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NY Times Asks: Can Google Grow Without Becoming A Monopoly?

The New York Times editorial questioning Google’s purchase of online flight software company ITA raises questions that could well apply to any new business Google buys unless the Internet Goliath changes its business model. The Times editorial rightly raises the $64 billion question:
Google cannot abuse its dominance in search to shut out the competition. What would happen to the $80 billion-a-year online travel business if Google’s rivals were relegated to the nether reaches of its search results and it came to dominate the search for online tickets, too?…..
Regulators must consider that if Google extends its dominance to the business of steering online customers to airlines and travel agencies, it would be in a position to charge more for this service. Without strong competitors to keep it in check, it might offer preferential placement to some airlines or agencies for a fee, or not list offers from companies that didn’t pay up. This could lead to higher costs for agencies, airlines and passengers.
In addition to the issue of Google’s size, some competitors worry because ITA’s software powers most of the online travel search engines today. They fear it falling into the hands of a competitor. While Google has said it will license the technology, regulators could extract commitments from the company to ensure that it does so at a fair cost and without degrading the technology.
The question is the right one. A big flag that raised the concern, outlined in an Inside Google report earlier this year on “Universal Search,” is Google’s practice of steering its search results to its own services. As the editorial says:
This concern comes up every time Google adds a new service — comparison shopping, maps, a bookstore. AOL’s Mapquest was clobbered when Google entered that business, dropping from first place to a distant second in less than two years. This was partly because of Google’s putting its own maps on top in response to queries about locations.
Greed has its karma, and Google’s increased antitrust scrutiny is the appropriate answer to a company that wants to corner too many markets.  Regulators need to push back. As the New York Times reminds Googleplex, echoing sentiments expressed by antitrust expert Gary Reeback at our recent privacy conference:
Google’s recent growth by attaching ancillary services to its core search business reminds many technology experts of Microsoft’s old strategy of bundling services like a Web browser, extending its monopoly in operating systems to new markets. That strategy led to one of the biggest antitrust cases of our time, and Microsoft lost.
Google will face a showdown in acquisition after acquisition unless new protections are on the horizon to safeguard against exactly what the Times, the Justice Department and antitrust experts fear. Read the original post on Inside Google.
raisinghell Jamie Court is the author of The Progressive’s Guide to Raising Hell.


Will Patients Beat Blue Shield Again… This Time With the First Online Ballot Petition for Rate Regulation

Shouldn’t the CEOs of health insurance companies like Blue Shield have to sign under penalty of perjury that their rate hikes are justified? If the first online signature gathering for a ballot petition is successful, Californians will vote on that proposition in November, and are almost sure to approve. One year ago I stood at […] Read More..

California Democratic Lawmakers Revive Schwarzenegger Scam To Sell Off Historic State Properties in Order to Save Their Pay

California’s Democratic state lawmakers announced a budget plan to keep their paychecks coming that included one of the worst ideas Arnold Schwarzenegger had since impregnating his kids’ nanny. If lawmakers don’t pass a budget today, they lose their pay tomorrow. So Assembly Democrats have included in their hastily-assembled budget plan Schwarzenegger’s political love child, selling […] Read More..

Do-Not-Track-Online Goes On National Map With Rockefeller Bill

U.S. Senator Jay Rockefeller did the American people a great favor today by introducing the Do-Not-Track-Online Act of 2011. iPhone and Android users should not have to worry about being spied on by their smart phones. We should be able to say no to Google and Facebook when they violate our privacy daily by tracking […] Read More..

Will the President Gridlock West LA as Prelude to Earth Day? He Should Read the Gas Station Signs

The email warnings are flying in West Los Angeles about how the President’s motorcade will once again gridlock afternoon rush hour. The cause: two mistimed, ill-placed Hollywood fundraisers on opposite sides of the traffic jam known as West LA. There’s probably no major city as pro-Obama as Los Angeles, or state so solidly in his […] Read More..

Google CEO for Commerce Secretary? How About Madoff for SEC?

The strong buzz in Washington, DC is that Google CEO Eric Schmidt is President Obama’s top choice for Commerce Secretary and an appointment is coming soon. The CEO who made billions collecting our personal information online and serving us up to advertisers, the guy who created online privacy problems, would head the federal agency responsible […] Read More..