A Visit to Google Land: The Intransparent Methods of an Internet Giant
Google has long insisted that it is "not a conventional company." An increasing number of users, competitors and advertisers are starting to doubt that claim. As the intransparent search engine giant expands its offerings, companies that stand in the way claim they are being made to suffer. Anti-trust agencies on both sides of the Atlantic are listening. By SPIEGEL Staff
Last Monday, visitors to Google's German website, google.de, were not greeted with the site's standard interface, but rather by a comic strip called "Little Nemo in Google-Land." The search engine was commemorating the day in 1905 when the comic-strip character and his fairytale-like dreams were first published in an American newspaper.
Google calls these colorful surprises on its otherwise Spartan search page "doodles." In the original comic strip, the character Nemo experiences his nightly escapades in a place called "Slumberland." Google's minor but cheeky tweak to the title seems fitting. These days, after all, we are all living in "Google-Land."
We live there voluntarily and happily, because Google is fast, easy and free. It's become our all-purpose tool for navigating through everyday life. It sorts out the world for us, performs searches and finds information. And thanks to the triumph of the smartphone, Google is now omnipresent, a sort of Swiss Army knife for the information thicket of the digital age. The world is that which Google presents to us. Nine out of 10 Germans searching for information online -- a number roughly consistent to Google's global presence -- now use the search engine that Sergey Brin and Larry Page launched in 1996 under the name "BackRub." Since 1997, their baby-turned-giant has been named after the number 10 to the power of 100, or googol -- the number one followed by 100 zeroes.
The name choice is an expression of the company's goal of indexing as many webpages as possible. It was an early and seemingly playful claim to omnipotence, one that didn't seem threatening at the time.
And why should it have? "Google is not a conventional company. We do not intend to become one," the founders wrote in the prospectus for their 2004 initial public offering. But now there are growing doubts over whether Google is truly so different from, or so much nicer than, other companies.
Misled and Ripped Off
Some companies complain that they have been booted out of the search engine. Others feel that they are punished when they make decisions Google doesn't like. And industry associations say that customers who depend on Google are misled and ripped off.
The key question is: Exactly how neutral is the company in the way it surveys the world of the Internet?
A good argument can be made that Google is not unlike other businesses, in that it rigorously seeks to leverage its market power, sometimes to the detriment of its customers and users. In the long term, this could affect the company much more adversely than the slide in its stock price, which fell by as much as 10 percent last Thursday on weaker-than-expected earnings.
Google has developed into the key gatekeeper in the interconnected world. Because the search engine decides what we find and in what order, it plays a key role in deciding where we get our information and where we shop.
Although the company promises transparency, it doesn't live up to that ideal when it comes to its own affairs. If Google comments at all on how it arrives at its search results, it does so only vaguely. For example, the company explains that the "relevance" of search results is a decisive factor. In February, a Google lobbyist told a German parliamentary committee that a Google search always looks for "the best response" for the user.
Directly Affecting Sales
Yet the company alone decides what is relevant and what is the best response. And this has serious consequences, both for users and the economy. Nowadays, the wellbeing of a company can depend on where it appears on the list of Google search results, because that position directly affects sales.
The message Google has been at pains to communicate, that search results are neutral and objective, is belied by the fact that the company's business model depends on monetizing its search results. Especially when it comes to searches for products and services, Google-Land is ruled by tangible interests, namely the company's own.
This has created an unhealthy situation in the online market, one in which Google can choose its own customers. The customers, for their part, have no choice but to ally with Google, and spend a lot of money doing so, if they hope to be successful online.
This alone is enough of a problem for many competitors, but it's reinforced by the fact that Google never rests; it is constantly moving into new fields of business, using its size to its advantage. That, though, also increases the number of Google's opponents, who accuse the giant of giving search-result preference to its own products, like "Google Maps" and, in product searches, "Google Shopping." It's both astonishing and telling that Google's critics now come from so many different industries, including tourism, trade and publishing.
So far, however, there has been relatively little criticism of Google on questions of data privacy. The company faced some heat in Germany when it began taking pictures of houses and placing them online through its "Google Street View" feature. Only last week, European Union data privacy experts told the company that it's the company's latest privacy rules do not comply with European standards.
But such minor wrinkles have done nothing to undermine the company's success, especially in light of the relatively small fines for data privacy violations in Germany, which are capped at 300,000. But now something bigger is taking shape in Brussels and Washington. Google has been under preliminary investigation for distorting competition and manipulating search results for its own benefit by the European Competition Commissioner since 2010 and the United States Federal Trade Commission (FTC) since 2011. The core issue is whether Google is abusing its power. The company could face the biggest antitrust suit since the trial against Microsoft in the late 1990s.
Joaquín Almunia, the European antitrust commissioner, told Google Executive Chairman Eric Schmidt in May that he had "concerns" about the company in four areas. The FTC apparently has similar concerns.
- Part 1: The Intransparent Methods of an Internet Giant
- Part 2: Why Google Is (No Longer) Objective
- Part 3: The Pitfalls of Google's Advertising Business
- Part 4: The Lobbying Battle over "Fair Search"
- Part 5: The Government Takes on Google
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