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One More Time with Feeling: Google's a Monopoly

The Senate hearing wasn’t titled “Power of Google” for nothing! In fact, Google’s “monopoly” power came up over 30 times. Here are some of the top quotes and exchanges:

Sen. Kohl: “Your market share constitutes monopoly.”

Sen. Kohl: “Under common antitrust standards, this kind of a market share is considered to constitute monopoly power. Does Google recognize that as a monopolist or a dominant power special rules apply that there is conduct that must be taken and conduct that must be refrained from?” “But you do recognize that in the words that are used in antitrust kind of oversight, your market share constitutes monopoly, dominant — special power, dominant firm, monopoly firm. Do you recognize you’re — you’re in that area?”

Google Chairman Eric Schmidt: “I would agree.”

Schmidt responded to Sen. Kohl: “I would agree, Senator, that we’re in that area. Again, with apologies because I’m not a lawyer, my understanding of monopoly findings is this is actually a judicial process. So I’d have to let the judges and so forth actually do such a finding. From our perspective, we see ourselves as having a special responsibility to debate all the issues that you are describing with us now. We do understand it.”

Sen. Lee: “This market power has essentially made Google a monopoly gatekeeper to the Internet.”

Sen. Lee: “A former Reagan administration antitrust chief recently suggested that this market power has essentially made Google a monopoly gatekeeper to the Internet.” “Whether or not Google formally qualifies as a monopoly under our antitrust laws, one thing is clear: Given its significant ability to steer e-commerce and the flow of online information, Google is in a position to help determine who will succeed and who will fail on the Internet.”

Former DOJ Assistant Attorney General, Tom Barnett: “As this committee recognizes, undoubtedly, Google has monopoly power in search and paid search advertising.”

Barnett: “Let me tell you what I’m talking about. The first element of a Section 2 monopolization claim is, is Google a dominant company; do they have monopoly power? I think, as this committee recognizes, undoubtedly, Google has monopoly power in search and paid search advertising. You don’t have to take my word for it. You all heard it. Both the Department of Justice and Federal Trade Commission have conducted extensive investigations in this area, and both of them, the expert agencies, reached factual determinations that show that Google has a monopoly power.” “If you have an 80 percent share of the market with barriers to entry, you have monopoly power. And those barriers don’t come from the supposed cost of switching or clicking to another site. The barriers come from building an effective search engine.” “So from a Sherman Act monopolization/monopoly maintenance perspective, is there a problem? Yes, there is a problem if Google is engaging in any improper conduct to maintain or to expand its dominance.” “I consider Google to be a dominant company with monopoly power at least in search and search advertising; likely in other markets — its mobile search, mobile advertising; mobile operating systems, it’s quickly moving in that direction; maps and a number of other areas.” “And I think that they are — have monopoly power both because there are expert agencies who have looked into this and — and concluded that. But I take the words of Mr. Schmidt, there are huge barriers to entry to getting into search.” “There is no doubt that a dominant company with monopoly power can harm competition in a way that a company without that monopoly power cannot. And that puts a special responsibility on the company to engage in fair competition on the merits, and not to exclude competitors.” “First of all, remember they are an advertising company. They made $30 billion last year in advertising. And given that they’re dominant in advertising, a good portion of that is already monopoly rents.”

Yelp CEO Jeremy Stoppelman: “Allowing a search engine with monopoly market share to exploit and extend its dominance hampers entrepreneurial activity.”

Stoppelman: “Google first began taking our content without permission a year ago. Despite public and private protests, Google gave the ultimatum that only a monopolist can give: In order to appear in web search you must allow us to use your content to compete against you.” “Today represents a rare opportunity for the government to protect innovation, allowing a search engine with monopoly market share to exploit and extend its dominance hampers entrepreneurial activity. Ensuring open and equal competition will sustain and foster innovation and job growth. It will also ensure that the price of Internet advertising paid by small businesses will not — will be set by the market and not solely by a monopolist.”

And, what did Google’s counsel, Susan Creighton have to say about the rampant use of the “m” word?

Creighton: We sometimes can use market shares as an indicia of whether or not there is monopoly power, but the real question is is there this ability to foreclose competition or to raise prices.

Sen. Franken to Creighton: “But — and you — you said a monopoly is something that’s over 80 percent. But on mobile, it’s 97 percent, isn’t it, the concentration for — for Google?

Sen. Blumenthal to Creighton: And so far as monopoly power is concerned, you don’t think it’s relevant that its nearest competitor has less than 30 percent, is losing money, and consumers — I understand the contention that competition is only a click away, but there are very strong barriers to entry, are there not?

Creighton responded: “Senator, respectfully, I do not believe that Google does have monopoly power and I’d like to explain why. So — so what we’re looking for in the antitrust laws in terms of whether or not a company is — is a monopoly is really whether it has monopoly power. And the way we look at that is whether or not the company, if it were to raise price or to exclude competitors, is there something that would cause consumers to be unable to switch and so the company basically can get away with it.”

Pat yourself on the back if you can decode her answer.

Interested in more? Check out the full hearing transcript.