Google antitrust deal sets stage for bigger fight

April 8, 2011

By Robert Cyran
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The U.S. government’s agreement to allow Google to buy Internet travel programmer ITA Software — with a few sensible restrictions — is just the appetizer. The main course in the extended meal shared by Washington and Silicon Valley will be control of the huge markets for broad Internet search and mobile operating systems.

Travel companies such as Expedia and Hotwire lobbied against Google’s acquisition of ITA, which makes software for many airfare and travel search websites, travel agents and airlines. Their fear was that Google would use its new subsidiary to gain an unfair advantage in online travel search. Stipulations that Google must continue to develop ITA’s software, license it out to rivals and ring-fence their data should reduce these concerns.

Yet travel sites aren’t the only businesses complaining that Google uses its powerful position to its own advantage. The company has about two-thirds of the U.S. market for Internet search and a share in excess of 90 percent in parts of Europe. And Android, its operating system for mobile phones, may be following. It is now the most popular smart phone operating system, with a rapidly growing 33 percent slice of the U.S. market, according to comScore.

This brings the ability to sway large numbers of consumers. For example, critics of the ITA deal claim Google favors its own services in searches, making them appear higher up in the list of results. The company counters that tying together its products — such as travel data, online calendars and maps — makes them more useful and that, as a result, they deserve to be more prominent.

Google’s best defense, though, has long been to say that users can always just click on a rival search engine. But regulators are now being asked to question that notion. For example, Microsoft says Google-owned properties such as YouTube unfairly wall off data, thereby making other search sites’ results less reliable. Other critics say Google may start locking out phone manufacturers from the latest versions of Android if they work too closely with its search rivals or upcoming ones like Facebook.

It took nine months for U.S. regulators to decide about the ITA purchase. It will take far longer to figure out whether Google is acting unfairly with its search engine and Android.

Comments

If Microsoft can sue Google because “Google made it hard for Microsoft’s mobile phone software to show videos from YouTube” Then Microsoft should compensate all web developers for having to write multiple websites just to compensate for Internet Explorers lack of W3C compliance. I started developing webpages in 1992 in Hawaii (where tourism is huge, and I was one of the only web developers), but I gave up trying to build beautiful pages that could display properly in HTML compliant browsers and NON-compliant Internet Explorer! Microsoft’s non-compliance of the W3C standard (of which they are a member, but have always defied) cost me a very lucrative career.

Posted by konaboy | Report as abusive
 

You have to admit, it is pretty ironic that after all these years of suffering Microsoft (MS)systems’ abuse, they (MS) have the audacity to complain about software development. Google’s success partly derived from the failure of MS to really lead the future and their protection of everything MS based.

Posted by Libertarian1976 | Report as abusive
 

This is very interesting, but I think you have left the bigger meat of this article unexplored. This issue brings up the increasing importance of Google as one of the most potent antidotes to corporate advertising by virtue of its imperviousness to corruption by big money. This will be the lynch-pin issue regarding the fight over a free global super-society and the Orwellian Corporate State envisioned by the major news networks and Western Geo-political elite. Project for a New American Century vs. Ecotopia!

Posted by Greenfelder | Report as abusive
 

What I see is very large companies who preach merit and open market, but resort to lawsuits and lobbying because they really can’t compete.

In other words, hypocrites.

Because NO ONE is forcing us to use use Google products and services. We use them because they ARE better.

Posted by LBK2 | Report as abusive
 

Of all the Internet giants, Yahoo has, albeit unintentionally, contributed more to the American economic development via search engines than any other.

This happened before Icahn forced its control on Yahoo and ruined its lofty philosophy.

Yahoo created the idea of a search engine. If Yahoo sought intellectual property protection on the search engine idea, Google would either have to be a subsidiary of Yahoo, or must pay hefty royalty to Yahoo, enough to fend off Icahn’s hostile moves.

Imagine how much creativity and excellent innovation on searches that hypothetical situation would have stifled, if Yahoo had imposed its intellectual property right. Likewise, the antitrust judges and lawmakers need to heighten their knowledge and sharpen their awareness about the sensitivity of creative industries to over-regulation and under-regulation. Over focus on short term gains results in myopic legal policies that restrict long term growth.

Posted by CommonSensLogic | Report as abusive
 

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