Web Monopoly: Could the Government Break Up Google?

Will the Government Break-Up Google?

Posted by  Thursday, June 23, 2011 at 2:28 pm
2 Comments • Related Topics: 
Illustration by Alexander Ho for TIME

The power of Google to determine what information we see, and when, is enormous. Apparently, the government is worried Google has abused that power.

The Federal Trade Commission is on the verge of opening a formal civil investigation looking into whether Google has stifled competition on the web. The FTC has been unofficially watching Google’s business practices for months. So far, it seems, the anti-trust watchdog doesn’t like what it sees. The Wall Street Journal says the FTC is about to issue subpoenas to Google to get more information. It has also talked to a number of competitors of Google, who I am sure will be more than willing to demonstrate why the search giant is far too powerful.

(PHOTOS: A History of Google Doodles)

It is only the latest probe into Google’s practices. Back in December, TIME.com’s own Techland covered the growing claims by competitors that Google’s search results favored the company’s content over others. The European Union has its own team of investigators looking into anti-trust violations. And a Senate subcommittee is drawing up plans for a hearing. The subcommittee chairman is considering hauling CEO Larry Page and Chairman Eric Schmidt to Washington for a Wall Street like grilling.

It is clear that Google has a tight hold on the Internet. And that has been clearer than ever in the past year. The New York Times has run a number of stories showing how companies have been able to boost their sales by gaming Google’s search algorithms. When Google changed its algorithm, those sites fell off the search page, basically hiding them from the world. The stories also showed what lengths companies will go not to cross Google, and what they do to try to make up. If that’s not a sign of monopoly I don’t know what is. And that’s  just the search side of the business. Google’s power in the advertising side of its business is even more troublesome. If you are a small company and Google won’t take your advertisement, you basically can’t market your wares on the web, at least not to any sizable audience.

(PHOTOS: Life in the Googleplex)

That being said if the government does end up suing Google, it won’t be an easy case. Monopolies, surprisingly, are allowed in American business. They are just not allowed when they use their power to hurt competitors. That might be a hard case to prove. Can you name another business Google has come to dominant like search and advertising? It’s doing very well in smartphones with Android, but I’m not sure you can connect the success there back to its search engine. Google’s own phone was a flop. Perhaps, gmail, maybe. Another question: Is Google Too Big To Fail? I would think that the government would weigh the impact on web business and the economy in general if Google were to be broken up. Still, anti-trust investigations can be really taxing on companies. Even if they aren’t charged, Google will have to carefully evaluated all of its moves in the next year or so to make sure there is nothing that it’s doing that seems anti-competitive. That means not entering some businesses that Google normally would or at least charging as hard into them. The web is changing all the time, and anti-trust investigations takes year. Google is sure to fall behind. Microsoft has really never been the same since the government put it in its cross hairs. And IBM took years to recovery, and basically had to become a totally different company in order to survive. Google may have to change as well.

 

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