Lock up the kids, here comes the EU

If you want a sign that Google is past its prime, you got it today: The EU is investigating it for antitrust.

Remember Microsoft: The EU took 11 years investigating it — during which time, the web was born — and by the time it finished in 2004 and brought its mighty hand down upon the mighty Microsoft, the market had already done the job, thank you. Microsoft was a has-been, a joke as a monoplist, a laggard legacy company left behind by new technology, a threat to no one but itself.

Now the EU is going after Google. No surprise. One thing that has surprised me lately is the anti-Googlism (read: anti-Americanism, anti-capitalism) I’ve seen reflected in the nasty rhetoric over Google’s Street View. In my trips to Germany and talks there, I regularly heard that Google is too big (can someone please send me to the statute that defines big and thus too big?) — not too big to fail but too big to live in Europe. I’ve also heard people say they don’t want Google making money on them (but it’s OK for the corner store or the local newspaper to?).

Now the crows come home to roost with this EU investigation. But as Danny Sullivan argues in a wonderfully smart-assed and logical post, the EU is going after this search engine for acting like a search engine. When he searches for cars, Google has the audacity not to point to other search engines. It points to car sites! Bad Google, Bad.

And what if Google does point to its own businesses: YouTube, shopping comparison, Gmail, whatever. That’s business. Yahoo points to Yahoo; I’ve sat in meeting with them back in the early days of the web when they bragged about how they could point their “firehose” at their own stuff. The New York Times points to The New York Times. Microsoft links to Microsoft. So?

Remember that it was Google that created the ethic of search results untainted by business. Its model before that was GoTo/Overture, which *sold* search position. Analysts thought they were nuts — Commies, maybe — when Google decided *not* to tell search position out of some strange sense of ethics.

So now the EU wants to take Google’s own standard and interpret it against Google? Where the hell does this?

Last night, someone said to me something I also hear a lot: that search is a utility and utilities need to be regulated. Europeans reflexively regulate.

But Google isn’t a utility. There are plenty of other, competitive search engines. The fact that Google has 90+% penetration in Europe is the choice of the market, nothing Google did through unfair advantage.

And — shades of the Microsoft case — Google is being challenged now by other means of discovery: namely us sharing links through social means. Google is no longer the all-powerful Oz of the internet. The EU’s timing is impecable.

Now there is one arena in which Google does have much power: advertising. It’s not as effective to market on Bing as it is on Google. And I’ve said before — just yesterday — that I think Google would be wise to establish a Constitution and Bill of Rights and channel of appeal of its decision on advertisers so it cannot be accused of manipulating things behind the scenes through its sole power.

In that sense, Google is not a utility. It is law. And laws require principles and means of appeal. That’s what I said yesterday and what I’ll argue again in this case. Google would be wise to be more transparent about its advertising rules and decisions (not its algorithms but its judgments) and open up that process to trusted outsiders. Google needs a court.

But now the EU is looking to take them to court. Oh, boy.

  • Yano

    Search engines are question answerers not traffic-pumps, and here the EU is investigation whether there should be another step to getting an answer which is ridiculous.

  • Webwombel

    Hard to understand why the EU is suing Google. I don’t like it. I like Google as search engine and I am impressed by the various innovative (lab) services. I also like StreetView.

    But, quote: “anti-Googlism (read: anti-Americanism, anti-capitalism)”. Oh dear. This is dividing, simplifiying and polarization (german: Polarisierung). Is this wise?

    Dear US-citizens, why is every criticism is anti-americanism?

    Smart way of discussing is differenciated discussing.

    Wombel.

    • http://twitter.com/graygoods Gray

      The EU isn’t SUING Google yet, it’s innestigating it. Google has a market share of up to 90% in some markets. That’s more than enough reason to keep an eye on this de facto monopolist. That’s how we do it in Europe. In the US, on the other hand, you let such giants roam freely, without any thoughts about whether this in the interests of the people.

      Well, I prefer the European way. Your mileage may vary, of course…

  • luinil

    the EU received complaints from concurrents of Google that it would use his dominance in the market to advantage it’s services.

    It seems you didn’t understood at all what it’s about. It’s not about proposing the concurrents search websites when searching for cars, it would be when you’re searching for a best price for a car, google would push for it’s service and degrade the others.

    The UE is only investigating if the complaints are true or not. Like it or not, having more than 90% of a market gaves some responsibilities.

    Finally, if the allegations of google’s concurrents are true, it wouldn’t be nothing as you say.

    When I use google, I believe it will give me the best answers corresponding to what I ask it, if the answers it gives me are not the best ones, but the answers that please Google because it’s one of their service, that would mean that Google, as a search engine, as no value.

    ‘Do no Evil’ as they say.

  • http://www.sorin7486.com sorin7486

    wow wow wow slow down there cowboy :). Let’s not get ahead of ourselves. From the article cited above:

    “Complainants, including Microsoft and UK firm Foundem, which is also involved in a US inquiry into Google, allege the company gives “preferential placement” to its own services.”

    So yes the EU is investigating but that’s what they should do when they get a complaint. MS probably filed it in the EU because they know there’s a better chance of succeeding there. But let’s wait until the verdict before drawing any conclusions.

    In my mind there is no reason for Google to be found guilty. I just tried a few searches like “e-mail”… guess what ? Hotmail is the top result. Also for “search engine” you get Bing and Altavista before anything Google. So even though I think antitrust laws are essential, although somewhat ridiculous (but so is capitalism if you ask me), there is no case here.

    Now about the rhetoric against Google, well germans being germans they like their rules so they get angry when rules get changed. Actually so do most people but that’s not the point. The point is THERE IS NO PRIVACY. Or at least there won’t be in the future. If you think the problem is about control then think again (I did). You can’t control information. If you don’t believe me just ask the people that are in the information handling business (media, entertainment, government ?). Once it’s out there you can’t get it back and no law or moral code is going to change that. Not for a media company and definitely not for my neighbour who’s naked pictures I just saw on the web.

    Society just has to adapt to this new reality. We will have to be less judgemental and more honest to make all of it work. So if you get fired because you smacktalked about your job on twitter or facebook it’s either because your boss is hypersensitive to your opinion or because you’re really unhappy and he(she)’s doing you a favour. But what it’s not is the website’s fault.

    What we do need is transparency. But I don’t have to explain why that is. Let’s just say I’m glad this investigation is taking place because even if Google can’t make their algorithm public I’d like someone other than themselves to have a look at it.

    ps: if you still don’t believe my on the “NO PRIVACY” part just ask yourself this: why do the 2 most innovative companies with the biggest impact on the internet both have “privacy issues” ?

  • Hans Suter

    “If you want a sign that Google is past its prime, you got it today: The EU is investigating it for antitrust. ” I want.

  • Stan Hogan

    A quick Google search informs me that Microsoft reported a $5.41 billion profit in its most recent quarter. Google reported just over $2 billion in profits during the same period, one of its better quarters.

    So, though Microsoft may be a failure as a monopoly it is hardly a “laggard legacy company left behind by new technology.”

    • http://www.buzzmachine.com Jeff Jarvis

      Well, then, I wish my Microsoft stock were doing better.

      • http://twitter.com/graygoods Gray

        Any google stock, too, that you may have acidentially forgotten to disclose?

        • http://www.buzzmachine.com Jeff Jarvis

          Why don’t you click on the disclosures link, you lazy ass, before you start casting aspersions.

        • http://twitter.com/graygoods Gray

          WHAT “disclosures link”, you ass? There isn’t any! Searched the text for “disclos”, still no link. Where do you hide it? Is it dynamically created, maybe? I block active code with the “NoScript” add-on, like every security conscious surfer should do!

        • http://twitter.com/graygoods Gray

          Sry for using a profanity. I just tried to adjust to your tone, ok?
          But honestly, I don’t see a link to disclosures anywhere on this page!

        • http://www.buzzmachine.com Jeff Jarvis

          Oh, ferchrissakes, go to the home page of Buzzmachine, look on the right column on the top half of the screen. Voila. There is it. Fucking miracle.

          But I’ll help you out: http://buzzmachine.com/about-me/

          See if you can find Google then.

          And then kindly apologize for casting unfounded taint.

  • Andy Freeman

    > In my trips to Germany and talks there, I regularly heard that Google is too big

    If Google is too big, so is the German govt, not to mention the US govt.

    What? You say that you don’t have a vote wrt Google? Sure you do – you can refuse to do biz with it, so it doesn’t make any money from you. Just try to do that with a govt.

  • Andy Freeman

    > it would be when you’re searching for a best price for a car, google would push for it’s service and degrade the others.

    When you go to an Opel dealer, you never see an ad for Fiats.

  • Andy Freeman

    > Now about the rhetoric against Google, well germans being germans they like their rules so they get angry when rules get changed.

    What rules?

    Seriously – where are the rules for ordering search engine results?

    • http://www.buzzmachine.com Jeff Jarvis

      Right. Google wrote them pretty much.

      • http://www.sorin7486.com sorin7486

        Blah you people didn’t even read my comment… I wasn’t talking about written rules… every society works a certain way… until it doesn’t. And some people always resent when that happens.

        And no Google didn’t write anything. The internet DID. Technology DID. It’s like we’re inventing the wheel all over again every couple of years… or electricity or television. People just can’t keep up. And if it weren’t Google it would of been someone else.

  • paul

    First of all, this is an investigation, nothing has been decided yet.

    Secondly, looking at monopolies and their consequences is a core duty of regulating entities. Even the most conservative republicans would agree to that, because monopoly doesn’t fit with true capitalism, it causes distortion. In Europe Google has a >90% marketshare… Nobody declines that Google has fairly gained that share, but this doesn’t change the fact, that it is a monopoly. And again, investigating monopolies isn’t anti-capitalistic at all, ask any economy expert or academic for better and more literate explanation for this – or try wikipedia http://en.wikipedia.org/wiki/Monopoly .

    Beside all this, I actually agree with you, that this investigation is unnecessary. But your way of arguing is inflammatory. And to use stereotypes, you Americans should stop thinking Europeans are against you by principle.

  • Andy Freeman

    > And to use stereotypes, you Americans should stop thinking Europeans are against you by principle.

    We think it because many of you keep saying that you are. Should we instead assume that those folks are lying?

  • Andy Freeman

    > most conservative republicans

    The argument is actually libertarian.

    I realize that US politics are important to you, but errors like that just demonstrate that you don’t understand it at all. (Here’s another example – neither Bush was actually a conservative. Yes, both were Republicans, but not all repubs are conservatives….) You might want to avoid arguments that depend on such understanding….

    > because monopoly doesn’t fit with true capitalism, it causes distortion.

    Actually, it doesn’t. What causes “distortion” is some methods used to maintain a monopoly, typically involving govt action.

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  • http://2bsharp.blogspot.com 2bsharp

    Great article, always seem to agree with your opinion on these matters. I feel confident that nothing will come of this investigation, but I feel the anti-googlism is real. Whether it is anti-americanism is debatable, but what I feel is the most influential company in the world is American and so whatever they do will be judged with that in mind.

    The description of the case itself sounds like a joke. If you think google has an unfair advantage, it’s simply because they do it better than you. I argued the same in the Microsoft case and the google case has an even lower entry cost to developers and lower switch cost to consumers. That is the absolute beauty of the internet, everyone is just one great idea away from toppling the industry leaders.

  • Brenden

    “I regularly heard that Google is too big”

    Well I think Europe is too big! Bring back the boom gates! Build the walls and stop free travel and let’s not forget the moats and draw bridge to protect us from the dragons!

    Seriously, big should not be a part of the equation. Why can’t people do good thing and be successful? As long as they act ethically and hold themselves accountable what’s the problem?

  • JohnUK

    Whilst there may be some question as to the validity of this EU’s claim I feel that we cannot under estimate the extent to which Microsoft feel threatened by Google. There reducing some of MS key product margins and there’s not a whole lot that MS can do other than try to slag Google off. The EU commission being a means to achieve this and this is evidenced by Danny’s article who pointed out that two of the three companies who filed the complaint have strong ties to MS! There’s another point too which is that MS are key losers in this battle but so are the IT industry as a whole (referring to Google Apps) as this takes revenue away from smaller IT companies and puts it with the multitenant vendors (Google and MS). And cos MS have been in the enterprise game for longer they have more experience in marketing strategy as well as 8 times as many channels partners. All of which means that MS (and partners) can and should, if they’ve got the heads screwed on right – they need to protect their profit margin, make every effort to slag Google and Google Apps off or better yet, hurt Google where MS are failing in every other way: search.

  • http://www.epenis.de Marcel

    well, nice superficial anti-european rant here. maybe you should first get some information on why the european commision is doing what it is doing: because they received complaints by google’s competitors. the european commision has to react then. meaning they have to conduct a investigation. nothing more, nothing less.

    criticism against google equals anti-americanism? really, wtf dude? and i don’t agree with a lot of the criticism against google…

  • http://www.riseofthecenter.com/ Solomon Kleinsmith

    What planet do you live on?

    Microsoft is a has been? What percentage of new computers come packaged with Windows again?

    • chadwick

      I agree, and with things like the xbox360 I am sure Microsoft is not going anywhere soon. Why cut down one company to prop another one up.

  • Andy Freeman

    > maybe you should first get some information on why the european commision is doing what it is doing: because they received complaints by google’s competitors.

    Does the european commission always investigate when it gets a complaint?

    I ask because many people and organizations can generate a very large number of complaints against almost anyone. If receiving a complaint is all it takes to trigger an investigation….

    • http://twitter.com/graygoods Gray

      Yes. But very often nothing comes out of it.

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  • Lennart

    I’m European and Belgian (for the time being ;-) )
    Unfortunately I have to agree with your post. I would prefer to see EU investing real money in enterpreneurship instead of wasting money on this.
    Comparison with microsoft case? No, I don’t this so. I’m convinced this will lead to nothing.

  • http://interculturaldialogueandeducation.wordpress.com/ timothyjonesiswriting

    Hi, I read the Google book, great, thanks, leanred a lot.
    But…how can I get Google to listen to me???? I signed up and paid for a domain through Google Apps with Go Daddy and cannot connect to this, and Google are not responding on support page or any other way?
    Am I the only person Google ignore, or is it general?
    I’m hoping Google persons read your comments, because they
    certainly don’t read mine…

  • http://www.smokingweedblog.com Deimantas

    …”Google needs a court”

    I like that part! This is wonderful article and no matter how frustrating it is to hear these thing I just have to agree with it.

    There could be never ending discussions about google and the way they work. I must say that google is doing really good job in general terms of search engine. But sometimes even simple people like me can find trouble searching for something and it seems that google making more effort on other things totally forgetting about purpose of search engine. Of course I understand that at the end of the day it is all about money – but they have more than enough!

    Anyway I am not going too deep in this. Just to cheer you all up I will place this link from you tube. I think it is relevant to this article. It is funny but sad at the same time…

    http://www.youtube.com/watch?v=ZGwYrZLvvJU

    Have fun !

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