Google's FTC Win: Web Businesses React
Yesterday, Google emerged largely victorious from the Federal Trade Commission's investigation into whether its business practices violate antitrust laws. Some businesses argue that the FTC's decision allows Google to promote its own Web properties over competitors in search results.
The FTC investigated allegations by rival companies that Google modified its search algorithms to bump down competitors' listings, or eliminate them altogether. In particular, competitors singled out "Universal Search," which prioritizes Google's own services, such as Google Shopping and Google+ Local, when users search for topics in certain categories. Yesterday, however, the FTC ruled that Google's method of search rankings was not necessarily harmful to consumers. Google voluntarily agreed to change its practices on two separate matters relating to its mobile-phone patents and its ad platform.
The decision was met with disappointment from FairSearch.org, a coalition of companies including Microsoft and travel search engine Kayak. The coalition argues that because of Google's dominance in search, the fact that it favors certain sites unfairly obscures other alternatives, which ultimately harms innovation on the Web. The FTC's ruling grants Google free license to block companies from its pages, then launch competing services of its own, says Colin Pape, the CEO of ShopCity.com, a site that provides tools for local businesses to create online storefronts. "From our perspective, what Google is doing is taking advantage of its dominant position," Pape says. "It's harmful to consumer choice."
In fact, Pape alleges that exact scenario happened to ShopCity.com. In 2009, the site dropped dramatically in Google's search results, according to Pape. When he contacted Google, he says, he was told to improve his site's quality. Months later, Google launched Places for Business, a service similar to ShopCity that helps local businesses establish an online presence. Eventually, Pape says, after ShopCity joined FairSearch.org's FTC complaint, the company's listing rose in Google's search results.
Shouldn't companies expect that Google would promote its services above those of competitors? Perhaps, Pape says. But, he adds, the search giant lacks a transparent process for addressing why it chooses to block certain sites in search results. "The problem is that Google has a blank check now," he says. "It should need to prove how its services are better for consumers, to have some type of mechanism where it's held in check."
Google's most direct competitors--other search engines--don't agree with that argument. "Just because you got free traffic from Google yesterday doesn't mean you have the right to get it today," says Rich Skrenta, the CEO of Blekko, a search engine whose results are partly curated by users. "It's not appropriate for lawmakers to decide how a company's algorithm should function."
Indeed, several newer search engines trumpet the fact that they prioritize certain results over others. Blekko's About page states, "A search engine is an editorial product. The algorithms that determine search results are created by humans and contain an editorial bias." And DuckDuckGo, a metasearch engine, earmarks a group of trusted sites to power its Goodies feature, which displays answers to certain queries at the top of search results.
As long as search engines are transparent about how they prioritize results, says Gabriel Weinberg, DuckDuckGo's CEO and founder, that bias shouldn't matter. "That is a choice search engines should be allowed to make," he says.