Google’s Eric Schmidt faces barrage of questions from senators

In a long-anticipated hearing before the Senate Judiciary Committee, Google Executive Chairman and former CEO Eric Schmidt insisted that the search engine company “gets it” — that is, they get that their company is facing enormous scrutiny for its business practices.

Sitting alone at the witness table in front of a skeptical panel of senators, who had threatened to subpoena him if he did not personally testify, Schmidt defended Google against growing allegations that the company not only has a monopoly over Internet searches, but also that it is actively barring competition through its search algorithm — the programming that determines which Web pages are listed first after entering a search query.

“Absolutely not,” Schmidt reiterated multiple times, adamant that Google operated in a way that Washington didn’t quite understand.

“We get it. We get the lessons of our corporate predecessors,” he said, indirectly referencing Microsoft’s antitrust case from a decade ago, when Bill Gates was brought before the same committee to answer congressional inquiries, only to be slapped with an antitrust lawsuit by the Department of Justice months later.  “We also get that it’s natural to question some of our business practices,” Schmidt added.

The hearing addressed not only the company’s practices, but also Google’s place in a world where businesses can live or die by placement on a search engine’s result page. 

Google commands up to 70 percent of all Internet searches by computers, and 95 percent of mobile searches, a fact cited by Committee Chairman Herb Kohl, Democrat of Wisconsin, who raised questions about monopolistic power. Under current regulation, such a large market share could be considered monopolistic. (RELATED: Facebook decides which posts are interesting to you)

At the same time, Google has been accused of leveraging its dominance in search to promote its own products, such as Google Maps and Gmail. Google products occupy the top of many search results, often knocking out its online competitors.  It is unclear — and a concern for antitrust enforcers and free market advocates alike — whether this is a reflection of consumer preference, or a built-in bias toward Google products.

Kohl, who has been working on antitrust issues for decades, took particular issue with Google’s claim that they were working to provide consumers answers to questions, rather than pointing them to a page containing the answer.  “Isn’t that a fundamental conflict of interest, when you own many of the services providing the answers?” asked Kohl.

“I’m not sure Google is a rational business trying to maximize its profits,” Schmidt responded.  Though he acknowledged throughout the hearing that Google needed to be responsible for its competitive practices given its market share, he denied after the hearing that Google was an outright monopoly.

Balancing the testimony was a second panel with the CEOs of two Google-dependent companies, Yelp! and Nextag. The businessmen testified that Google had been “scraping” content from their sites and using it to enhance their own competing products such as Google Places.

“Google forces review websites [like mine] to provide their content for free to benefit Google’s own competing product — not consumers,” said Jeremy Stoppelman, co-founder and CEO of the popular review site Yelp!, in written testimony.  “Google then gives its own product preferential treatment in Google search results.”