How “Facebook Search” Could Help Google Escape The Antitrust Noose

Last week in the Chicago Tribune former judge and scholar Robert Bork (who is also a Google advisor) penned an opinion column arguing that by the accepted standards of antitrust law Google has done nothing legally wrong. Bork says, “There is extraordinary competition in the search engine business. Look at the proliferation of what are called vertical search sites that specialize in particular products or services, such as Amazon, Expedia, Kayak and hundreds of others.”

Who Competes with Google?

This question of who competes with Google — and is the market in fact competitive — is central to the analysis of European and US regulators as the antitrust investigations wind their way through “the system” and potentially to the courts. Google sees many more competitors than do its critics and has been trying for several years to widen the scope of the discussion about “search competition.”

If we open the aperture to include vertical sites with a search box (e.g., Yelp, Kayak, Truila) the world looks a great deal more competitive than if we only look at web search engines, which is what most ordinary consumers think when they hear the term “search engine.”

In the latter category there is Google, Bing, Blekko and DuckDuckGo. Blekko and DDG have negligible share. Bing’s share is an essentially flat 29 percent (when combined with Yahoo). In international markets such as China, Japan and Russia Google is the underdog. However in some markets, in Europe and elsewhere around the world, Google’s share of search is larger than in the US.

66 Percent or 83 Percent?

In contrast to the comScore data immediately above, the Pew Internet & American Life Project recently found that Google was the preferred search engine of 83 percent of US survey respondents. Based on a survey of roughly 2,200 US adults, Pew observed that “Fully 83% of searchers use Google more often than any other search engine.  Yahoo is a very distant second at just 6%.”

Many regulators and political officials, encouraged by anti-Google lobbying from rivals, have concluded that Google is simply too powerful and has too much control over the online ecosystem. Whether there are legal grounds for a finding of antitrust liability against Google is a different matter, but I do believe the Europeans will bring some kind of anti-competition case against the company. In addition, the various investigations going on at the federal and state levels against Google could also result in an action in the US.

This is where Facebook comes in.

Specter of Facebook Search Helps Google

The idea that Facebook is developing a search engine that might attract some usage away from Google is precisely the kind of development that could save Google’s bacon — so to speak. The “everyone competes against us” defense that appears in the Bork article and that Google has floated several times is unlikely to be persuasive. What will be much more persuasive is the argument that the world’s largest social network will be bringing search to its 900+ million users around the globe.

Recall when the Federal Trade Commission (FTC) was deciding whether to approve or block Google’s proposed $750 million acquisition of AdMob two years ago. I was one of the many dozens of people interviewed by regulators on the matter. My inference from the interview process and questions I received was that the FTC was predisposed to block the deal. Indeed, from all accounts it appeared that the FTC was going to file suit against the Google acquisition — until Apple bought Quattro Wireless.

Here’s an excerpt from the FTC’s public statement about its decision not to attempt to block the acquisition, explicitly citing Quattro as the basis of its rationale:

The Federal Trade Commission has closed its investigation of Google’s proposed acquisition of mobile advertising network company AdMob after thoroughly reviewing the deal and concluding that it is unlikely to harm competition in the emerging market for mobile advertising networks.

In a statement issued today, the Commission said that although the combination of the two leading mobile advertising networks raised serious antitrust issues, the agency’s concerns ultimately were overshadowed by recent developments in the market, most notably a move by Apple Computer Inc. – the maker of the iPhone – to launch its own, competing mobile ad network.

Facebook Like Apple for Google’s Legal Team

The FTC probably decided not that the market would actually be more competitive but that Apple buying Quattro had complicated its arguments and weakened its case.

Facebook is now analogous to Apple in that it provides a potential argument that the search market is competitive, and soon could be come more so if the company launches an improved search capability (whether for site search or the web more broadly). Indeed, Google’s legal team will wave the BusinessWeek article as evidence that the search market is highly dynamic, unpredictable and could change overnight.

And that might be just what Google needs to escape the antitrust noose.

Related Topics: Channel: Social | Facebook | Features: Analysis | Google: Antitrust | Google: Critics | Google: Legal | Top News

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About The Author: is a Contributing Editor at Search Engine Land. He writes a personal blog Screenwerk, about SoLoMo issues and connecting the dots between online and offline. He also posts at Internet2Go, which is focused on the mobile Internet. Follow him @gsterling.

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  • cathydunham

    The antitrust laws sadly prove that when businesses deliver something that’s quick, effective and everyone wants it, the FTC slaps them in the keester.

  • Nadav Gablinger

    @cathydunham:disqus : antitrust regulations, like many other laws, are from another period. It was logical to block a specific – say, soft drinks manufacturer – from taking over the market, because the consumer was not part of the “game”: if “Slurp” has taken over the soft drinks market, I don’t have access as an end-customer to any other soft-drinks, especially if I had lived somewhere in the periphery. 
    It is not the same with technology, especially with “virtual” products, and like many other issues (copyright, privacy, etc.), the lawmakers are lagging behind developments. 

    I belong to the generation that still remembers who it was to work through dial-up, to know people on IRC, etc. I wouldn’t have dreamt back then that one day I would be sitting on the train,  tapping on a screen, and answering email/gaming/surfing, in a much faster connection. The lawmakers usually belong to a generation or two above me, so what do they know… 

  • Ryan Beverly

    It’s a shame in this day and age that a company which has succeeded in building a name for itself and continues to develop is now a target for the FTC.  I understand the basis for the FTC’s case in legal terms, but the masses have spoken and none of the competition gives us what we want as well as google does.

  • http://www.facebook.com/people/Aiden-Moor/100001939456401 Aiden Moor

    Why FTC is going to file suite against Google acquisition???????

  • d_a_t

    Great main point. Kind of sad though that the entrance of one other major player can protect Google without Google changing any of its practices. Shows how antiquated our ideas of antitrust are.

  • http://www.facebook.com/the.nathaniel.bailey Nathaniel Bailey

    I don’t get what ground these FTC muppets have to try and stop a company from making its self better just because they are already the best (IMO) and most used company in its market?

    Are the FTC saying that no one can become to good at what they do? In that case, should the FTC not be stopping companies such as Amazon from selling so much or adding new products to its listings?

    If google can better the services they offer and win themselves more users because of it, why should the FTC have the right to stop them? Yes Google (like most companies) has done bad in the past, but we learn from our mistakes and make things better which is what google does and the FTC (a real dumb ass company from the US by the sounds of it) just want to screw google over and stop them from becoming better.

  • Gagool

    The Chicago Tribune article is a PR exercise full of truth-bending, lies, fear-mongering and straw men. But what would one expect from a Google minion.

    The all too familiar phrase “are disciplined by competition among themselves” alone should make one stop and think about whether the views of this guy hold any water. But there are lots of other interesting bits.

    “Google’s search engine is the most effective of the competing generic search engines; thus, the agencies’ focus on Google.”

    Classic manipulative lie – there is no cause-effect relationship. Agencies focus on Google because it has by far the biggest power of all competing search engines (in fact, far bigger than all the rest combined), not because of its effectiveness.

    “Search engines support themselves by selling advertising, much like newspapers, free TV or free radio, except that the search engines are much more efficient.”

    The media types mentioned are all well-known to a) be forms of entertainment first and foremost b) have built-in prejudices from among which the reader/viewer can choose. On the other hand, Google touted itself as an unbiased information provider, and not for nothing did Google’s founders originally say that funding such an enterprise from advertising is fundamentally more worrysome.

    “charge advertising rates based on the usefulness to consumers of the seller’s website and penalizing sellers whose websites aren’t consumer oriented”

    Well, the Google mindset of “penalization” shines through here: their arrogant company culture seems to have infected even the brains of their advisers. This sentence tries to sell something that’s very arbitrary to an AdWords advertisers (ie. quality score) as some objective outside force for the universal good. And the 99% of the population never to have had anything to do with AdWords will swallow it hook line and sinker. But that has always been the Google propaganda machine: apply to the ignorance of the masses (who are already grateful for the free products) to deflect legitimate criticism.

    “Google clearly distinguishes ads from its unpaid search results generated by algorithms.”

    Truth: Google has been very purposefully blurring the distinction between ads and results. They are regularly changing color schemes, always with the intention of making the boundaries a bit less obvious. But the ultimate “blurring” between ads and search results is by pushing all organic results below fold which documentedly happens more and more.

    “there is extraordinary competition in the search engine business. Look at the proliferation of what are called vertical search sites”

    To call specialized vertical search sites a competition for the biggest general-purpose search engine…

    “Microsoft and Yahoo [...] could take over the market instantly”

    New heights of bending it. Instantly, yeah.

    “A search engine that promotes its own inferior products over products people prefer will immediately lose its consumer base.”

    Yet another one in the “sounds good, alas untrue” department. First, because inferiority is not necessarily obvious to the majority of users who never really bothered to actually size up the available options. Second, because when a company is a market leader, a huge inertia is on its side, therefore even mentioning the word “immediately” in this context exposes the author either as ignorant, or as a PR shill.

    “Google’s current position in information search doesn’t establish market power over advertising”

    Also a lie. For millions of small and middle enterprises, the competitive market is NOT “more accurately defined as all advertising, including newspapers, television, radio and other media”. They have no access to most of it, mainly on financial grounds. Online advertisements are all they can afford, and as online advertisements are practically monopolized, for these millions of companies, Google DOES have market power over advertising.

    “And what is the court to regulate? Google estimates that it introduces changes to improve its search algorithms 500 times a year”

    And because Google is an unbiased, uninterested party always telling us the truth and nothing but the truth, this is a very strong argument.

  • http://robertclarkmtfs.com/ Robert Clark

    Google is a great company but honestly I would be all for them being forced to break up. The reality is that they 100% control the behavior of everyone who wants any seo done to their website and with Google + has forced even more control over the market.

    Facebook is a welcome step in the right direction but that is going to be more of a cool internal search most likely and not something which will truly compete with Google.

  • http://twitter.com/Da11ey Simon Dalley

    Agreed – in theory they exist for the right reason, but the theory needs a degree of evolution to bring it into the 21st Century

  • QGODDESS_01

    All I know is that I have nearly 100 videos on Vimeo and the same videos are on YouTube (owned by Google) and only the videos on YouTube show up in search results. If I were running Google, of course, I would make sure my products are given priority in the search results. However, when the other company doesn’t show up on the same page or, at all, this tells me there is a problem. 

  • cathydunham

    All said and done, having a little Facebook competition will probably spur Google to work even harder to dazzle us. And doesn’t FB have its own history of FTC challenges?

  • http://www.facebook.com/people/Lionel-Rizky/100003781846299 Lionel Rizky

     make it easier to promote your website please visit my website http://www.easyhighincomejobs.com/ and select the one product that I offer my diwebsite. thank you

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