Senate Hearings on Google and their Behavior in Local

Senator Blumenthal (no relationship) interviewed Professor Tim Wu, who last year came out against Google’s Local Universal results as opposed to an alternative result, and Prefessor Meamed as to whether consumers have been harmed by Google’s behaviors, particularly in local.

To paraphrase Prof Wu starting at 01:59 in the video: There was not strong evidence of consumer harm during original case. But subsequent research, particularly in Local, there is evidence that Google is manipulating search in an anti competitive way. There is stronger evidence of consumer harm now. Particularly in local.

Prof Melamed noted that consumer preference for a different product would not in and of itself be a reason for anti-trust enforcement.

Let me know your thoughts. I have trouble seeing how Google controlling their own search site actually does consumer harm. Even more so with the dramatic switch to apps in the past two years.

That being said I have seen concrete indications that Google relies on sites like Yelp to strongly inform Local Universal results to Google’s advantage.

Please consider leaving a comment as your input will help me (& everyone else) better understand and learn about local.
Senate Hearings on Google and their Behavior in Local by

16 thoughts on “Senate Hearings on Google and their Behavior in Local”

  1. As I asked Luther Lowe on Twitter yesterday, “Do you think Google is more of a monopoly today (vs apple and FB) than it was in 2011 (vs ___)?”

    I can’t imagine how anyone makes that case. And if Google’s not a monopoly, I’m not sure how you can hold them to an anticompetitive standard in this case.

    Yelp always has the option to block Googlebot. They have not done so. Until they do, and we still find evidence Google is using their results to inform universal search, I don’t see how this is worth bringing up again.

  2. To the extent that Google includes reviews in the three pack, it would seem that they are offering an open forum for the public to influence consumer choices. If there is a fault, it may be that the shrinking of the 7 pack to a 3 pack may have reduced the opportunity for more competitors to show in the results and thereby limit the size of the market place.

  3. If government can intrude into the affairs of a commercial business and tell it what to do, what’s next.

    We may sometimes think that what Google does is somehow “not fair” but I’d rather let the marketplace determine whether or not businesses like Google succeed, than let the government tell them (and us) what to do.

    It’s Google’s house, so Google should get to make the rules (and live with the consequences).

  4. Based on his questioning it appears that at least one Blumenthal and I think alike!!!!! BRAVO!!!!

    Mike do you know or have reference to the latest data that Professor Wu was referencing?? What is he alluding to?

  5. @dave
    I don’t have any truck with anti trust enforcement although I do think it is more often than not just one capitalist (or a group of them) ganging up on another.

    In this case, the question I have is whether customer preference for one result or another can be construed as customer harm.

  6. @Mike

    We may not agree because of different political views or something, and I can accept that.

    The day may come when the government decides that it’s “not fair” for businesses to be able to pay or to have to pay for SEO work. Then where will we all be? 🙂

    Political agreement or not, I sure enjoy reading about your work and views on SEO!

  7. I guess I’m trying to understand how it’s NOT anticompetitive.

    So, Yelp and other sites are impacting the ranking in the local 3 pack. That still necessitates your involvement in Google local business listings, and still favors Google local business listings. You’re served up Google products, front and center, and incentivized to stay within the Google universe by their inclusion of every piece of data they can serve up in that drill down. Their vision to provide an end-to-end experience from search to conversion on Google.com is working, and with some of our clients (one podiatrist, in particular, we’re having a heck of a time keeping him in the local 3 pack), despite ranking really well in organic results we see a MASSIVE drop in traffic/patient acquisition when we’re not in that 3 pack. With Google serving up their 3 pack of local listings, even if those are impacted by other sites, businesses are crippled if something goes wrong with the local listings.

    I’ve got to be missing something or misconstruing something, right? It seems like every expert I talk to is in agreement it isn’t anti-competitive, and I’m just not grasping it.

    1. @Laura the first question: is Google a monopoly? If the answer is yes (and let’s assume it is although even that’s debatable) then you have to ask: are consumers being harmed? As David has pointed out elsewhere consumers spend the bulk of their time in apps not in search and much of that is not at Google. The only conclusions one can draw from that is either there is no monopoly or consumers are not being harmed.
      The other standard is is Google using their monopoly power to disadvantage other businesses? Again you have to assume that Google is in fact a monopoly. Apple disadvantages other businesses all the time but that is ok because they are not a monopoly. Yelp gets a significant % of their traffic from Google and while their traffic might not be as robust as it was from Google it is still a very big number. The question I would ask of Yelp is since most of their traffic is also now coming from their mobile app how can they argue significant harm?

  8. Hi Laura,
    First of all, being listed in the three-pack does NOT necessitate involvement in Google local business listings. There are plenty of current and historical examples of “unclaimed” listings ranking there.

    There are plenty of analysts who argue (I could myself among them) that Google *needs* to provide an end-to-end experience on Google.com just to stay relevant in their competition with Amazon, Facebook, and Apple. Anything less than that might provide users with a more disjointed experience than what’s available from their competition.

    – Amazon is not (currently) relevant in local search, but product searches only provide content from Amazon sellers.

    – Facebook local searches provide content only from within the Facebook ecosystem, and I don’t see Yelp claiming that FB’s behavior is anti-competitive (even though, ironically, FB presents a FAR greater long-term threat to them).

    – And, interestingly, Yelp has decided to cut a deal with Apple to power reviews and photos across a wide range of industries within Apple Maps. I don’t hear Yelp calling Apple’s behavior anticompetitive because they don’t link out to the websites of other directories, or even the businesses themselves.

    It’s a very self-serving, narrow argument that Yelp is trying to pull off here, possibly because of bad blood from Google’s failed purchase attempt in 2010, but regardless, it’s an argument whose time has passed and misses the forest for the trees.

  9. @Mike

    I would absolutely say that Google is a monopoly, much more so than Microsoft ever was. Other than IE users who don’t change their default search engine, I’d imagine everything is dominated by Google. As to whether or not they’re hurting consumers I can not comment on. But I do believe they are in fact a monopoly when it comes to search engines.

    1. @Da no one would dispute the fact that they are a monopoly in search. But being a monopoly is not illegal. And in fact every Silicon Valley start up dreams of becoming a monopoly (or oligopoly).

      What is illegal are two things. 1)using the monopoly to harm other businesses and 2) harming consumers in some way.

      Those are the tests of our current legal system as to whether anything is amiss.

      If you don’t remember the Microsoft of the late 90’s they were in fact a monopoly and aggressively used that position to disadvantage others (like Google).

  10. @Mike

    I agree Mike. I am not well versed in the legalities of a monopoly so I will not comment there. However, I do think they are a monopoly which was one of the hypothetical questions you posed to Laura. Although, upon reread it you may have suggested that you’re leaning towards they are rather than they are not.

    As for are they using the monopoly to harm other businesses and consumers. Consumers, probably not, other businesses? that’s debatable but I’m not taking a stance on either side with out more info.

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