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Keep Regulators Away from Google
Posted on January 24th 2014
Keep regulators away from Google
A consumer watchdog group is calling for increased regulation of Google under federal antitrust law. I feel that is unwise. It would punish risk taking. It would cripple a U.S.-based company. That company has found a way to reach success despite heavy governmental burdens. Here's the original letter at Consumer Watchdog. I am responding to a paragraph on page 3, which calls for:
Google’s search engine’s importance as a gateway to Internet requires a maximum degree of openness and transparency. Google’s monopoly position and importance to the Internet means that the company should be closely regulated like a public utility. Regulations should be designed to open up Google’s ad platform to enable other competitors to compete. Rules should be crafted to create greater transparency in the operation of Google’s ad platform to enable parties to negotiate more effectively. For example: Providing greater visibility into the maximum amount of the highest bid, how many search terms are shown per page, and how Google’s “quality score” is derived and applied. Little, if any, of this information is currently public and openness would contribute to consumer choice and options as well as foster competition.
Response to …monopoly position
Google does not have a monopoly. Other search engines exist. They compete against Google for market share. Some of the big names are Yahoo, Microsoft Bing and Ask. This view that Google has a monopoly position is wrong. Google, however, has a dominant position. That was achieved in the marketplace.
Response to …closely regulated like a public utility
I understand why power companies and railroads should be treated as public utilities, Google is not in that category. Power companies rely on local monopolies to help them remain in business. I buy gas and electricity from California’s Pacific Gas and Electric. They are not the only electricity provider in California. They have, however, been granted a local monopoly. They provide electricity in my county. They transport it across power lines running through my back yard. The local monopoly (franchise) helps ensure they have enough customers and demand to remain in business. They should be regulated like a public utility. That’s what they are.
Google is not a public utility. It should not be viewed as one. Google does not operate on government-owned land. They do not need locally-sanctioned monopolies to help them stay in business. In fact, Google is not the first search engine to become prominent. I remember visiting Yahoo and AltaVista when searching the Internet. This was before finding Google. Google did not need government handholding to grow. Google did not need locally-sanctioned monopolies to remain in business. The power companies cannot make that same claim.
In response to the Consumer Watchdog’s letter, I say: nonsense. Google was not the first in their profession. They have become dominant because they have a superior product. They did an impressive job promoting it. Let the marketplace determine Google’s influence.