The question ought to be why should a $140 billion monopoly be able to snap up a smaller competitor, not why shouldn’t it.
So it’s good to see some of the press focus on the antitrust angle of Google’s deal to buy ITA, an airline-flight information provider, for $700 million.
The NYT does best (with Reuters close behind) and up high gets at why this ought to give pause:
The deal is another significant step by Google away from how it has traditionally conducted business. Instead of pointing searchers to the most relevant Web sites, the company is increasingly giving information directly to users in categories like shopping or local services like restaurants. Providing information on flights and fares would be a new area for the company.
In other words, it’s increasingly competing with others while it controls how they are presented in its all-important search results.
Why is that okay? It’s one thing for a monopolist to develop its own products internally (although Microsoft, with Internet Explorer, showed why that can be anti-competitive), but acquiring the product is something else. As the Times quotes an antitrust lawyer saying:
Every time Google makes another acquisition, it only reinforces the argument that they are basically trying to acquire other companies that may present potential competition to their core dominance in paid search.”
Well, what about Microsoft’s Bing and Yahoo, you say? Yeah, what about them. I can tell you The Audit gets nearly ten times the traffic from Google searches as it does from Bing and Yahoo combined (thanks, Google Analytics!). And as Floyd Norris writes in the Times this morning, France has declared Google a monopoly for good reason:
“Google holds a dominant position on the advertising market related to online searches,” the French authority concluded. “Its search engine enjoys a wide popularity and currently totals around 90 percent of the Web searches made in France. Moreover, there are strong barriers to entry for this activity.”
And think Google wouldn’t use its immense power to squelch other businesses? Norris again:
Having determined Google has a monopoly, the agency ordered the company to resume offering its services to a French company called Navx, which sells a database to let drivers know where the French police are likely to have radar traps in operation.
Google found Navx’s business distasteful — it is arguable that Navx’s customers use the product to help them act illegally with impunity — so last November, Google stopped doing business with Navx. As a result, those using search terms like “radar trap” in French could no longer learn of the company’s product and, a few clicks later, buy it.
Further complicating this is that Google, despite all its talk of openness, is a black box. Its search algorithms are top secret, meaning it could manipulate them how it likes to favor its businesses in results.
Why does that matter? Norris points us to a comment by Google’s head of search results in the Telegraph, who calls those results ““the biggest kingmaker on this Earth.”
Hyperbole, yes. But that’s a lot of power already. The onus—from the press and from regulators—needs to be on Google to show why we should give them more.Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at email@example.com. Follow him on Twitter at @ryanchittum.