Google Antitrust Decision: What Does It Mean For Your Business?
After years of complaints about search results on Google, the Federal Trade Commission finally investigated and ultimately, took no formal steps against the company. The result must have sent Larry Page and his management team dancing in the company's headquarters and driven Steve Ballmer, CEO of Microsoft, which had lobbied for strong action, looking for a bottle of aspirin.
For small businesses, life will be go on pretty much as it has been. Don't expect any sudden lift in your search results or a massive Google reprisal, although you may want to revisit some strategic marketing decisions you have taken.
A major finding of anticompetitive behavior was always going to be tough to achieve:
- Google's search market share has been big, but traditionally courts have looked for a two-thirds share as the starting point of monopoly. Google has been hovering just below that.
- Legally, market dominance generally means the ability to significantly raise prices over time. When it comes to dollars, only advertisers are paying, and the rats are set by auction. In that way, Google has no control over how much companies will pay for advertising.
- Google has a number of popular services, which helps explain why its offerings tend to do well in searches on its engine. But they aren't always the first offering. For example, a search today for "maps" brought Google Maps to the top, but a search for "directions" had MapQuest as the first listing.
The basic requirements of an anticompetitive finding were not strongly in place, if they were there at all. Although the FTC claimed that Google would change its business practices, this seemed largely a face-saving headline. The major concession was about making some fundamental patents, which it gained through the Motorola acquisition, available to other handset manufacturers, including Apple.
A more minor concession, though, might have some implications for small businesses:
Under a separate commitment, Google has agreed to remove restrictions on the use of its online search advertising platform, AdWords, that may make it more difficult for advertisers to coordinate online advertising campaigns across multiple platforms.
Advertisers who wish to use a search advertising platform spend considerable time, effort, and resources preparing extensive bids, including keywords, price information, and targeting information. Once an advertiser has entered the information necessary to create a search advertising campaign, the advertising platform sends critical data back to the advertisers that they need to evaluate the effectiveness of, and to further manage, their campaign. Advertising platforms use application programming interfaces, known as APIs, to give advertisers direct access to these advertising platforms so they can develop their own software programs to automatically manage and optimize their advertising campaigns.
Some FTC Commissioners were concerned that Google's contractual conditions governing the use of its API made it more difficult for an advertiser to simultaneously manage a campaign on AdWords and on competing ad platforms, and that these restrictions might impair competition in search advertising.
What does all of that mean for you? You can expect software and services to emerge that will let you more easily manage an online advertising campaign across multiple ad platforms.
In addition, Google will allow websites to opt out of vertical search offerings--the specialized categories like blogs, books, and shopping--while still appearing in overall organic search results. This has to do with Google allegedly pulling in such content as user reviews from other sites to improve Google Local and Google Shopping. While that will be important for some sites like Yelp, which develop and collection proprietary content, it has far less impact on smaller businesses, except that the other sites may become more important marketing venues because consumers will have to go to them for the review content.
As far as search bias goes, the FTC decided that if it existed, it could be "plausibly justified" under U.S. law.
In other words, most small businesses will be entirely unaffected by the agreement between the FTC and Google.
ERIK SHERMAN | Columnist
Erik Sherman's work has appeared in such publications as The Wall Street Journal, The New York Times Magazine, and Fortune. He also blogs for CBS MoneyWatch.