Blog Post

Is It Legal For Google To Shut Competitors Out Of Social Search?

Twitter and some pundits are crying foul over Google’s decision to exclude certain competitors from its new search and social networking hybrid. But what law says the company has to help its competitors in the first place?

Google’s decision to exclude Facebook and Twitter from some search results is a big deal because it’s a direct acknowledgement that the famous algorithms are not always objective. And it shows that, when it comes to grabbing a slice of social network ad dollars, the company is willing to risk regulatory blow-back.

This still doesn’t mean Google (NSDQ: GOOG) did anything wrong.

Background Context

Google yesterday announced a new feature called ‘Search plus Your World‘ that offers signed-in users a customized set of search results that contain personal photos and friends’ activities. But soon after a honcho at Twitter, aware that its results were excluded, tweeted “bad day for the Internet” and warned of “search being warped.” Google responded by suggesting that Twitter was to blame for the omissions by breaking off a long-running data deal between the companies.

Influential search engine journalist Danny Sullivan has since interviewed Google chairman Eric Schmidt, and this morning penned a persuasive piece that shows Google is not being entirely truthful about the affair. The bottom line is that, even if Twitter and Facebook are shutting off parts of their data stream, Google still has access to mountains of data from the public internet — data it chose to exclude from its personalized search results.

What this means is that a customized Google search will scrub out results that a user would ordinarily see under a regular search.

This is a big deal because Google has long maintained that it doesn’t tamper with its search results. Although Google has not technically broken its rule (its normal results are still objective,) it’s a slippery slope.

After admitting that it put a thumb on the scale in this case, Google will have to turn around and say it didn’t do so on other occasions. ‘Search plus Your World’ has already set off rumors about a new FTC investigation. And the controversy will no doubt give fresh ammunition to those like Rick Santorum, the Republican presidential candidate whose top Google result is a filthy sex term.

Do Rigged Results Violate the Law?

Blogger MG Siegler was quick to point out yesterday that Google’s gambit will amplify anti-trust accusations against it.

Recall that, in recent years, small companies have accused Google of unfairly booting them to the equivalent of search Siberia. They claim Google lowered them in the search rankings in order to clear the way for its own push into new fields like online shopping and travel. The conspiracy-minded companies (most of which have ties to Microsoft) have so far struck out in court, however, and produced no convincing evidence that Google plotted against them.

The case is different this time, though, because Google is clearly discriminating against Facebook and Twitter. It will have to argue that its actions are legal all the same under antitrust or free speech laws.

I asked a Google spokesman, Adam Kovacevich, if Google has a First Amendment right in its search results. He referred me to recent remarks by Schmidt before the US Senate:

…Google’s formulation of search results is a type of “scientific opinion”-a prediction of what the user might be looking for. Those results have been deemed by several courts to be a protected form of free speech under the First Amendment.18 Just as a government panel could not dictate to the *New York Times*, the Drudge Report, or the Huffington Post what stories they could publish on their websites without infringing their freedom of speech, so too would government-mandated results likely violate Google’s freedom of speech.

Google’s free speech theory is based on a lower court ruling in 2003 that found the company’s results were indeed just an opinion, but that reasoning has yet to tested further. It’s also unclear if the First Amendment would be a shield if Google did in fact engage in anti-competitive behavior.

But in any case, Kovacevich made clear that Google believes it isn’t breaking anti-trust law in the first place. He repeated the company’s oft-made argument that competition is just a click away.

Anti-trust investigations turn on two questions: whether a company has a dominant market share and, if so, whether it is abusing that dominant position. With a near 70 percent market share in search, Google will have a hard time arguing it’s not dominant. This means it can attempt to define the market in question not as search but as social networks where Facebook is dominant and Google clearly is not. Or else it can argue that excluding big competitors from its product is not abusive behavior.

Mark Lemley, a leading patent and anti-trust expert at Stanford, told the New York Times (NYSE: NYT) that Google’s behavior is not abusive:

“It can’t be the rule that if Facebook says no, you can’t search our links, that Google can’t search its own links. That is not antitrust.”

Lemley has worked for Google in the past but on unrelated matters.

The upshot is that, in the case of social search, Google has abandoned its strongest defense to antitrust claims — that its results are objective — in order to rely on other arguments. Is it worth the risk?

The Business Case

Perhaps it’s no coincidence that Google unfurled “Search plus Your World” the same week as another big event for social networks.

Today, the first “sponsored stories” appeared in the news feeds of Facebook users. These “stories” are in fact ads based on products that a user or their friends have “Liked’ in the past.

They also represent a gold mine that Google desperately wants a piece of. This appears to be why the company made the profound strategic shift to begin offering an altered set of results for its social search product. Only time will tell whether this will pay off with a shiny new revenue stream or if will it instead leave Google with a thinly-populated social network and a big regulatory headache.

My own take is that the biggest problem with Google’s initiative — and those of other tech behemoths like Facebook and Twitter — is not anti-trust but anti-transparency. People (and regulators) might feel much more comfortable with these companies if they bore a big sign in plain English that explained why they control the information the way they do.

Google might have had a smaller headache on its hand if the company had announced, “we are excluding Facebook and Twitter from the results because we want to build up our own social network — the rest of our search results are the same.” Instead, Google may have fueled another wave of paranoia and regulatory attention.

9 Responses to “Is It Legal For Google To Shut Competitors Out Of Social Search?”

  1. Jeff Roberts

    Thanks for the comment, Michele. I’m no authority on Panda and SEO issues so will leave that to you and others to debate while I learn more.

    I do stand by my ‘Siberia’ comment though because I’ve read the lawsuits closely and the legal theories in MyTriggers, SearchComet, ShopCity, etc are pretty thin. I just don’t think Google feared these low-quality sites as competitors and decided to rig their results in response. These cases are also suspicious because the businesses in questions have ties to a gold-plated law firm that works for Microsoft.

    Keep in mind too that these antitrust lawsuits may also have an ulterior motive of reaching the discovery stage in order to get access to some of Google’s confidential documents.

    For now I don’t think that Google is gaming its results on a widespread basis. But I do think it’s playing with fire by entering other verticals.

    • No doubt that Microsoft is after them just as Google is and was after them. Long memories….

      My point was not to say that no one has a valid point about Google’s capricious penalties that somehow coincide with their financial interests.

      What’s best I guess is up for debate: a list of credit card, shoe, jeans, loan…companies or a comparison service that Google now calls thin but stuffs their theirs on top each time a user searches. That comparision service can’t be that bad, or Google wouldn’t pot it on top of each page right? Best for the users philosophy and all :). What would *you* like on top when you search for insurance? Or loans?

      It’s easy to say but the page is (all of the sudden) thin, too dark or too green when you have a competing service and each click puts money in your pocket. Google is gaming results broadly, by making it extremely rewarding to be an advertiser (brand) and of course they control close to 50% of ad market and the other 50% is fractured in a million pieces.

      Unless we’re talking about the surgical moves in specific niches that Google has entered. Trust them them to be impartial?

      What do you think will happen to your traffic with Google+? If I search for “Google facebook social search” I might have gotten this story on top or near the top because it covers it pretty well, from a reputable source and so on. Now, or soon we will get Google+ pages that have snippets–maybe your snippet–or casually mention it on top, mark my words. You lose traffic to Google, and that is their goal, since ads will be added there very soon. Not everyone will click on them but given the images, logos and other bells in the listings, more than enough people will click on the top links, even if they are not as relevant.

  2. “Recall that, in recent years, small companies have accused Google of
    unfairly booting them to the equivalent of search Siberia. They claim
    Google lowered them in the search rankings in order to clear the way for
    its own push into new fields like online shopping and travel. The
    conspiracy-minded companies (most of which have ties to Microsoft)….however, and produced no convincing evidence that Google plotted against them.”

    Jeff you are being careless  here. Google has been accused by small mom and pops and small honest business owners for being booted to Siberia so BRANDS (guess who spends most at Adwords?) can take the top spots. Panda was about shallow content right? Yeah, ok. Check Google’s earnings and see that clicks on ads grew tremendously. Moral of the story: don’t lump all of them together. 

    And it’s true that Google has banished travel, credit card comparison, financial comparison, local listings and others for supposedly having thin content that “users don’t like”. It’s not thin when Google puts their own stuff on top of search pages though.

  3. Reading comprehension.   The writer is talking about the new Google+ search that gathers personalized info from off a user’s Google+ account and stream to supposedly cherrypick items of interest to the user.   I don’t think that is a very good idea, but it based on things like Pandora and Itunes Genius, which suggest music you might like.  This is all based on the idea that you want the same old stuff and are not interested in finding out about new things. I think any Google user with normal search skill knows how to limit their own search results so it meets their immediate needs.  I guess the trick to avoiding skewed search is to be sure you have not checked any “keep me logged in” box.

    Could we all just pay $1 per year to Google or facebook and be done with all this commercialization?  Could internet services be considered utilities like gas and electric and we can simply be billed rather than having the integrity of the service compromised by annoying attempts to make money?  Suppose if every time you went to plug something in an outlet, a commercial played?   At this point, internet services such as Google search are as vital as electricity.    

  4. Jeff Roberts

    Please read my piece carefully. As Jamie notes, Twitter and Facebook results turn up in Google’s regular search results. The point here is that Google could include these pages in its social search results but is choosing not to.

    In the bigger picture, I find Google’s practices no worse (and often better) than its competitors. And I admire the company for its overall transparency and its unwillingness to stoop to the dirty tricks practiced by others.

  5. contentnext

    Actually, it’s not true that Google doesn’t and can’t parse Twitter and Facebook front end pages.  And they do all of the time.  I see Twitter especially in the actual search results.  There’s definitely some disingenuousness going on on both sides here.

  6. Wow, how did this get written? Google hasn’t shut anyone out. Twitter and Facebook have decided to wall off their user data, so Google uses FriendFeed, Quora, LiveJournal, WordPress, etc. If Twitter and Facebook allow Google to index their data, I’m sure Google would love to.