Wisconsin’s Herb Kohl on Monopoly-Busting Google

This just in…
Herb Kohl’s office released this press release yesterday. Below are excerpts from his Opening Statement Of U.S. Senator Herb Kohl For The Of Hearing, “The Power Of Google: Serving Consumers Or Threatening Competition?”

“The basic premise of Google at its founding was that it would build an unbiased search engine — that consumers would see the most relevant search result first, and that the search results would not be influenced by the web page’s commercial relationship with Google. Its goal was to get the user off Google’s home page and on to the websites it lists as soon as possible. As Google’s co-founder and current CEO Larry Page said in 2004, “We want you to come to Google and quickly find what you want. Then we’re happy to send you to the other sites. In fact, that’s the point.”

However, as Internet search has become a major channel of e-commerce, Google has grown ever more dominant and powerful, and it appears its mission may have changed. For the last five years or so, Google has been on an acquisition binge, acquiring dozens of Internet-related businesses, culminating most recently with its proposed acquisitions of Motorola Mobility and Zagats. It now owns numerous Internet businesses, including in health, finance, travel, and product comparison. This has transformed Google from a mere search engine into a major Internet conglomerate. And these acquisitions raise a very fundamental question — is it possible for Google to be both an unbiased search engine and at the same time own a vast portfolio of web-based products and services? Does Google’s transformation create an inherent conflict of interest which threatens to stifle competition?

In the last few years, Internet businesses that compete with Google’s new products and services have complained that Google is now behaving in a way contrary to free and fair competition. They allege that Google is trying to leverage its dominance in Internet search into key areas of Internet commerce where it stands to capture from its competitors billions of dollars in advertising revenue. Rather than fairly presenting search results, these critics claim that Google has begun to subtlety bias its search results in favor of its own services. This conduct has the potential to substantially harm competition for commerce on the Internet, and retard innovation by companies that fear the market power of Google.

Antitrust scrutiny is not about picking winners and losers, but is about fostering a fully competitive environment so that consumers can fairly pick winners and losers. As more and more of our commerce moves to the Internet, it should be the highest priority of antitrust policymakers that the Internet remains a bastion of open and free competition as it has been since its founding. We need to protect the ability of the next Google to emerge, the next great website or application being developed in a garage in Silicon Valley or Madison, Wisconsin.”

I’m glad our legislators are looking into this subject. I’ve long thought that Google is the ‘new Walmart’, but I’ve been hesistant to say anything. (Google controls my SEO). As you know, I’m always on the side of small and medium-sized businesses. I think Mr. Kohl, once again, has taken the lead on a difficult, but timely subject. What do you think?