Consumer Watchdog: break up Google “monopoly”
A US consumer group has called on the Department of Justice (DoJ) and the Attorney General to investigate Google under anti-trust laws.
In a letter sent to both authorities and the Federal Trade Commission (FTC), Consumer Watchdog advocate John Simpson called on them to break up the search giant, claiming it exerts monopoly power over the market.
“The DoJ and FTC have taken a reactive approach to Google’s activities,” he wrote, highlighting the investigations into the proposed Google Books deal and the planned $750 million acquisition of AdMob. “However, the time has come to actively restrain Google’s broader ability to abuse both users and advertisers.”
The reality is that for many small online vendors Google is the only way to develop traffic to their services. Google’s dominant search position allows it to charge high ad prices and it uses these monopoly revenues to subsidise its other lines of business
He said the huge share of the search market it held (85.75% global share according to NetApps) gave it far too much control over people’s access to the internet.
“Google is the gateway to the internet. How it tweaks its proprietary search algorithms can ensure a business’s success or doom it to failure. Google’s business practices to maximise its profits determine much of the internet experience for most consumers by determining what they view.
“The reality is that, for many small online vendors, Google is the only way to develop traffic to their services. Google’s dominant search position allows it to charge high ad prices and it uses these monopoly revenues to subsidise its other lines of business.”
He added the way in which Google uses its free services to advertise and push forward its other ventures meant it shut other firms out from the market, stifling competition.
Simpson said courses of action which the DoJ could take included “breaking Google into multiple separate companies or regulating it as a public utility”. He added that by breaking up the firm along its lines of business, it would weaken its monopolistic hold.
The ongoing battle
Google has fought an ongoing dispute with consumer groups both in the US and Europe over its practices. In response to Simpson’s letter, a spokesperson from the firm said: “We totally understand that with size and success comes scrutiny. Although given their track record, even if we broke Google in half tomorrow, Consumer Watchdog would probably insist that we split halves into quarters.”
In previous months, the groups have clashed over Google’s troubles in China and its release of the Google Dashboard, a system for users to monitor the information stored on their various Google accounts. While US groups praised Google’s exit from China, the spokesperson said Watchdog claimed it “did it for the wrong reasons”. In addition, the release of the Dashboard was branded as “flawed” and “not really transparent”.