WASHINGTON — In Google’s most public antitrust hearing to date, Eric E. Schmidt, the company’s chairman, is expected to testify before a Senate panel Wednesday about how Google produces its search results, and whether it favors its own businesses, thwarts competition and hurts consumers. The hearing, which begins at 2 p.m., is one of several ongoing inquiries into Google’s behavior, including a broad-reaching investigation by the Federal Trade Commission.
Antitrust scrutiny has intensified since Google has expanded into new businesses, like comparison shopping, local business reviews and travel search, where it competes with the same Web sites it indexes in its search engine.
After Mr. Schmidt testifies, three Google rivals will speak. They are Jeffrey G. Katz, chief executive of Nextag, a comparison shopping site; Jeremy Stoppelman, chief executive of Yelp, a site where users review local businesses; and Thomas O. Barnett, a lawyer for Expedia, the travel site. Susan A. Creighton, a lawyer representing Google, is also expected to testify.
Wednesday’s hearing, held by the Judiciary subcommittee on antitrust, competition policy and consumer rights, was not intended as a step in building a case, but to raise policy questions and explore the arguments on both sides of the antitrust debate about Google, said Senator Herb Kohl, Democrat of Wisconsin and chairman of the panel.
“Google has enormous influence on consumers and businesses in America — how they find information on the Internet, what they see and the commercial choices they are presented,” Mr. Kohl said in an interview before the hearing.
Google’s dominance of search and search advertising is not an antitrust issue, he said, but there is cause for concern if Google is abusing its market power.
“Does it bias its search results in favor of its own business offerings and services?” he said. “That’s the crux of what we’re looking at.”
In written testimony to the Senate panel, Mr. Schmidt described the search giant as a company facing fierce competition on many fronts and as a relentless innovator in a dynamic industry. He emphasized the open Internet, where consumers can easily switch to competing services.
Mr. Schmidt made the case that Google has been making for months as its business practices have come under increasing scrutiny from antitrust regulators in the United States, Europe and South Korea. But he presented the company’s defense of its actions and motivations in a document that is pointed and succinct, yet comprehensive.
Google’s success, Mr. Schmidt wrote, is a byproduct of its corporate ethos of putting consumer interests first.
“Keeping up requires constant investment and innovation,” he wrote, “and if Google fails in this effort users can and will switch. The cost of going elsewhere is zero, and users can and do use other sources to find the information they want.”
Google has generated $64 billion in economic activity for small businesses, he wrote. Google has said that comes from enabling online sales for businesses, sharing ad revenue with Web site publishers and grants to nonprofits.
He said the F.T.C. investigation, with which Google is cooperating, is largely the result of complaints by disgruntled competitors.
In his oral testimony, which will likely differ somewhat from the written version, Mr. Schmidt was expected to talk about his personal history in Silicon Valley and how it has shaped his point of view on these issues, and to emphasize the ways in which technology companies cooperate and compete at the same time.
Google’s rivals are expected to make the case that it has abused its dominance in search.
“Unfortunately for consumers, there are strong indications that Google is, in fact, foreclosing competition rather than simply competing on the merits of its own products,” Mr. Barnett, who is a former head of the Justice Department’s antitrust division, wrote in his prepared testimony.
Google’s products, like Google Maps, have often beaten out incumbents like Mapquest, he said, and Google has the incentive to steer Internet users to its own pages because it can then earn additional advertising revenue. While Google identifies ads, it does not identify links to its own products. Its practices are even more worrisome on mobile phones, Mr. Barnett said, where it almost completely dominates search.
Mr. Stoppelman has said that Google lists its own local review product, Google Places, above Yelp results, and until recently used Yelp’s reviews in Places without its permission.
The Senate hearing will have no direct consequences for the investigations under way in the United States and Europe. But the testimony could influence policy makers and the public by articulating the potential threat to consumer welfare, competition and innovation if a corporate giant overreaches.
In 1998, for example, soon after Bill Gates of Microsoft was challenged by senators and competitors at hearing, the federal government and 20 states filed an antitrust suit against Microsoft.
As antitrust scrutiny has intensified, Google has ramped up its lobbying efforts in Washington and its communications campaigns nationwide. The company has shown television ads in some markets, including in Wisconsin, Mr. Kohl’s home state, that trumpet Google’s role in helping small businesses and creating jobs.
latimes
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