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Ganging up on Google

Ben Woodhead (MIS Australia) | May 20, 2009
The search engine's phenomenal growth is matched by a growing chorus of criticism.

Those things include Google's "Don't be evil" pledge, which was enshrined in the prospectus for its initial public offering. The company also states that its "mission is to organise the world's information and make it universally accessible and useful".

They are pledges that Google believes it has followed, but some actions - such as its intense secrecy, its reluctance to destroy data it collects on web surfers and the way it bowed to Chinese government censorship demands - have raised eyebrows.

Also hanging over the company is the appointment by US President Barack Obama of lawyer Christine Varney as assistant attorney-general for antitrust in the Justice Department. As a federal trade commissioner in the 1990s and then as counsel for Netscape Communications, Varney lobbied heavily for antitrust action against software behemoth Microsoft on the grounds it was abusing its market power.

Speaking at an AAI conference last year, before her appointment to the Justice Department, Varney raised the prospect that Google was the Microsoft of the day.

"For me, Microsoft is so last century," she said.

"They are not the problem.

"I think we're going to continually see a problem, potentially, with Google, who I think so far has acquired a monopoly in internet online advertising lawfully.

"Now, I think you're going to see the same repeat of Microsoft. There will be companies that will begin to allege . . . that Google is discriminating, that it's not allowing their products to interoperate with the Google products."

Varney added to the heat this week when she announced that the Obama administration had withdrawn a Bush administration report that had advocated a hands-off approach to regulating dominant players.

The lessons of Microsoft's bitter, ill-handled antitrust fight aren't lost on Google, and the company's top in-house antitrust lawyer, Dana Wagner, recently told BusinessWeek that Microsoft "didn't take its critics seriously enough".

From the moment last year when Google drew the attention of the Justice Department's antitrust division over a proposed advertising partnership with Yahoo!, the search company has stepped up its efforts to lobby politicians in Washington and burnish its image as a friend of competition.

"Google is reaching out to everyone to be open and transparent and to show the benefits of what they do generally," says Foer.

"Whereas the Microsoft case was warfare, this whole situation is much more restrained and directed by public relations more than by battlefield generals. At least, that's the way it's coming across.

"Does that matter in the long run? Well, we could find it's a company that's much more willing to compromise than Microsoft was."

Last year Google moved away from the planned Yahoo! deal when criticism became too intense, but Schmidt has so far refused to yield in another brewing scandal that involves his role as a director on Apple's board.

 

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