Inside Google

The Senate Antitrust Subcommittee plan to examine Google’s activities for possible antitrust violations, is the latest indication that the Internet giant’s behavior is drawing increasingly skeptical — and well deserved — scrutiny in the nation’s capital.

I’m just back from Washington were I was discussing online privacy protection and antitrust concerns with Congressional staffers, the Federal Trade Commission and various journalists.

It’s clear that the Internet giant is losing its mojo. As The National Journal’s David Hatch writes about Google, “Its star is falling fast in Washington.”

The most recent example are developments this week on the Antitrust Subcommittee.

In announcing the Antitrust Subcommittee’s agenda for the 112th Congress this week, Chairman Herb Kohl, D-WI, said:

“In recent years, the dominance over Internet search of the world’s largest search engine, Google, has increased and Google has increasingly sought to acquire e-commerce sites in myriad businesses.  In this regard, we will closely examine allegations raised by e-commerce websites that compete with Google that they are being treated unfairly in search ranking, and in their ability to purchase search advertising.   We also will continue to closely examine the impact of further acquisitions in this sector.“

Like online privacy, concern about Google’s anticompetitive practices is emerging as a bipartisan issue. Kolh issued his subcommittee’s agenda on Thursday.  Friday, Ranking Member Michael S. Lee,  R-UT, also called for hearings on Google. Lee wrote:

“The powerful position Google occupies in the general search arena creates myriad opportunities for anticompetitive behavior. The Deputy Director for Antitrust within the Bureau of Economics at the Federal Trade Commission, Howard Shelanski, recently observed that a ‘hypothetical search engine’ with various ‘scale and network economies’ might become a ‘must have’ for consumers and thereby more effectively engage in ‘anticompetitive discrimination.’”

Lee said the Department of Justice “should also investigate whether Google’s powerful position as an Internet gatekeeper reduces the company’s incentive to compete with other search engines by providing enhanced privacy protection for consumers…”

Lee also cited the Wi-Spy scandal in which Google gathered data form private Wi-Fi networks as a privacy breach.

“The combination of behavioral and personal information enables Google to generate consumer data that is unprecedented in scale and scope.  These activities raise serious privacy concerns and may be indicative of an important market that is largely unconstrained by competition.  Antitrust enforcement may unlock beneficial competition for the protection of user privacy and avert the need for additional privacy regulation.”

Consumer Watchdog has been pushing the Department of Justice, The Federal Trade Commission and Congress to investigate Google for more than two years. I don’t mean whether a particular deal should be allowed, but a full-blown investigation of its activities.  I think it’s finally going to happen.