Consumer Watchdog Calls On Texas AG To Press Antitrust Case Against Google

SANTA MONICA, Calif., Feb. 13, 2014 /PRNewswire-USNewswire/ -- Consumer Watchdog today urged Texas Attorney General Greg Abbott to press forward with an antitrust case against Google for unfairly manipulating search results favoring its own services damaging both competitors and consumers.

"Google's abuse of its monopolistic position is hurting competitors, limiting consumer choice and increasing prices for consumers," wrote John M. Simpson, Consumer Watchdog Privacy Project director. "Federal regulators failed to act in a meaningful way and the European settlement, if finally approved, does nothing for the United States.  It is incumbent upon the state attorneys general under your leadership to act decisively to protect consumers."

Consumer Watchdog said that an antitrust investigation by several states led by Attorney General Abbott had been more or less on hold while the European Commission investigated Google. The EU's Competition Commissioner, Vice President Joaquin Almunia, recently announced that he had reached a settlement with Google, though all 28 members of the College of Commissioners must still approve it.

"While consumer groups on both sides of the Atlantic – BEUC and Consumer Watchdog – have said Google's third settlement proposal as described by Vice President Almunia does not adequately remedy Google's abuses, there is cause for even greater concern in the United States. Google's commitments in Europe – as inadequate as they are – would not apply at all in the United States," wrote Simpson. "But as bad as the settlement is, if consummated it would only apply to Google's European domains such as Google.ie, Google.uk.co, Google.fr, Google.de, etc. It would not apply to Google.com. There will be no benefit to consumers in the United States from the European antitrust action."

Read Consumer Watchdog's letter here: http://www.consumerwatchdog.org/resources/ltrabbott021314.pdf

The letter to Attorney General Abbott continued:

"Ultimately the solution must be based on the non-discrimination principle. Because Google is the gateway to the Internet for so many people, it has an obligation to honor the concept of search neutrality. Google must hold all services – especially its own – to exactly the same standards, using the same web crawling, indexing, ranking, display and penalty algorithms.   A demand for this even-handed treatment of all services including Google's in the display of search results has a precedent in the regulation of Computerized Reservation Systems, which were prevented from favoring the parent air carrier on the system.

"The heart of the problem is that Google has developed a substantial conflict of interest.  It no longer has an incentive to steer users to other sites, but rather to its own services.  It is becoming even more effective at this and has a greater incentive to engage in manipulation now that it is merging data collected across all its services. The only way to deal with this conflict is to remove it.  There needs to be a separation of Google's different services and assets.  At a minimum any remedy must insist that Google use an objective, nondiscriminatory mechanism to rank and display all search results – including links to Google products.

"Consumer welfare is the ultimate test of any antitrust settlement.  In November a Consumer Watchdog study found that Google is taking advantage of its monopoly position in search to charge merchants more for placement in Google Shopping, causing higher prices for consumers. Google used classic monopolistic tactics to largely clear the field of competitors and then changed its business model to maximize its profits by charging merchants for placement. Merchants then charge consumers more for the product to cover their payment to Google."

Read a copy of the Consumer Watchdog's study, Consumers Charged More As Result Of Google's Search Monopoly, here: http://www.consumerwatchdog.org/resources/googlereport112513.pdf

A June 2010 Consumer Watchdog, study, Traffic Report: How Google Is Squeezing Out Competitors and Muscling Into New Markets, documents how Google began emphasizing its own services in search results when it launched Universal Search.

Read a copy of that study here: http://www.consumerwatchdog.org/resources/TrafficStudy-Google.pdf

Visit Consumer Watchdog's website at www.consumerwatchdog.org

SOURCE Consumer Watchdog