Google Keyword: Antitrust

A deep look into Google, Inc.’s pending $3.1 billion acquisition of online ad company DoubleClick, Inc. went even deeper this week, as the European Commission extended its inquiry into the deal until November 13. But even if the deal goes through, many are predicting that Google's dominance of the online search business could make Google the next big antitrust target.

Becoming a target of antitrust regulators can make life miserable for board members. Larger acquisitions move off the table and every deal gets second guessed on its ability to clear regulatory hurdles. Long-term strategy can be difficult to set when boards are forced to be careful leveraging strength in one market to enter another. And worst of all, boards are sometimes forced to rein in their all-out competitive instincts to dominate the competition.

"Google is huge, and a company with a dominant share of a market sometimes will use its monopoly power to exclude new competition or leverage itself into another market. Microsoft was convicted of doing both of these, but I have not seen evidence of anything like this by Google." --Robert Lande, University of Baltimore

To say that Google leads the search engine business is like saying that Tiger Woods is good at golf. And its dominance only continues to increase. According to research site comScore.com, which released a ranking of U.S. search engines in August, Google’s share of the internet search market rose to 56.5 percent from the 55.2 percent the previous month. Yahoo! came in second holding only 23.3 percent, while Microsoft, in third, dropped from 12.3 to 11.3 percent.

Of all companies, Microsoft, among others, has voiced criticism towards Google, and its potential abuse of monopoly power by causing friction in competition of the market. Being accused of being a monopoly is something that Microsoft knows a thing or two about, of course. More than that, Microsoft experienced firsthand, how it can limit a good competitor.  For over a decade it’s been fighting, and losing, an antitrust battle over allegations of abusing its monopoly in the operating system market to dominate web browser sales and other businesses.

It could be that Google's size does not square with the open and non-corporate spirit that was prevalent during the beginnings of the growth of the Internet. Many say that it doesn't deserve the antitrust scrutiny. “So far, I have not seen the kind of exclusionary conduct by Google that I have seen by Microsoft,” says Robert Lande, an antitrust law professor at the University of Baltimore. “Microsoft made it virtually impossible for any firm to compete with its browser. I have not seen Google do anything approaching this. Google is huge, and a company with a dominant share of a market sometimes will use its monopoly power to exclude new competition or leverage itself into another market. Microsoft was convicted of doing both of these, but I have not seen evidence of anything like this by Google.”

The EU’s extension will allow more time for Google to prove that it would not abuse its power. (Google, though, defended the acquisition last month at a Senate hearing in the United States, where the deal is also being looked at by the Federal Trade Commission, which experts say it has a better chance of granting approval.) But for global companies like Google and Microsoft, getting targeted by the EU, though, which has a tradition of being stricter on antitrust matters, is not much different than being hit by the U.S. government on antitrust. The process itself can be damaging, as companies are forced to reveal sensitive intellectual property to make their case. The threat of antitrust actions could make Google hesitate at every merger possibility or cause it to be conservative when using search to promote other businesses.