Google's Anti-Small Business Strategy

The House Judiciary Subcommittee held a hearing this week to look at the “Oversight of the Antitrust Agencies.” This hearing presented another opportunity for lawmakers to discuss how to deal with Google’s growing dominance in the online marketplace. In his commentary on the hearing, Steve Pociask, president of the American Consumer Institute, discussed the danger presented by Google’s growing market power. In his article, he pointed to ZDNet’s blog post last week in which Tom Foremski (who you may remember) exposed Google’s “secret war” on small businesses and Google’s strategy to “set itself up as the largest affiliate and displace the hundreds of thousands of small businesses that make money from affiliate marketing. It wants to be the main affiliate for online sales of branded products and that’s why its organic search results heavily favor large companies — the brand owners.”

Foremski pointed to Google’s revenue reports in 2010 and 2011 to support his argument. In 2010, Google’s revenues barely kept up with growth in revenue from its AdSense partner network. But in 2011, that trend completely reversed itself and Google sites’ growth increased significantly while growth from the partner networks slightly decreased.

How did Google manage to reverse this trend is such a small period of time? Foremski asserts that “Google managed to shift traffic and revenues from its partner network to its own. That means it keeps all the revenues — it doesn’t have to give away 80% of AdSense revenues to partners.”

Google’s behavior is anticompetitive, harmful to small businesses and is causing job losses. It’s time to put a stop to this. Visit the FairSearch.org Advocacy Center and tell your member of Congress to protect small businesses and healthy competition on the Internet.