The Daily Caller

The Daily Caller
A man stands in front of a Google logo before a talk titled "Connecting with the World Empowering Young Entrepreneurs for the New Digital Age" by Google Executive Chairman Eric Schmidt (not seen) at the Chinese University of Hong Kong November 4, 2013. REUTERS/Bobby Yip A man stands in front of a Google logo before a talk titled "Connecting with the World Empowering Young Entrepreneurs for the New Digital Age" by Google Executive Chairman Eric Schmidt (not seen) at the Chinese University of Hong Kong November 4, 2013. REUTERS/Bobby Yip  

More than just a search engine: Google flexes its global political muscle

Photo of Erik Telford
Erik Telford
Vice President, Franklin Center

We may have first gotten to know Google as a search engine, but it’s grown into one of the world’s most influential corporations. From Gmail and YouTube to Google Books and Google Wallet, Google products touch our lives in almost every way imaginable, and the digital giant is constantly expanding into more sectors of the economy. However, Google’s corporate growth hasn’t come without a lust for political muscle, and the Internet behemoth has run afoul of authorities around the world as it attempts to broaden its economic and political power.

The European Commission, the executive arm of the European Union with antitrust watchdog powers, has been investigating Google since 2010 and is growing more impatient with the search giant’s obstinanace by the day. The EC alleges that Google — which controls over 90 percent of the European search engine market — manipulates its search results to favor Google and its advertisers’ products over competitors, particularly when consumers enter a search term suggesting that they’re in the market to buy.

If true, these business practices aren’t just dishonest and harmful to the spirit of free market competition, they run afoul of the antitrust laws of almost every industrialized nation. In Europe, regulators are threatening to drag Google through a protracted court battle that could result in billions of dollars in fines. The EC has given Google several opportunities to negotiate a settlement, but the corporation’s hard-line approach has worn thin the patience of European attorneys and regulators.

Even if Google manages to reach an eleventh-hour settlement in Europe — which could cost hundreds of millions of dollars — its international troubles may only be beginning. Canada’s Competition Bureau recently launched its own investigation of Google, alleging many of the same abuses of power and anticompetitive practices that the European Commission is. The Canadian investigation also includes damning claims that Google manipulates and places special restrictions on its AdWords product, designed to thwart its competitors ability to advertise.

Both international investigations are strikingly similar to a case the Federal Trade Commission brought against Google in 2012. The American antitrust regulatory body seemed ready to deal a crippling blow to the corporation’s hegemony over the Internet, but Google walked away with a non-binding “handshake” settlement in which it agreed to make minor changes to its search functions and was not required to pay any damages — and neither the FTC nor any other government body has any mechanism to enforce the agreement should Google decide not to comply.

Google’s great escape from the FTC’s hammer fell curiously close to the start of President Obama’s second term — a term he won with the help of over $1.5 million in contributions from Google employees, specially-designed voter outreach software built by Google for the campaign, and a close relationship with Google executive chairman Eric Schmidt, the president’s informal technology advisor. There’s nothing illegal about Google’s political machinations, but its cozy relationship with the White House and the timing of its sweetheart deal with Obama’s FTC is fishy.

Like all global corporations, Google faces choices about how it conducts business, whether it will follow the written and unwritten rules of fair commerce and competition, and how it interacts with political leaders. Time and again, Google has placed power ahead of integrity, and so long as its political allies remain in power, it won’t have to click on “I’m Feeling Lucky” to stay one step ahead of the competition.

Erik Telford is Senior Vice President of the Franklin Center for Government and Public Integrity.