Inside Google

WASHINGTON, DC — Google has been using its dominant position in online search to muscle its way into other Internet businesses, ultimately limiting consumer choice, Consumer Watchdog said today in a report written for its new Inside Google Website.

The nonprofit, nonpartisan consumer group is sending the report to U.S. and European antitrust regulators.

Read the report below.

The Inside Google study found that since adopting “Universal Search,” which favors Google’s properties with prominent listings in its results, traffic to Google’s sites has soared at the expense of competitors. The controversial search practice was launched in 2007.

“Google claims that its search is neutral,” said John M. Simpson, consumer advocate with the group. “This study shows that it’s not and demonstrates the damaging impact Google’s unfair practices have had on competitors.”

Consumer Watchdog will give the Inside Google study, “Traffic Report: How Google is Squeezing out Competitors and Muscling Into New Markets,” to U.S. Justice Department and European Commission antitrust officials.

The study of Internet traffic data for more than 100 popular websites since 2007 revealed Google’s dramatic gains. In the most comprehensive study of its kind to date, Inside Google obtained three years of Internet traffic data from the respected web metrics firm Experian Hitwise. The data allowed an analysis of Google’s business practices and performance that is unprecedented in scope.

The data shows that Google has established a Microsoft-like monopoly in some key areas of the web. In video, Google has nearly doubled its market share to almost 80%. That is the legal definition of a monopoly, according to the federal courts, which have held that a firm achieves “monopoly power” when it gains between 70% and 80% of a market, the report noted.

The Inside Google analysis found that the most striking example of the power of the Universal Search strategy is MapQuest, a unit of AOL whose market share has dwindled to 32%, down from 57.24% in July 2007. The Hitwise data shows that the stark decline in visits to MapQuest was accompanied by a closely matching rise in visits to Google Maps, as Google put its own service atop all others for generic address searches.

“MapQuest, a unit of AOL, appears likely to soon be reduced from a dominant player in web commerce to an also-ran, due in large part to the steps taken by Google to favor its own locator service,” the report said. “Google is now the now the dominant provider of local search information with more than 51% of the market.”

Google claims that with the introduction of Universal Search, the company was attempting to break down the walls that traditionally separated its various search properties and give “ the very best answer, even if you don’t know where to look.”

The Inside Google study reaches a different conclusion: “The reality is a bit more crass: Universal Search now populates the top of the results page mainly with results from Google’s own product lines. These changes bring the search giant several steps closer to a closed ecosystem where real consumer choice no longer exists.”

The Inside Google Website is part of Consumer Watchdog’s Google Privacy and Accountability Project. The project is intended to open Google’s largely secretive practices to public scrutiny. The report was written by Glenn Simpson, formerly an investigative reporter with the Wall Street Journal.

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To download the report without having to log into Scribd, you can click HERE. Alternatively, you can read the same document embedded in this page below.

Consumer Watchdog, formerly the Foundation for Taxpayer and Consumer Rights is a nonprofit, nonpartisan consumer advocacy organization with offices in Washington, DC and Santa Monica, Ca. Consumer Watchdog’s website is www.consumerwatchdog.org. Visit our new Google Privacy and Accountability Project website: http://InsideGoogle.com