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Is Schmidt Batting Cleanup for Google on the Hill at Antitrust Hearings?

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Eric Schmidt TestifyAnswering the call of the U.S. Senate antitrust subcommittee, Google will have Executive Chairman Eric Schmidt to testify on their behalf.

"Google had been reluctant to have Mr. Schmidt or other senior executives testify at a time when the Internet search giant is confronting a broad array of investigations into its business practices. But last month, senators on the panel warned they would use their subpoena power to compel one to appear," the Wall Street Journal reported.

Schmidt told Politico today he decided to testify following a "reasonable" personal request by Sen. Herb Kohl (D-Wis.): "He asked. The senator called. He was very nice."

CEO Larry Page will also testify, according to the International Business Times.

Google had hoped David Drummond would be able to continue his tenure as company antitrust face. He has testified on the DoubleClick merger in 2007 and a year later about the Yahoo ad deal. Drummond is senior vice president and chief legal officer and heads its business development and acquisition teams.

"The probe started after complaints arose arguing that the company favoured its own products in its search results. The attacks claimed that as a result Google was creating its own ad monopoly, thus making fair competition impossible," the IBT explained.

Google does show most of their products in high positions in the search results, but then again their products are popular and could just have more links. But the choice of highlighting the links in the suggestion box does give an advantage even if they do the same thing for other companies' product and brand names in many cases.

The look and feel of Google's search pages can't be determined by legislation. But some other problems have Google facing increased government scrutiny in Washington D.C. and elsewhere.

Google's collection of information via Wi-Fi during the Google Streetview car data collection for Maps projects has been under investigation by numerous governments around the world as a result of the privacy breaches in over 30 countries.

Google is currently addressing EU inquiries, as well as their purchase of advertising company Admeld, and the profits they made from ads for "rogue online pharmacies" are being investigated by the Department of Justice.

Interestingly, Schmidt "outlined how Google calculated the amount of money it was willing to pay for the company; Namely, the value of a deal equals the value of the team plus the value of the year it would spend a Google team to create the same product. He emphasized that M&A at Google was very bottoms up, 'A product manager that has a problem and [needs to] solve that problem' is the raison d’être of a potential acquisition," TechCrunch noted.

Given Forbes believes "Even Google will find it challenging to argue that 'deceptive acts and practices' do not harm consumers. Moreover, Google will find it difficult to defend that it has not been deceptive with consumers in publicly representing Google as user-aligned, unconflicted and unbiased, when the facts powerfully show Google has an advertiser-aligned business model, has serious undisclosed conflicts and biases its dominant search business by self-dealing Google content top rankings while burying the rankings of some competitors. Simply, there is no consumer benefit, competitive justification, or First Amendment free speech right to engage in deceptive practices for financial gain."

The recent foray in to the social space with Google+ will no doubt create its own problems, but at least it has yet to cost the more than $8.5 million paid for Google Buzz privacy breaches.


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