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Fact-checking Google’s Public EC Competition Defense
Submitted by Scott Cleland on Sun, 2014-09-21 19:44
Google Chairman Eric Schmidt recently blogged to refute an EU newspaper ad “arguing that Google is too dominant and that we favour our own products.” Mr. Schmidt then said: “I wanted to ensure that people have the facts so they can judge the merit of the case themselves.”
Let’s check Mr. Schmidt’s main assertions of fact here, to determine if they are indeed “facts,” or if they are deceptive half-truths at best? To truly “judge the merits” of this case, one needs to know the truth, the whole truth and nothing but the truth about his public representations.
1. Google: “We built Google for users, not websites.”
That may have been how Google was originally “built” by its academic co-founders in 1998, but it is not how Google has been “operated” as a commercial enterprise since Google introduced AdWords in 2000, and since the company went public in 2004.
Since 2000, Google’s true “customers” have been advertisers, who have always generated most all of Google’s revenues. Google’s users are not their customers, but the “product” that Google sells to advertisers. As for websites, they are Google’s revenue-sharing “partners,” and earn over ten billion dollars a year assisting Google in tracking and packaging users for advertisers.
How was Google built in 1998?
In a famous 1998 research paperGoogle co-founders Larry Page & Sergey Brin wrote: "…we expect that advertising funded search engines will be inherently biased towards the advertisers and away from the needs of the consumers. Since it is very difficult even for experts to evaluate search engines, search engine bias is particularly insidious." … "…we believe the issue of advertising causes enough mixed incentives that it is crucial to have a competitive search engine that is transparent…"
Now how has Google been operated since 2000?
Concerning the transparency of Google’s search engine, Google’s head of search quality, Udi Manber, explained: “For something that is used so often by so many people, surprisingly little is known about ranking at Google. This is entirely our fault, and it is by design. We are, to be honest, quite secretive about what we do.”
Consider how Google Chairman Eric Schmidt publicly explained Google’s business in 2006 per ZDNet: “Ultimately our goal at Google is to have the strongest advertising network and all the world’s information.”
And consider how Jonathan Rosenberg, Google Sr. VP explained in 2008 how users effectively were Google’s product: “Users go where the information is so people bring more information to us. Advertisers go where the users are, so we get more advertisers. We get more users because we have more advertisers because we can buy distribution on sites that understand that our search engine monetizes better. So more users more information, more information more users, more advertisers more users, it’s a beautiful thing, lather, rinse, repeat, that’s what I do for a living. So that’s … the engine that can’t be stopped.”
Google deceptively implies that because they provide real value to users in finding the information that they seek, that they operate with users’ best interests in mind. They don’t. Google’s clear financial interests are to maximally invade users’ privacy in order to best target ads to users, and to influence users’ behavior in the way Google’s advertisers’ want.
If Google was indeed the “competitive search engine that is transparent” that Google’s founders warned was necessary in 1998, rather than operating as a secretive anti-competitive search engine, the current Google problem would be less.
However, to gain users’ trust, Google deceptively claims that they work for users when they don’t, and that their search results are designed to be objective, unbiased, and in the best interests of users, when in fact they are designed financially to promote Google content over competitors’ content, and to present search results to users that often are actually ads unbeknownst to many users.
2. Google: “It’s not the case that Google is the gateway to the Internet.”
Both Google and the EC know Google has >90% share of search in Europe.
Google also is the only entity in the world with a “mission to organize the world’s information.”
And Google touts itself as the most-used provider of Internet search, video, mobile, mapping and browser services in the world, many of the main Internet functions that people online use.
If all this does not make Google effectively Europe’s “gateway to the Internet,” then who does Google claim is Europe’s “gateway to the Internet” if not Google?
And if there is no primary European “gateway to the Internet,” how have most European users been accessing all that the Internet offers these past years.
3. Google: “Nor is it true that we are promoting our own products at the expense of the competition.”
The EC’s original Statement of Objections determined that Google was doing just that -- diverting traffic from competitors to itself.
In effect, this blanket public statement that Google does not promote Google’s products over others in its search rankings is a direct affront to: the core competency of the EC’s investigation; the EC’s current draft Statement of Objections; and the intelligence of the public.
Does Google think that people cannot simply “google” it and learn that Google promotes its own products over competitors?
“Google” “maps” and Google Maps ranks first.
“Google” “video” and YouTube or Google videos rank first.
“Google” “news” and Google News ranks first.
“Google” “finance” and Google Finance ranks first.
Long ago when Google decided to develop and offer virtually every type of major product or service on the Internet -- in competition with the companies that Google routinely ranks in search based on its unique search knowledge of what consumers most search -- Google chose a profoundly-conflicted business model where Google has an inherent powerful financial and business conflict to create and promote Google products over competitors’ products.
In sum, Google’s main public representations of “facts” here are easily proven to be highly suspect, if not demonstrably untrue.
It should not be surprising that after long misrepresenting to the public that Google has been fully cooperating with EC authorities on competition, data protection, tax, and intellectual property matters, when it knows full well that it has not, that Google would persist in baldly misrepresenting the “facts” and “merits” of the EC-Google competition case.
As the old adage goes, a leopard cannot change its spots.
Google Unaccountability Series
Part 0: Google's Poor & Defiant Settlement Record [5-1-12]
Part 1: Why Google Thinks It Is Above the Law [4-17-12]
Part 2: Top Ten Untrue Google Stories [5-8-12]
Part 3: Google's Growing Record of Obstruction of Justice [6-21-12]
Part 4: Why FTC's $22.5m Privacy Fine is Faux Accountability [7-12-12]
Part 5: Google's Culture of Unaccountability: In Their Own Words [8-1-12]
Part 6: Google Mocks the FTC's Ineffectual Privacy & Antitrust Enforcement [8-10-12]
Part 7: An FTC Googleopoly Get Out of Jail Free Card? [8-30-12]
Part 8: Top Lessons to Learn for Google Antitrust Enforcers [9-14-12]
Part 9: Google Mocks EU and FTC in Courting Yahoo Again [9-26-12]
Part 10: FTC-Google Antitrust: The Obvious Case of Consumer Harm [11-25-12]
Part 11: Why FTC Can't Responsibly End Google Search Bias Antitrust Investigation [11-27-12]
Part 12: Oversight Questions for FTC's Handling of Google Antitrust Probe [11-30-12]
Part 13: Courts Not FTC Should Decide on Google Practices (The Hill Op-ed) [12-10-12]
Part 14: Troubling Irregularities Mount in FTC Handling of Google Investigation [12-17-12]
Part 15: Top Ten Unanswered Questions on FTC-Google Outcome [1-3-13]
Part 16: Top Takeaways from FTC's Google Antitrust Decisions [1-7-13]
Part 17: Google's Global Antitrust Rap Sheet [1-31-13]
Part 18: Google's Privacy Words vs. its Anti-privacy Deeds [3-8-13]
Part 19: Google's Privacy Rap Sheet Updated - Fact-checking Google's Privacy Claims [3-13-13]
Part 20: DOJ & FTC Report Cards [4-12-13]
Part 21: The Evidence Google Bamboozled EU Competition Authorities [4-19-13]
Part 22: EU-Google: Too Powerful to Prosecute? Problems with Enabling Google [5-1-13]
Part 23: Google's proposed EU Search Bias Remedies: a Satire [5-17-13]
Part 24: Google's Antitrust Rap Sheet Updated [5-27-1}
Part 25: Is This the Track Record of a Trustworthy Company? See Google's Rap Sheet [6-6-13]
Part 26: Top Questions as DOJ-Google Criminal Prosecution Deadline Approaches [7-12-13]
Part 27: The Evidence Google Violated the DOJ Non-Prosecution Agreement [8-8-13]
Part 28: Implications of EU Ruling Google Abused its Search Dominance [9-27-13]
Part 29: Google-YouAd is a Deceptive and Unfair Business Practice [10-24-13]
Part 30: EU's Google Antitrust Problems Not Going Away [12-16-13]
Part 31: How the Google-EC Competition Deal Harms Europe [2-10-14]
Part 32: Open Letter to European Commissioners to Reject EC-Google Settlement [2-16-14]
Part 33: Google’s Extensive Cover-up [2-25-14]
Part 34: An Open Letter on Google’s Opposition to Distracted Driving Legislation [2-27-14]
Part 35: Google’s Widespread Wiretapping [3-20-14]
Part 36: The Growing EC-Google Competition Settlement Scandal – an Open Letter [3-31-14]
Part 37: Google’s Glass House [4-14-14]
Part 38: Google’s Titan Spy-Drones Mimic Military Spy Planes [4-17-14]
Part 39: Google’s Anti-Competitive Rap Sheet Warrants Prosecution not Leniency [4-30-14]
Part 40: Google Apps for Education Dangers [5-17-14]
Part 41: Google AdSense Lawsuit Spotlights the Corruption of Unaccountability [5-23-14]
Part 42: Six Ways the FTC is AWOL on Google [7-16-14]