Google (NASDAQ:GOOG) supports net neutrality when it comes to Internet Service Providers, staunchly insisting that ISPs should not be allowed to preference their own content. In an article concerning net neutrality, Eric Schmidt, Chairman and CEO of Google, argued that regulation is needed to prevent abuses of the availability of internet content by ISPs and “to combat incentives for carriers to pick winners and losers online.”
It would make sense for Google to adopt a similar stance towards its own actions. Instead Google straddles the fence, nodding in support of net neutrality and regulation for ISPs, while employing sneaky business strategies that preference its own content over anyone else’s.
According to Nielsen, of the 10.8 billion searches performed in the U.S. in August of 2009, 67.7% are performed using Google Powered Search. Yahoo Search (NASDAQ:YHOO) combined with Microsoft (NASDAQ:MSFT) and Bing Search, which soon will be part of the same entity, accounted for 26.6% of the market share. This means that two companies will control more than 94% of the searches in the country. Hence, two companies will control, through algorithms or other strategies, the content that most users visit.
There is very little difference between this and the small number of high-speed internet providers. Based on their neighborhood, most people only have a couple of choices when it comes to high-speed internet access. Certainly there are hundreds of dial-up services and there are also hundreds of “other” search engines. Nevertheless, most people literally only use two search engines, and thus these lucky two have extraordinary influence over what people find when they search.
While Google claims to be against ISPs picking online winners and losers, by giving preferential treatment to certain content, it doesn’t seem to find anything wrong with giving preferential treatment to its own content. The same applies for search results on Yahoo, or Bing; these often lead to affiliate sites or products of these companies. Big search engines preference content that benefits them. Some of this is clearly labeled as advertisements, but more often these results, like stock quotes, maps, music, or comparative shopping, show up at the top of the “unbiased” section.
One easy to find example of this preferencing occurs when people look up individual stocks. The very first return, listed in the regular section is Google’s stock pages. It’s important to note that what seems like a simple unbiased return is completely slanted towards promoting other Google services.
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This trend continues when people conduct a search for music. When people type in an artist’s name or song, the first “unbiased” result is from Google Music. It would be hard to see these examples as coincidences, since they clearly benefit Google. Rather they’re an example of a company with extraordinary power exploiting self-promotion at an unfair cost to other competitors.
The popularity of the search engine combined with the likelihood of people clicking the first search result, means that Google can effectively steer online traffic to biased content and most people do not even realize their searches are controlled by this monopolistic tendency.
Even within the advertising section, Google has created an unfair advantage relative to other advertisers. A search for a mortgage quote on Google returns an advertisement at the top of the page for a Google Compare Mortgage Rates tool. Unlike an ad nearby for LendingTree, Google adds a handy, clickable button for immediate rate comparison.
This extra feature may make Google’s ad much more attractive, and since it’s also the first thing on the page, creates another unfair advantage for Google services.
Google or affiliated services are not always listed as advertisements and we have all been trained to expect that search results and ads are somehow different from each other. Google has the tendency not only to run first place ads but to also promote products of any of its companies, by giving them top return status.
Were these clearly marked as advertisements of the search engine, users could then determine whether or not to use Google products or services. Instead many returns look like legitimate first returns or best sites. This way, Google attains net supremacy, by driving users to its own sites, but keeping biases subtle enough to escape notice.
If net neutrality laws are to succeed then, they may need to focus on major search engines in addition to studying actions of ISPs. Such laws must examine ways in which search engines facilitate preferential treatment based on financial interest, and in doing so, really make it impossible for all sites to have a fair chance on the internet. Google's position concerning net neutrality is conveniently only applicable to ISPs and certainly does not reflect the company's overall philosophy concerning neutrality. What the company opposes for Comcast (CMCSA), creation of an internet environment preferential to service providers, it is already subtly doing through gross self-promotion on its search engine. This internet giant picks winners every time, and it’s surprising how often the winner is Google.
It’s valid to compare Google to Microsoft and the many accusations leveled against the latter for violating antitrust laws. With 67% of the share of internet searches, Google has significant control over the internet and it abuses its power by not only giving greater visibility to its own content, but also by acting in ways that aren’t always noticed by users. If Congress and the FCC are serious about net neutrality, it is time to apply the same principles to both search engines and ISPs.
Disclosure: No positions