Google's Eric Schmidt denies 'cooking' search results
Schmidt defended his company's search rankings and other business practices at a Senate hearing Wednesday examining complaints from competitors that the Internet search giant is violating antitrust law. He faced tough questioning from some members of the Senate's antitrust subcommittee, who have been investigating whether Google's dominance in the search market is harming competition.
In one pointed exchange, Schmidt was asked to explain an independent study that compared the search results for the same product on three popular product-comparison websites and the Google Shopping site. While the results from the other sites varied widely, Google Shopping results consistently ranked third, said Sen. Mike Lee (R-Utah).
"When I see you magically coming up third every time ... you’ve cooked it so you’re always third," Lee charged.
"Senator, I can assure you we have not cooked anything," Schmidt responded.
He said Google Shopping was different than a product comparison site because it simply pointed users to where to buy the item. In that way, the comparison was apples and oranges. And he said more broadly that "I’m not aware of any unnecessary or strange boosts or biases” given to Google services in search results.
But Schmidt's answers didn't satisfy some senators.
"That seemed like a pretty fuzzy answer to me coming from the chairman. If you don’t know, who does?" said Sen. Al Franken (D-Minn.) "That really bothers me.... We’re trying to have a hearing about whether you favor your own stuff and you’re asked that question and you admittedly don’t know the answer."
Lee was more blunt.
"I’m troubled by what we’ve learned today about Google’s practices," he said.
"We run the company for the benefit of consumers and frankly not for the other websites," Schmidt said.
But Sen. Richard Blumenthal (D-Conn.) said that sounded like bias. He used a horse-racing analogy to make his point.
"You run the racetrack. You own the racetrack. For a long time, you didn’t have any horses," Blumenthal said. "Now you have horses ... and your horses seem to be winning."
The hearing comes as Google faces antitrust inquiries in the U.S., Europe and Asia and has been criticized by privacy advocates for its vast data collection practices.
The company’s dominance of the search-engine market -- its share in August was 64.8%, four times its closest competitor, Yahoo -– and expansion into business areas, such as travel data software and mobile phones, have increased the number of competitors complaining about its power.
The subcommittee called its hearing, “The Power of Google: Serving Consumers or Threatening Competition?”
The Federal Trade Commission this year launched a formal antitrust investigation into Google’s business practices. And the Senate’s antitrust subcommittee has been looking into Google’s power in the search market and pushed to get one of the company’s top executives to testify. Google originally offered its chief legal officer, but subcommittee chairman Herb Kohl (D-Wis.) and Lee, the subcommittee's ranking Republican, pushed for Schmidt or Chief Executive Larry Page.
With the embarrassing possibility of being subpoenaed, Schmidt agreed in July to testify. Wednesday’s hearing echoed the grilling of then-Microsoft Chief Executive Bill Gates in 1998 before the Senate Judiciary Committee in the midst of a Justice Department antitrust investigation of the software giant.
In a settlement of those charges in 2001, Microsoft agreed to make it easier for competitors to integrate their products with its Windows software and faced a decade of Justice Department oversight that ended this spring.
Google has tried to avoid Microsoft’s fate. While Microsoft largely ignored Washington before its antitrust problems, Google early on opened an office in the nation’s capital and began building a powerful lobbying operation.
As Google has moved beyond search, it has run into antitrust troubles. The company pulled out of a proposed search advertising deal with Yahoo Inc. in 2008 after U.S. officials said they were preparing to challenge the acquisition on the grounds that it would erode competition.
Other deals have been approved, but after tough government reviews. For example, the acquisition of travel data company ITA Software Inc. was approved by regulators in April with conditions, including a requirement that Google license the software to other websites on reasonable terms.
-- Jim Puzzanghera
Photo: Google Inc. Chairman Eric Schmidt at a Senate antitrust hearing. Credit: Associated Press.