Is It Wise Or Fair To Break Up Google?

In its most aggressive position against Google yet, Consumer Watchdog on 21 April asked the US Department of Justice to sue the search engine and suggested the government agency could break up Google into several companies.

Consumer Watchdog advocate John M. Simpson argued that the government must go beyond opposing Google’s attempts to grow its search and advertising businesses with services such as Google Book Search and by subjecting Google’s $750 million bid for mobile ad provider AdMob to intense scrutiny.

“Google exerts monopoly power over Internet searches, controlling 70 percent of the US market,” Simpson wrote in a letter (PDF) addressed to US Attorney General Eric Holder and his team at the DOJ. “For most Americans – indeed, for most people in the world – Google is the gateway to the Internet. How it tweaks its proprietary search algorithms can ensure a business’s success or doom it to failure.”

Are the monopoly accusations fair?

The problem with Simpson’s monopoly argument, as Google and legal experts have noted in the past, is that Google doesn’t force what is roughly 65 percent of the people in the United States to use its search. Users come and go as they please and may take their data with them.

It is fair to point out that Google does make it hard for users to want to leave its service because it offers several web services on top of search, including Gmail and YouTube.

Users who create email and videos with these apps store them in Google’s cloud computing infrastructure. Users who opt to use these services are (or should be) aware of this when they sign up and can leave at any time.

The advocate also argues Google tweaks its search algorithms in a deliberate effort to keep down other businesses while serving its own interests. Google search results are based on a number of  mathematically-based signals, but the main arbiter is the PageRank algorithm.

Companies in Europe, such as Foundem, are arguing that this approach hurts their business. These arguments that have yet to be fully tested in court.

More interesting is that the advocate for the first time suggested the DOJ break the company up into several separate companies or at least regulate it as a public utility. Simpson suggested search could be separated from advertising.

He added: “Gmail and its new social networking service, Buzz, could be spun off as a separate entity as could YouTube, a Google acquisition that we believe should have been denied at the time of merger. Enterprise applications could be another separate business.”