Search Neutrality

The following letter was sent to Commissioner Almunia, President Barroso, and the College of Commissioners on 11 March 2014:

 

Dear Commissioner Almunia,

CC: Commissioners of the College and the President of the Commission

As the company whose November 2009 Competition Complaint first brought Google’s search manipulation practices to the Commission’s attention, we were troubled by some of your statements recorded in the minutes of the 2075th meeting of the Commission (held on 12 February 2014 and published on the 25 February)[1].

In response to questions about how Google’s proposed transition from natural, relevance-based search results to a pay-for-placement, auction-based system could hope to restore a level playing field or ensure access to innovative new entrants, the minutes record the following:

"As regards the importance of ensuring that SMEs could enter specialised online search markets, Mr ALMUNIA cited a number of technical parameters of the auction system which would ensure that this type of company would have access on non-disadvantageous terms and that the same arrangements, with or without fees, would be applied to both Google’s services and those of its competitors.” (Emphasis added)

If these official minutes provide an accurate account of the exchange, then we must respectfully point out that your answer to this crucial question was misleading on both counts.

First, as anyone who has studied Google’s proposals could readily confirm, Google’s services are not subject to “the same arrangements” as those of its competitors. As you must be aware, under Google’s proposals, only Google’s rivals would pay for placement in Google’s Universal Search box. Google would pay nothing; it would continue to insert links to its own services (together with monetised links derived from those services) in prime positions and entirely free of charge in all cases. In other words, Google would remain the sole beneficiary of the traffic it anti-competitively hijacks (diverts) from rivals, and would now also become the main beneficiary of any traffic it sends to them. If the Commission were to adopt these proposals, Google would gain sole possession of the free, natural search traffic that has hitherto fuelled the Internet revolution, and the Commission will have unwittingly granted Google a five year mandate to increase substantially the anti-competitive advantage Google already affords its own, often inferior, vertical search services.

Second, the proposed auction system does not contain any technical parameters that ensure “non-disadvantageous terms” for innovative SMEs[2]; in fact, the minimum traffic threshold alone would almost entirely exclude new entrants.

As the overwhelming consensus from the two previous market tests made clear, the adoption of Google’s proposals would cause additional grave and irreparable harm to hundreds of European businesses and millions of European consumers.

Google’s proposals offer nothing to end the search manipulation practices it was tasked with remedying, and nothing to restore competition to the vertical search domains that these anti-competitive practices have already devastated, such as product price comparison. But, remarkably, Google’s proposed transition from free, relevance-based listings to pay-for-placement listings for all services except Google’s own introduces an entirely new form of abuse that will, if adopted, directly destroy competition in many verticals that have not yet been devastated, such as travel search, financial search, property search, and job search. As used to be the case with product price comparison, these are currently innovative and highly profitable industries, employing many thousands of people and contributing many millions in tax revenues across Europe. That most of these businesses are currently unaware of the damage that is about to be inflicted on them is not surprising; who could have anticipated that the Commission might allow a dominant company to settle a competition case by substantially increasing the anti-competitive abuse it had been instructed to remedy?

If Google’s proposals were adopted, consumers would not only be harmed by the ensuing lack of competition and consumer choice, they would also be directly and immediately harmed by the transition from relevance-based ranking to auction-based pay-for-placement. In what might be the mother of all unintended consequences, this transition would all but eradicate the considerable value that vertical search services provide to consumers; services that direct users to merchants with the best prices or products cannot compete in an auction against rivals that direct users to merchants that pay them the most. Not surprisingly, studies have already shown that the recent transition of Google’s own product price comparison service from relevance-based-placement to pay-for-placement has led directly to European consumers paying significantly higher prices for products purchased through this service[3].

It is difficult to imagine a Competition case where the stakes for consumers, businesses, and innovation could be any higher. As the gateway to the Internet, Google plays a decisive role in determining what the vast majority of us read, use, and purchase online. The importance of ending Google’s ability to manipulate this unprecedented power to its own anti-competitive ends cannot be overstated. It is no exaggeration to say that the hopes of a digital-led economic recovery may depend on the outcome of this case.

We are struggling to understand why you seem so determined to ignore the overwhelming empirical evidence and consensus of opinion from complainants, market participants, and consumer organisations. We urge you to reject Google’s proposals and pursue a Prohibition Decision that will end, rather than escalate, the abusive practices the Commission has identified.

Yours sincerely,

Shivaun Raff

CEO and Co-Founder, www.foundem.co.uk and www.SearchNeutrality.org (a Foundem initiative)

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[1] http://ec.europa.eu/transparency/regdoc/rep/10061/2014/EN/10061-2014-2075-EN-F1-1.Pdf

[2] For details, see our Response to the Commission’s RFI regarding Google’s second set of proposals: http://www.foundem.co.uk/Foundem_Comments_Google_Revised_Proposals.pdf.

[3] http://www.ft.com/cms/s/2/a004c830-552d-11e3-a321-00144feabdc0.html#axzz2vP0HIhfG

Today, we are publishing Foundem’s Comments on Google’s Revised Proposals (PDF).

 

Today, we are publishing our Initial Analysis of Google’s Proposals (PDF).

 

Today, the European Commission published details of Google’s remedy proposals, marking the beginning of a formal market test.

Over the last several months, a strong consensus has emerged about the minimum standard of remedies that will be required to end the abusive search manipulation practices the Commission has identified. The straightforward and reasonable even-handed principle has already been widely endorsed by Complainants and consumer groups, and, if implemented, would immediately restore the unbiased level playing field that search engine users expect and that competition and innovation require.

As eleven Complainants wrote in an open letter to Commissioner Almunia last month:

“There are two equally important aspects to Google’s search manipulation practices: the systematic promotion of Google’s own services, and the systematic demotion or exclusion of its competitors’ services. Any effective remedies will require explicit commitments to end both aspects; remedying one without remedying the other would simply allow Google to recalibrate the un-remedied practice in order to achieve the same or equivalent anti-competitive effect.

Google’s strict adherence to the following overarching principle would ensure an end to both aspects of Google’s search manipulation practices:

Google must be even-handed. It must hold all services, including its own, to exactly the same standards, using exactly the same crawling, indexing, ranking, display, and penalty algorithms.”

The even-handed principle has also been endorsed by BEUC, the European consumer organisation representing the views of 39 national consumer organisations from across 30 European countries.

Remedies that implement the even-handed principle would, by definition, prohibit Google’s abusive search manipulation practices. They would be straightforward to define, implement, and monitor (for examples, see here and here), and would start acting to restore competition from the moment Google committed to them.

We will withhold final judgement on Google’s proposals until we have had time to analyse them in detail, but we and others will be looking to see how they measure up to the even-handed principle standard. The early signs are that Google’s proposals will fall far short of this minimum requirement.

Instead of promising to end its abusive practices, Google’s proposal seems to offer a half-hearted attempt to dilute their anti-competitive effects, by labelling Google’s own services and throwing in some token links to competitors’ services alongside them. Without robust guidelines that guarantee the placement, depth, prominence, and relevance of these links, and guarantee that the selection of competitors will be free from anti-competitive penalties and discrimination, neither measure will make a dent in Google’s ability to hijack the traffic and revenues of its rivals.

It is difficult to imagine a Competition case where the stakes for consumers and businesses could be any higher. As the gateway to the Internet, Google plays a decisive role in determining what the vast majority of us discover, read, use, and purchase online. The importance of ending Google’s ability to manipulate this unprecedented power to its own anti-competitive ends cannot be overstated. It is no stretch to say that the hopes of a digital-led economic recovery may depend on the outcome of this case.

The following letter was sent to Vice-President Almunia on 21 March 2013:

 

Dear Vice-President Almunia,

RE: COMP/C-3/39.740 – Foundem / Google and associated cases

We are writing to express our common views on the European Commission’s ongoing settlement negotiations with Google. The Commission opened proceedings more than two years ago, and we are becoming increasingly concerned that effective and future-proof remedies might not emerge through settlement discussions alone.

The first point we would like to raise is that the anti-competitive impact of search manipulation far outweighs the Commission’s three other areas of concern regarding Google’s business practices. In addition to materially degrading the user experience and limiting consumer choice, Google’s search manipulation practices lay waste to entire classes of competitors in every sector where Google chooses to deploy them.

The second point we would like to raise is that there are two equally important aspects to Google’s search manipulation practices: the systematic promotion of Google’s own services, and the systematic demotion or exclusion of its competitors’ services. Any effective remedies will require explicit commitments to end both aspects; remedying one without remedying the other would simply allow Google to recalibrate the un-remedied practice in order to achieve the same or equivalent anti-competitive effect.

Thirdly, we are convinced that Google’s strict adherence to the following overarching principle would ensure an end to both aspects of Google’s search manipulation practices:

Google must be even-handed. It must hold all services, including its own, to exactly the same standards, using exactly the same crawling, indexing, ranking, display, and penalty algorithms.

We will respectfully withhold judgement on Google’s proposed commitments until we have seen them, but Google’s past behaviour suggests that it is unlikely to volunteer effective, future-proof remedies without being formally charged with infringement. Given this, and the fact that Google has exploited every delay to further entrench, extend, and escalate its anti-competitive activities, we urge the Commission to issue the Statement of Objections.

Yours sincerely,

Shivaun Raff,
CEO and Co-Founder, Foundem

Helmut Verdenhalven,
Director Government Relations, BDZV Federation of German Newspaper Publishers

Dr. h.c. Hans Biermann,
Chief Executive Officer, Euro-Cities AG

Brent Thompson,
Senior Vice President Government and Corporate Affairs, Expedia Inc.

Michael Weber,
Managing Director, Hot Maps Medien GmbH

Kate Sutton,
Director, Streetmap EU Ltd

Seth Kalvert,
Senior Vice President, General Counsel, TripAdvisor

Bastien Duclaux,
CEO and co-Founder, Twenga

Dr. Christoph Fiedler,
Managing Director European Affairs and Media Policy, VDZ German Federation of Magazine Publishers

Heiko Hanslik,
President, VfT Verband freier Telefonbuch und Auskunftsmedien e.V. (Association of Independent Directory Publishers)

Robert Maier,
Founder and Managing Director, Visual Meta GmbH

On December 31 2012, Foundem co-founders Adam and Shivaun Raff wrote to the FTC’s Commissioners and investigative team. The following is an excerpt from that letter:

We first came to you in May 2010 as an innovative vertical search company that had been deterred from entering the U.S. market by Google’s anticompetitive penalty and self-preferencing practices. We are writing to you now in response to recent reports that the FTC might conclude its antitrust investigation into Google without addressing these anticompetitive search manipulations. In our view, this would be a catastrophic mistake. It is no accident that search manipulation was the issue that sparked the U.S. and European investigations; its insidious, anticompetitive impact outweighs all of Google’s other anticompetitive practices by a considerable margin. While virtually undetectable to users, Google’s search manipulations lay waste to entire classes of competitors in every sector where Google chooses to deploy them.

Foundem is the company that first brought Google’s search manipulations to the attention of regulators on both sides of the Atlantic, and it has remained engaged with the ensuing investigations throughout. From this vantage point, we are concerned that the FTC’s reluctance to litigate against these abusive practices may stem more from misconceptions about the mechanics and financial incentives underlying the abuse than from the constraints of U.S. antitrust law.

In the familiar bricks-and-mortar world, Google’s anticompetitive behaviour would have been obvious to all. But, in the unfamiliar and seemingly impenetrable world of internet search, Google’s ability to get away with these practices has often depended on its ability to confuse, obfuscate, and intimidate.

…It is difficult to conceive of an antitrust case where the stakes for U.S. consumers and businesses could be any higher. Google has been dominant in the U.S. search and search advertising markets for more than a decade, and there is no sign of this changing anytime soon. As the gateway to the Internet, Google plays a decisive role in determining what the vast majority of Americans discover, read, use, and purchase online. The importance of deciding whether or not Google is allowed to manipulate this unparalleled and virtually unlimited power to its own financial ends cannot be overstated…

In May this year, the European Commission issued Google with a public ultimatum. Keen for a "quick resolution" to the concerns it had identified during its eighteen-month antitrust investigation into Google’s business practices, Commissioner Almunia gave Google six weeks to propose "an outline of remedies", with a view to a negotiated settlement, or else face a formal “statement of objections and [the adoption of] a decision imposing fines and remedies.”

The main concern listed by the Commission was that of search manipulation: Google manipulating its search results to promote its own secondary services while demoting or excluding those of its competitors—a practice first described in Foundem’s Complaint to the Commission in November 2009.

By the end of July, Google had conceded enough ground to convince Commissioner Almunia to “proceed with technical meetings to explore the possibility of a settlement”. Note that the settlement procedure being offered to Google (under Article 9 of the EU Antitrust Regulations) can only be used in cases where the Commission’s investigation has already concluded (albeit provisionally) that an infringement has taken place.

We have now passed a crucial tipping point. From here, there are only two possible outcomes, and both involve binding remedies—either committed to voluntarily by Google through a settlement agreement or imposed on Google by an infringement decision. While the process can switch between these two paths at any time, both lead inexorably toward binding commitments designed to end Google’s anti-competitive practices. But, there is an important difference between the two paths: an infringement decision would offer greater assistance to those seeking compensation for past damage.

Google has been remarkably successful over the last several years. Its revenues have soared from $6 billion in 2005 to $37 billion in 2011. But, unbeknownst to its shareholders, Google’s increasingly anti-competitive practices have been quietly accruing billions of dollars of antitrust liabilities. It is impossible to know how many companies have been harmed or destroyed by these practices—it could be hundreds or even thousands—but whatever the number, the consequence of abuse on a grand scale is liabilities on a grand scale.

European businesses that have been harmed by Google’s anti-competitive practices would be able to rely on a formal infringement decision by the Commission when seeking compensation through their own courts. Without an infringement decision, many of these companies (lacking the substantial body of evidence that Foundem’s case brought to regulators) might hesitate or struggle to bring civil actions.

Google needs to reach a settlement with the Commission in order to avoid the tsunami of follow-on litigation that would surely follow an infringement decision. This unspoken need to avoid a guilty verdict at virtually any cost, together with the overwhelming evidence of Google’s anti-competitive practices currently locked behind closed doors, puts the Commission in a far stronger bargaining position than many commentators realise. Anyone suggesting that Google will get away with superficial remedies (a clear and conspicuous label here, a more transparent FAQ there) is almost certainly mistaken.

Today we are publishing a proposed framework of remedies. We suggest that these remedies are reasonable, practical to implement and enforce, and go a long way toward ending many of the abusive practices identified by the Commission’s investigation.

Whatever the final form of the remedies adopted by the Commission, they are likely to have a dramatic impact on Google’s power to stack the deck in its own favour. The success or failure of Google’s secondary services, in travel search, price comparison, social networking, and so on, will once more depend on its ability to innovate, rather than on its ability to hijack the traffic of its competitors.

With the right remedies, users themselves should not see much immediate difference—just a quiet return to the Google search results of old. The richness, variety, and relevance of users’ search results will improve, and the rate of innovation in areas long suppressed by Google’s anti-competitive practices will increase. The potential for appropriate remedies to restore competition and rekindle the growth of the digital economy cannot be overestimated.

The following was first published on May 30 2012, as an Op-Ed for ORGZine (the Digital Rights magazine of the Open Rights Group)

As the gateway to the Internet for the vast majority of users, Google has unparalleled influence over which content and services people discover, read, and use. Before Google’s need for growth compelled it to look beyond horizontal search, this unfettered market power wasn’t necessarily a problem. Google tended to focus its efforts on providing the best possible search results for its users, even though that usually meant steering them to other people’s websites as quickly as possible. Starting around 2005, however, Google began to develop a significant conflicting interest—to steer users, not to other people’s services, but to its own growing stable of competing services, in price comparison, travel search, social networking, and so on.

By manipulating its search results in ways that systematically promote its own services while demoting or excluding those of its competitors, Google can exploit its gatekeeper advantage to commandeer a substantial proportion of the traffic and revenues of almost any website or industry sector it chooses. As a result, there is now a growing chasm between the enduring public perception of Google as comprehensive and impartial and the reality that it has become increasingly neither.

The debate about net neutrality has tended to focus exclusively on the issues of equal access to the physical infrastructure of the Internet (the network), while ignoring the issues of equal access to its navigational infrastructure (the search engines). If we are to protect equal access to the Internet for users, established businesses, and the innovative start-ups that will power the next wave of growth of the digital economy, we must broaden our horizons beyond network neutrality to include the equally important principle of search neutrality.

In October 2009, we defined search neutrality as the principle that search engine results should be driven by the pursuit of relevance and not skewed for commercial gain. Search neutrality is particularly pressing, because Google’s 85% share of the global search market (90% in the UK and 95% in much of Europe) places so much market power in the hands of a single US corporation. And there is ample evidence that Google is already abusing this power. Our European Competition Complaint against Google, submitted in November 2009, describes how Google leverages its overwhelming dominance of horizontal search to unprecedented and virtually unassailable advantage in adjacent sectors.

Despite being one of network neutrality’s most enthusiastic advocates, Google is fighting against the growing calls for search neutrality. In December 2009, we posed a question to Google: how can discriminatory market power be dangerous in the hands of a network provider, but somehow harmless in the hands of an overwhelmingly dominant search engine? So far, Google’s response has been evasive. Because it is difficult for Google to argue against the actual principles of search neutrality—the same principles it has long advocated for network providers—it has contrived an imaginary and fundamentally distorted version to argue against instead.

Clearly, no two search engines will produce exactly the same search results; nor should they. In many cases there is no “right” answer, and no two search engines will agree on the optimum set of search results for a given query. But any genuine pursuit of the most relevant results must, by definition, preclude any form of arbitrary discrimination. The problem for Google is that its Universal Search mechanism, which systematically promotes Google’s own services, and its increasingly heavy-handed penalty algorithms, which systematically demote or exclude Google’s rivals, are both clear examples of financially motivated arbitrary discrimination.

Despite Google’s concerted efforts to derail the search neutrality debate, by arguing vehemently against a form of search neutrality that no one is advocating, the real search neutrality has become an increasingly important focal point for those concerned about the insidious power of search engine bias. Most recently the EPP Group, Europe’s largest coalition of MEPs, declared search neutrality a core component of its Internet Strategy, and BEUC, the European Consumer Organisation, wrote an open letter calling on the European Commission to protect the principle of search neutrality.

In the traditional bricks-and-mortar world, Google’s anti-competitive practices would be obvious to all. In the seemingly impenetrable world of Internet search, however, Google’s ability to get away with these practices has often depended on its ability to bamboozle people: our video deconstructing Google’s recent testimony to the US Senate Antitrust Subcommittee provides the first public glimpse of the extent to which this strategy unravels in the face of informed scrutiny.

Google’s standard reply to the observation that it has a monopoly in search is to point out that “competition is just a click away”. But, Google operates in a two-sided market–with users on one side and websites on the other. While it is true that users have a choice of alternative search engines, the key point is that websites do not. As long as nearly all users continue to choose Google—as they have consistently done for the last decade—then businesses and websites have no alternative search engine by which to reach them.

The competitors Google is referring to when it says “competition is just a click away” are rival horizontal search engines like Yahoo and Bing, but the businesses being harmed by the anti-competitive practices described in our Complaint are not these rival horizontal search engines; they are the thousands of businesses that compete with Google’s other services—in price comparison, online video, digital mapping, news aggregation, local search, travel search, financial search, job search, property search, social networking, and so on.

The unique role that search plays in steering traffic and revenues through the global digital economy means that Google is not just a monopoly; it is probably the most powerful monopoly in history. Given the absence of healthy competition among search engines, and Google’s growing conflict of interest as it continues to expand into new services, there is an urgent need to address the principles of search neutrality through thoughtful debate, rigorous anti-trust enforcement, and perhaps very careful regulation.

Adam and Shivaun Raff,
Co-Founders of www.foundem.co.uk and www.SearchNeutrality.org

We welcome today’s news that the European Commission has written to Google, outlining its preliminary conclusions that Google may have abused its dominant position and seeking a swift resolution to the issues it has identified. The Commission has effectively delivered an ultimatum to Google, offering the company “a matter of weeks” to propose its own remedies or else face a formal Statement of Objections and the hefty fine and imposed remedies that would almost inevitably follow.

Foundem’s Complaint, filed in November 2009 and updated in February 2010, was the first to document how Google systematically manipulates its ostensibly neutral search results to promote its own services while simultaneously demoting or excluding those of its competitors. We are pleased that the Commission has affirmed Foundem’s Complaint, listing search manipulation as its first concern.

Foundem’s goal has always been to ensure that Google exercises its extraordinary market power responsibly, by reinstating the level playing field that is required for innovation and competition to thrive. We have always emphasised the need for a swift end to Google’s anti-competitive practices, and we are pleased that the Commission is pursuing a path that could result in the particularly rapid deployment of binding remedies.

With the imposition of remedies now all but inevitable, it is crucial to devise pragmatic and robust measures that restore a healthy competitive Internet, without thwarting the ability of dominant players like Google to innovate. This will require thoughtful and nuanced consideration, and we look forward to participating in this important process.

Background

There is a growing chasm between the enduring public perception of Google as comprehensive and impartial and the reality that it has become increasingly neither. Before Google’s need for growth compelled it to look beyond horizontal search it really could focus on fulfilling its promise to provide the best possible search results for its users, even though that usually meant steering them to other people’s websites as quickly as possible. But, starting around 2005, Google began to develop a significant conflicting interest: to steer users, not to other people’s services, but to its own growing stable of competing services.

By manipulating its search results and ad listings in ways that systematically promote its own services while demoting or excluding those of its competitors, Google can exploit its gatekeeper advantage to commandeer a substantial proportion of the traffic and revenues of virtually any website or industry sector it chooses. This power to directly cut off a competitor’s access to customers is rare in competitive relationships, and it has created the far reaching and profoundly troubling conflict of interest that lies at the heart of Foundem’s Complaint.

Foundem has spearheaded the campaign to bring Google’s anti-competitive practices to light and subject them to public and regulatory scrutiny on both sides of the Atlantic. Our evidence to the Commission included search-ranking scattergrams demonstrating the breathtaking extent of Google’s preferential treatment of its own price comparison service over its rivals, as well as traffic charts demonstrating the resultant dramatic drops in visitor numbers to Google Product Search’s leading competitors. This study was the first of its kind and probably remains the most compelling illustration of the anti-competitive power of Google’s Universal Search mechanism. US Senator Lee focused extensively on a scattergram from one of Foundem’s more recent studies during last September’s Senate Antitrust hearing into Google.

Crucially, the businesses being harmed by the anti-competitive practices described in Foundem’s Complaint are not Google’s rival horizontal search engines such as Bing or Yahoo. They are the thousands of businesses that compete with Google’s other services—in price comparison, online video, digital mapping, news aggregation, local search, travel search, job search, property search, financial search, and so on.

In the traditional bricks-and-mortar world, Google’s anti-competitive practices would have been obvious to all. In the seemingly impenetrable world of Internet search, however, Google’s ability to get away with these practices has often depended on its ability to bamboozle, deflect, and obfuscate. Behind closed doors, Google’s confuse-and-conquer strategy has been unravelling for well over a year; Foundem’s video deconstructing Google’s recent testimony to the US Senate Antitrust Subcommittee provides the first public glimpse of the extent to which this strategy crumbles in the face of informed scrutiny.

Additional Information

• Google Bamboozles: Deconstructing Google’s Written Response to the Senate Antitrust Subcommittee
• Penalties, Self-Preferencing, and Panda: Why Google’s Behaviour Makes Antitrust Sanctions Inevitable (PDF)
• Foundem’s data demonstrating Google’s self-preferencing through Universal Search
• Overview of Foundem’s Complaint
• Foundem’s New York Times Op-Ed arguing for Search Neutrality
• Foundem’s video deconstructing Eric Schmidt’s September 2011 testimony to the US Senate Antitrust Subcommittee (or see here for the original longer version).

Last Friday, November 4, Google Executive Chairman Eric Schmidt submitted his written response to questions posed by the Senate Antitrust Subcommittee, following his testimony before the Committee in September.

Foundem’s Video deconstructing key elements of Mr Schmidt’s testimony before the Senate Antitrust Subcommittee in September 2011 (See here for the original full-length version of this video)

In a traditional bricks and mortar world, Google’s anti-competitive practices would be obvious to all. But in the unfamiliar and seemingly impenetrable world of Internet search, these practices are often predicated on Google’s ability to bamboozle, confuse, and obfuscate.

Behind closed doors, Google’s confuse-and-conquer strategy has been unravelling for over a year. Now, Mr Schmidt’s public testimony and written answers to the Senate Antitrust Subcommittee provide the first public glimpse of the extent to which Google’s paper-thin defence crumbles in the face of informed scrutiny.

A few of Mr Schmidt’s written answers seem gratuitously evasive. Many are markedly at odds with Google’s existing documents and prior statements. And some are just plain wrong.

The significant inconsistencies and inaccuracies in Mr Schmidt’s testimony at the hearing have only been amplified by those in his written answers. Taken together, the two misleading and often contradictory accounts seem to reveal a company beginning to sense that it has already lost the argument.

We suggest that our recent video (above), which deconstructs several key elements of Mr Schmidt’s testimony, is essential viewing for anyone wanting a better insight into some of the breathtaking semantic acrobatics of Mr Schmidt’s testimony and written responses.

The following are just two examples of Mr Schmidt’s problematic written answers following the hearing:

Is Google Product Search a Price Comparison Service?

During the hearing, Senator Lee referred extensively to a Foundem study examining the comparative Google rankings of the US’s leading price comparison services, including Google’s own Google Product Search. In the hearing, Mr Schmidt ducked several of Senator Lee’s questions about the troubling findings of this study with the bizarre claim that Google Product Search is not a price comparison service.

In our blog post immediately following the hearing we demonstrated the fallacy of this claim with evidence that included a screenshot of Google’s own description of Google Product Search as a “price comparison service”.

Senator Lee’s post-hearing follow-up question:

On September 28, 2011, a search query on Google for “UK product search” returned Google Product Search as the first result, described as “Google’s UK price comparison service.”
Is Google Product Search a price comparison service?

Mr Schmidt’s written response:

Google product search is a type of thematic search that allows consumers to compare prices and see which websites are selling a particular product.

In other words, “Yes.”  As Mr Schmidt will be aware, all price comparison services can be described as “a type of thematic search that allows consumers to compare prices and see which websites are selling a particular product.”

It is difficult to understand how Mr Schmidt could have been so confused about this straightforward point during his original testimony. Google’s systematic favouring of its own price comparison service through Universal Search is an issue that has been central to formal antitrust investigations on both sides of the Atlantic for well over a year.

Does Google Favour its Own Services?

Although Mr Schmidt now concedes that Google Product Search is in fact a price comparison service, his written answers duck many of the same questions again – but this time by claiming that Google Product Search and other specialised Google services are not in fact “services”.

Senator Lee’s post-hearing follow-up question:

Are Google products and services subject to the same search-ranking algorithmic process as all other organic search results?

Mr Schmidt’s written response:

…what is crucial to understand is that thematic search results are not separate “products and services” from Google…Because of this, the question of whether we “favor” our “products and services” is based on an inaccurate premise. These universal search results are our search service—they are not some separate “Google content” that can be “favored.”…

Even if this were true, it would make no difference to the correct answer to the question. Whether Google Product Search, Google Maps, Google News, Google Places, Google Travel, Google Finance, and so on, are considered “services”, “products”, “off-shoots”, “sub-sections”, “sub-categories”, “thematic collections of search results”, “bananas”, or “hoojamaflips” makes no difference; as long as Google owns them, and profits from driving traffic to their pages, then what Google now chooses to call them is entirely irrelevant.

But of course, it isn’t true. Because these Google services are in fact “services”, no one should be surprised to learn that Google has consistently and repeatedly referred to them as such in all manner of places and circumstances. For example:

“The Google Product Search service is provided AS IS and Google expressly disclaims to the fullest extent permitted by law all express, implied, and statutory warranties regarding the information included therein. Under no circumstances shall Google be liable to any user on account of their use, misuse, or reliance on the Google Product Search service.“

Google’s About Google Product Search page, as of November 8 2011

And

“The Google Maps service includes search results such as business listings, images, and related information provided by third parties.”

Google’s Terms of Service for Google Maps, as of November 8 2011

Even Search Engine Land (which many have accused of being fervently pro-Google) was moved to take issue with Mr Schmidt’s claim:

“Google most certainly does have separate products and services, despite what Schmidt repeatedly told Congress today. It’s disingenuous, at best, for him to claim that YouTube, Google Maps, Google News and other Google products that appear as universal search results aren’t actually separate products. They are.”

Search Engine Land, November 4 2011

Unfortunately, Mr Schmidt repeatedly restates this claim to avoid answering several of Senator Lee’s related, post-hearing questions. For example:

Senator Lee:

Does Google display Google [Product Search] results within its natural search results without any label identifying them as Google results or as otherwise distinct from true “search results”?

Mr Schmidt:

As stated in my response to Question 1, universal search results are not separate “products and services”; they are our “true” results.

And

Senator Lee:

What has Google done to let its users know that its natural search algorithm gives preference to Google’s own products and services?

Mr Schmidt:

As described in my response to Question 1 above, I believe that the premise of this question is incorrect.

We suspect that, in time, Google will reflect on this period with a sense of shame and regret.

If Google can justify promoting its own services through Universal Search while demoting its competitors for the lack-of-original-content that is a defining characteristic of all search services, then why does it not simply stand up and say so?

We are quite certain this is a debate Google will ultimately lose. But it is a debate that should have started two years ago. It is time for Google to come clean and start arguing its position based on facts rather than on forever shifting fiction.