Companies Ask Courts, Regulators To Restrain Google To Compensate For Own Competitive Failures

In a kind of parallel but interesting variation on the complaints filed in Europe against Google, now being investigated by the European Commission in a preliminary anti-trust inquiry, one of the European complainants Foundem has filed a brief with the US FCC concerning net neutrality. The complaints in Europe, broadly speaking, argue that Google has punished competitors by demoting them in search results.

The Foundem complaint/brief with the FCC argues that Google favors its own products and thus “search neutrality” is required to prevent Google from harming competitors accordingly:

Search engines have become the Internet’s gatekeepers and are arguably as essential a component of its infrastructure as the network itself. Google’s overwhelming dominance of search and search advertising, coupled with its ability to arbitrarily penalize rivals and systematically favor its own services, makes the need for search neutrality particularly pressing.

This is similar to an argument recently made by a consortium of minority media organizations:

The Minority Media and Telecommunications Council, representing 16 national organizations, [  ] raises the provocative issue of whether net neutrality requirements should be applied to search engines.

A couple of deeper looks at Foundem’s organic search position argue that the company’s ranking on Google may be based on bad SEO practices rather than any manipulation of results by Google. See for example Tribble and EConsultancy for more.

Foundem is requesting some sort of remedy or remedies plural to prevent Google from allegedly “favoring” its own products and services:

There is an urgent need to constrain Google’s domination—either through competition or through regulation.  Despite the recent US and European approval of the search alliance between Yahoo! and Bing, competition in search is unlikely to be sufficient, at least in the short term. Carefully considered regulation is therefore needed to codify the Network and Search Neutrality principles of non-discrimination and transparency and apply them equally across the entire Internet ecosystem.

Let’s ask, hypothetically, what all this might mean in practice. It might mean, for example, not allowing Google to refer traffic to its own properties (e.g., Maps) or it might mean promoting competitors alongside its properties — or both.

In one sense this is not unlike what the EU required Microsoft to do with giving people “browser choice” on new Windows machines. However it would be difficult to implement as a practical matter because it doesn’t involve a one-time settings choice; it involves billions of SERPs and their configuration. Would Google need to list competitors’ sites side-by-side with its own results on SERPs in every instance where Google has a corresponding property?

Google does do this today in a few instances:

But who would get these coveted links? Would only the largest sites in a category be “entitled” to this sort of SERP presentation? Would there need to be a rotation of companies in segment? That would create another round of fighting;  you can imagine the problems.

The Foundem brief cites the example of Google’s removal of links to Yahoo Maps and MapQuest as evidence of what happens when Google “favors” its own properties:

The preferential placement of Google Maps at the top of Google’s search results, which began in May 2007, played a significant role in unseating MapQuest from its position as the US’s leading online mapping service.

For those who don’t recall, Google removed those links to competitive mapping sites in January of 2007. Foundem anticipates the “superior functionality” of Google Maps argument as the explanation for MapQuest’s decline:

Some will suggest that the rapid rise of Google Maps can be attributed to superior functionality.  But an analysis by Heather Hopkins of Hitwise found that many more users were still actively searching for MapQuest than for Google Maps at the time when Google Maps’ traffic was surpassing MapQuest’s; she concluded that Google Maps’ rising traffic was the direct result of its preferential placement in Google’s search results . . .

There’s no question that Google’s ability to refer traffic to its own mapping site has helped Google Maps overtake MapQuest. The truth, however, is much more complicated than Foundem’s contention.

MapQuest failed to add new functionality and invest in the property for more than two years at a time of intensifying competition and feature innovation at Google and Microsoft. Similarly Yahoo didn’t invest in its mapping property either and has similarly suffered. MapQuest brand strength has sustained traffic to some degree and more recently MapQuest has upgraded its functionality. But the truth is that MapQuest was and is generally inferior to Google Maps in most respects.

The MapQuest “case” illustrates the problem at hand. Yes, Google has referred traffic to itself but it also offered a more compelling experience than MapQuest. YouTube is another difficult example; it gets traffic directly from Google but is also the category leader by far. Is Google perpetuating that leadership via Universal Search?

Beyond listing competitors’ sites a potential remedy, as mentioned, would be to prevent Google from referring traffic via Universal Search to any of its own properties. OK. Would that principle then equally be extended to Bing and Yahoo or would it just apply to Google? If it were only applied to Google that would represent a problem of fairness at the very least. Indeed, if the no self-referring rule were to be imposed across the board — no search engine can refer traffic to a property owned and operated by its corporate parent — the search experience would arguably be compromised and innovation might slow down.

Furthermore a 2003 federal court decision (interpreting Oklahoma law) may make all of this “search neutrality” or proposed algorithm regulation moot. According to an opinion in Search King, Inc. v. Google Technology, Inc. Page Rank and search algorithms more broadly are “subjective opinions” entitled to First Amendment protection:

The Court must, therefore, determine whether Google’s manual decrease of Search King’s PageRank was malicious and wrongful, and was not justified, privileged, or excusable. Google asserts that its actions cannot be considered wrongful because PageRanks constitute opinions protected by the First Amendment . . .

Other search engines express different opinions, as each search engine’s method of determining relative significance is unique. The Court simply finds there is no conceivable way to prove that the relative significance assigned to a given web site is false. Accordingly, the Court concludes that Google’s PageRanks are entitled to “full constitutional protection.”  . . .

Having determined that PageRanks are constitutionally protected opinions, the Court must now consider whether, under Oklahoma law, Google is immune from tort liability arising out of the intentional manipulation of PageRanks. In Jefferson County, the Tenth Circuit concluded that under Colorado law, protected speech cannot constitute improper interference in the context of a claim for tortious interference with contractual relations . . . The Court finds that Oklahoma law compels the same conclusion in this case.

Google is dominant in search, but it does have competition and many functions formerly taking place in search (e.g., content discovery) may shift to social media and Facebook in particular. So the idea that Google is the only doorway into content is myopic and incorrect as a practical matter. 

Behind many of the complaints filed is a sense of profound frustration. In addition, there’s also a subtext of entitlement to some sort of position in search results. That argument has even been explicitly made by newspaper publishers who similarly complain of Google’s too-central role in content discovery online. Unable to compete effectively some of these companies are now turning to courts and regulators for relief, alleging that Google is doing improper things or proposing novel theories such as “search neutrality.”

Yet by its very nature “search neutrality” is something of an oxymoron.

There is a problem when one company is too powerful in any industry. But when that comes about not as the result of market manipulation but rather consumer preference it raises a philosophical question about what to do and how to “restore” or promote competition. However the potential remedies, implied by the Foundem brief, are problematic.

I’m no free-markets zealout but I do believe that if courts and regulators start dictating how search algorithms should operate it starts to destroy search and its utility.