smaller rivals.

Schmidt defended Google's business practices, asserting that his company "does nothing to block access to any of the competitors and other sources of information in Web searches." He opened his remarks with a reference to the Microsoft antitrust case, which nearly broke up that software company. "Many of us in Silicon Valley have absorbed the lessons of that era," he said.

Google defends business practices before Senate.

His remarks landed on a cross section of senators who either praised or probed Google's business. Cozen O'Connor antitrust attorney Melissa Maxman said that was a good tone for Schmidt to hit. "It's the smart way to present it because the Microsoft inquiry didn't go all that well."

Sen. Mike Lee, R-Utah, launched some of the sharpest attacks on Google, charging that it has a "clear and inherent conflict of interest" in its search results.

Yelp, TripAdvisor, Nextag, Expedia and dozens of other companies say Google — which operates rival services such as travel and shopping search — gives preferential treatment in Internet search queries to its own businesses. "Google rigs those results," Nextag CEO Jeffrey Katz said at the hearing.

Yelp CEO Jeremy Stoppelman said, "Let's be clear: Google is no longer in the business of sending people to the best destinations on the Web. It has everything to do with generating more revenue."

The inquiry put the spotlight on Google's behavior and whether it harms competition. That issue will be closely scrutinized in the months ahead by the Federal Trade Commission, which in June launched a separate antitrust investigation of Google. The Justice Department and European Union are also examining Google, which has two-thirds of the Internet search market, trailed by Yahoo and Microsoft's Bing.

John Mayo, a professor at Georgetown University's McDonough School of Business, says, "This will come down to the same issues as the Microsoft case: Is the firm's behavior pro-competitive or exclusionary?"

Google came prepared for its date with Washington. It has ramped up its lobbying presence in the nation's capital, hiring 13 lobbyist firms since June 1, according to CQ MoneyLine.