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ConsumerWatchdog.org: Leaked Google Presentation Meant To Counter Fed Inquiries On Competition

CONTACT:Posted byBy THE INDUSTRY STANDARD

Fri, May 8, 2009 at 3:56 pm

    Is Google a monopoly? That question, which is increasingly gaining the attention of regulators in Washington, D.C., is also the subject of an intense public relations war between Google and detractors.

    Today, a new front was opened up, after a consumer advocacy group released a copy of a Google presentation on Google’s business practices, along with critical commentary that casts doubt on Google’s claims that it supports competition. The group, ConsumerWatchdog.org, said that the Google presentation is part of a campaign to counter federal inquiries into potentially anticompetitive practices.

    The presentation is titled, "Google, Competition and Openness." The annotated version refutes many of the specific points made by Google.

    The 26-page PDF starts out with headlines from 2008 that suggest Google has gained too much power. They include a July 22, 2008 Cnet column, "So when do we get over with it and declare Google a monopoly?" The Google presentation then compares this sentiment to headlines from the late 1990s, when other companies such as Yahoo and Lycos were viewed as powerful online properties. At the bottom of this page, it states "The Lesson: Search has always been a highly competitive space — and companies can’t get too comfortable."

    The annotated version of the page from ConsumerWatchdog.org crosses out the last six words of this statement and adds "Now … Google market share 72% (including YouTube)."

    Another page of the Google presentation presents Forrester research that found most consumers are willing to switch search engines, with 55% using multiple search engines each week. The commentary in the margins called the data a "diversionary tactic" and said "Most advertisers can’t switch … Antitrust/monopoly problem is with search advertising and search ad syndication, NOT search engines."

    The last page of the presentation concluded with Google’s claim that "Google welcomes competition because it stimulates innovation, makes us all work harder, and provides users with more choice." The margin comments expressed a different conclusion:

        Charm offensive doesn’t match actions

        Competition: All for it when DOJ believes you’re anti-competitive and seeking to extend monopoly, but different tune when marketing advertising dominance of AdWords, PageRank, etc.

        Openness: Pushes "open" on competitors, but not itself … Among the most non-transparent on ad auction system, quality score, Page Rank, use of private user data, Google.org, etc.

        Privacy: Silence is deafening … no discussion here at all of privacy record, despite practices being high on FTC/Congress agenda and privacy groups (e.g. Privacy Intl.) ranking privacy practices worst in the world.

    John M. Simpson, a consumer advocate working for ConsumerWatchdog.org, said that the original Google document and the commentary came from a "source we trust," but he declined to describe who that person was. The ConsumerWatchdog.org press release described the anonymous author of the commentary as "an expert."

    Google confirmed that the original presentation was authentic, but said that it had nothing to hide. Adam Kovacevich, Google’s senior manager for Global Communications and Public Affairs, said that the presentation had been shown to 30-40 groups and individuals in Washington, D.C., New York and Europe over the past three months. He said the audiences included policymakers, ad agencies, think tanks and academics. He declined to identify the policymakers by name, but said they included congressional staffers on Capitol Hill.

    "This [presentation] was really borne out of our experience in the last two years in realizing that we needed to do a much better job in telling people about our approach to competition," Kovacevich told The Standard.

    Kovacevich said he did not know who released the presentation to ConsumerWatchdog.org or who wrote the commentary.

    Kovacevich, who also narrated the webinar version of the presentation, told one of his audiences on April 9 that "the whole idea of locking users into our services is not something that we adhere to philosophically as a company."

    ConsumerWatchdog.org disagreed. "It’s pretty clear that Google is feeling the heat, appropriately, [because of] the Justice Department inquiry into the Google Book settlement," Simpson told the Standard. "Google wants to put their best story forward … [but] if they’re out there spinning it, it is important that other facts be made available."

    Google presentation with commentary (source: ConsumerWatchdog.org)

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