Do The Majority Of Americans Think Google Is Unfair?

Fairsearch.org has released findings from a new study that raises serious and important issues about Google, its influence on searcher behavior and whether the search giant’s actions are deliberately hindering competition. Unfortunately, the study results are tainted by flawed methodology and a blatant anti-Google bias, implicitly favoring the agendas of the companies that sponsored the research.

According to its website, Fairsearch.org “is a group of businesses and organizations united to promote a healthy Internet future, where economic growth is driven by competition, transparency and innovation in search verticals and online services.” It’s also an advocacy group for Google’s competitors—most prominently those in the online travel space— with members including Microsoft, Travelocity, Hotwire, Expedia and others.

As a watchdog group, Fairsearch.org has shone light on some of Google’s more questionable practices that we’ve also called out at Search Engine Land, including content scraping of Yelp, imposing requirements on mobile phone manufacturers despite Android being an “open” mobile operating system, and others.

But Fairsearch.org has another, very prominent agenda that it makes no effort to conceal: to hobble Google for the ostensible benefit of consumers, and incidentally, for the benefit of its sponsoring members as well.

This week, in advance of the Senate antitrust hearing where Google is the focus of some fairly intense grilling, Fairsearch.org released the findings of a survey that is overwhelmingly anti-Google. The survey was conducted last week, among a randomly selected poll of 1,005 American adults. From the results: “One can say with 95% confidence that the margin of error is ±3 percentage points. These data were weighted to ensure that the sample’s composition reflects that of the actual U.S. population according to U.S. Census figures. In addition to sample error, question wording and practical difficulties in conducting surveys can introduce error or bias into findings of public opinion polls (emphasis added).

Fairsearch.org provided me with a copy of the questions and statements used by interviewers for the survey, and most of them are leading questions or statements that use questionable stats to stimulate the responses FairSearch.org apparently wanted, rather than seeking objective consumer opinions. So yes, it’s fair to say there may have been “error or bias” introduced into the findings.

Here’s a look at each of the findings, with commentary and an attempt to add balance to each of the conclusions.

Eight in ten (79%) Americans favor the FTC’s investigation of the company for restricting fair competition and misleading consumers. Half (49%) say they strongly favor the FTC’s actions.

“Eight in ten Americans.” Not survey respondents. That’s a rather over-reaching statement.

This finding followed a previous question that used this statement: “Google makes almost all of that money by using the personal data it collects about consumers to sell targeted search advertising. Today, Google controls 79% of the search advertising market in the United States.”

Fairsearch.org attributes the “79% control” stat to StatCounter, comScore and Google. StatCounter does indeed show a 79% share of search engine traffic—not search advertising, mind you, but overall search share. comScore’s similar stat is much lower—around 65% (and has been steady for years), but again, this is overall search share, not search advertising share.

eMarketer, another source cited by Fairsearch.org when I asked about the source of the stats used in the survey, puts Google’s search advertising share at 76% for 2010. While this number is closer to the number Fairsearch.org uses in the survey, it’s not the source cited. Improper attribution of stats when asking a survey question raises serious credibility problems about whether the results can be trusted. And it’s not the only questionable stat in either the survey itself or some of the other materials Fairsearch.org provided to back up the survey results. No sources at all are cited in the document FairSearch.org said was used to conduct the study, implying that respondents heard the stats out of the blue without attribution. Bottom line: it’s difficult to trust survey results when stats were used that were either not attributed or improperly cited.

Over six in ten (63%) say it is unfair for Google to use the profits it makes from its dominant position in search advertising to buy smaller, innovative companies at an early stage, preventing them from becoming competitors.

An interesting finding, and one that may shed unwanted light on the business practices of Fairsearch.org sponsors. Many of the organizations supporting Fairsearch.org have made (and continue to make) acquisitions of smaller companies themselves, presumably from the profits they’ve made from running their own companies. Microsoft has acquired 128 companies, many of them involved with search. Travelocity (a subsidiary of Fairsearch.org patron Sabre Holdings) acquired Site59.com and lastminute.com (which itself had previously acquired AllHotels.com). Expedia has acquired eight smaller companies, including another Fairsearch.org sponsor, Hotwire.

Over eight in ten (84%) say it is unfair for Google to take content from other websites and present it as its own, depriving these other websites of potential consumer traffic.

No quarrel with this conclusion. We’ve written about Google’s content scraping of Yelp and content scraping allegations by the national board of realtors, among other things, and completely agree that in a few cases Google took more of an “ask forgiveness, not permission” stance. To be fair, Google has challenged these assertions, and for almost all of its history has said that it cooperates with webmasters and content providers to make sure copyrights are respected.

Three-quarters (74%) say it is unfair for Google to raise prices for advertising without notice and to favor large e-commerce companies over small local businesses.

This is perhaps the most misleading finding of the survey, because the question (more accurately, a statement that respondents were asked to assess on a five-point scale from “very fair” to “very unfair”) was phrased improperly and made assertions that would be dismissed as hearsay by people who understand how Google’s advertising program works. The statement: “Google uses its dominant position to raise prices for advertising without notice and to favor large e-commerce companies over small local merchants that generate greater profits for Google.”

Google does not “raise prices for advertising.” Prices of both search ads and display ads are set by auction, not directly by Google. Advertisers compete to have their ads displayed by voluntarily raising or lowering bids. Ultimately, the price an advertiser pays is determined by the keyword, ad position, competitive bids and the “quality score” of an ad and landing page. Google actually charges less for ads it deems are higher quality. For detailed background on how this works, see Definitive Answers On Quality Score: Q&A With ClickEquations’ Craig Danuloff.

It’s interesting to wonder whether this survey finding may be related to today’s news that the FTC is reportedly investigating whether Google “illegally increased advertising rates 50-fold for rival Microsoft Corp.” Microsoft, as mentioned, is a prominent sponsor of Fairsearch.org.

Over six in ten (64%) believe a single company that controls 79% of the market for a good or service should be subject to existing antitrust laws. Only a quarter (23%) say such a company should not be subject to these laws and 13% are not sure.

Other than the (recurring and questionable) 79% stat, no quibble here. Two problems, however: First, as the cliche goes, competition is simply one click away on the web. Google has the market share it has because people choose to use Google. It’s not some sort of utility where choice is non-existent. The second problem is that antitrust laws are designed to protect consumers, not competitors. Fairsearch.org is advocating hobbling Google because it claims it’s harming consumers—though this is mere speculation, not fact. Google’s popularity (and profitably, implying that people are comfortable enough with the ads Google runs to click on them—a lot) argues strongly against that.

Nonetheless, it’s a valid issue and one that both needs to be discussed (and certainly will be – see our Googleopoly: The Definitive Guide To Antitrust Investigations Against Google for more on this important issue.

Almost six in ten (57%) feel that Google’s control of 79% of the search advertising market is bad for consumers. Only a third (33%) consider this a good thing for consumers.

Again—Google ads are auction-based. Google’s search advertising market share is a direct result of where advertisers choose to spend money, not because of some type of requirement Google is placing on advertisers. The implication in this finding is that Google should somehow be limited in the number of ads that it allowed to accept—or taken to a ridiculous extreme, that advertisers should be required to distribute their dollars according to some kind of formula that is somehow “good” for consumers, rather than advertising where they actually reach customers and get the greatest return on ad spend.

Two thirds (65%) believe Google’s control of the mobile search market is bad for consumers.

Google does indeed control almost all of the mobile search and advertising market share, according to studies by banking and investment firm Macquarie Group, using Efficient Frontier data. Ironically, Fairsearch.org attributed the stat it used in its survey to Search Engine Land, which was a report/analysis of the data, not original the research. This source misattribution further undermines the credibility of the survey—sloppy methodology can never help and can only harm anyone undertaking supposedly “objective” surveys.

Like most consumer watchdog groups, Fairsearch.org deserves credit for raising awareness on important issues that cry out for rational discussion. Unfortunately, the organization’s apparent single-minded goal to cripple Google, coupled with its disingenuous argument that this hobbling will be good for consumers (rather than helping the interests of its own patron companies) make it a source most people should eye with considerable skepticism.