Tag: scrutinizing

Google’s merger with ITA helped it grow into the giant that the Justice Department is scrutinizing

Google critics and rivals have long warned the search engine is threatening countless industries from shopping to travel by consistently pointing people to its own products and services on the biggest search platform on the Web. And those competing against Google to win over consumers say that the search engine forces them to pay their biggest rival in advertising dollars just to show up.

Google’s dominance in search has drawn more regulatory scrutiny and criticism from rivals and lawmakers in recent months, something that is expected to culminate in the Department of Justice filing an antitrust suit against the company in the coming weeks. Lawmakers are also preparing new legislation to rein in tech’s power, following the publication last week of a congressional investigation that found Google engaged in anticompetitive tactics.

The case by the Justice Department would be its biggest swing yet to rein in the power of tech giants in decades, and the stakes couldn’t be higher. But some who warned the government a decade ago say it may be too late.

Google “is a monopoly, without question,” Barry Diller, chairman of Expedia and IAC, said in an interview. Google has been great for consumers, Diller said, but it increasingly restricts competitors by making it more expensive to compete in online advertising. Expedia and IAC sites are pushed down the page in favor of Google’s own services, he said.

“Google is essentially competing with our services while taking our money,” he said. “I don’t want the person I’m spending billions of dollars with to compete directly against me.”

Ten years ago, the government had a chance to block the purchase of a travel software company that now powers Google’s flight searches. Even though the government found it might cut into consumer choice, regulators approved it with just a few conditions.

The travel company, ITA Software, made a powerful engine used by Hotwire, Orbitz and other online companies to search flight options and quickly show fares and schedules. Google, which had a sparse travel presence at the time, scooped it up for $700 million.

Some of Google’s acquisitions over the past decade-and-a-half have triggered federal government reviews, but the company has emerged largely unscathed. Its $2.1 billion purchase of Fitbit, which would give it valuable health data, is under review now.

And over time, its search results page has evolved to include more readily accessible answers — and more of Google’s own products.

“It’s such a gradual process,” said Pete Meyers, an expert on Google Search algorithms who works as a marketing scientist at search engine optimization company Moz. “It’s often subtle in the moment. Six months later, when all of these small changes accumulate, Search can look very different.”

The congressional report specifically called out Google’s tendency to fill out search results with its own content or ads, effectively limiting traffic to the outside while simultaneously allowing it to charge more. The report also said Google gives its own products a boost even when inferior to competitors. Google

Continue reading