I’ve written numerous times in the past about the possibility of anti-trust actions being levied at Google, but I’ll be the first to admit that I’ve never taken the time to throw all the various anti-trust arguments together into one cohesive post. Fortunately for you and me, a reader recently alerted me to a post he had written that does a pretty good job of outlining many of the anti-trust issues surrounding Google. If you want to read the full article, you can check out Scott Cleland’s article here. For the record, I don’t know anything about Mr. Cleland’s background (for all I know, he could be a lawyer for Microsoft . . .!), but he’s certainly done a thorough job of research.

Among the most salient points he makes:

  • Google has dominant market-share of the search market;
  • The search market is a huge market with millions of participants;
  • There is little to no external accountability of how Google prices their ad auction market;
  • Google makes decisions about the price an advertiser pays without full disclosure as to how this price was determined;
  • Google is engaged in anti-competitive front running (placing their house ads ahead of the competition, regardless of the actual auction result);

I would add to this the “bundling” of products, such as the “Google Checkout” logo that you see in AdWords when a merchant participates in the Checkout program, as well as the free pricing of many Google products, which could be interpreted as a way to push competitors out of business (i.e. Google Analytics, Google Web Site Optimizer, Google Base).

As to why none of this has apparently bothered federal agencies, Mr. Cleland concludes:

Google appears to have fallen between the cracks of oversight by the FTC, DOJ, SEC and the CFTC — all of which have some responsibility to protect market users and the public from fraud, manipulation, and abusive market practices by dominant providers/market makers, and to foster open, transparent and competitive markets.

For the record, I have talked to lawyers experienced in Internet law who think all of this complaining about anti-trust is totally unfounded. In particular, one friend of mine said (and I paraphrase here): “Google provides an incredible free service to consumers. the DOJ is not going to file an anti-trust suit against them as long as consumers continue to get so much from Google for free. In that respect, there is a huge difference between Google and Microsoft.”

That may be true . . . for now. The question I have is what happens in 2009 if Obama is elected and the eight years of business-friendly regulators at the FTC and the DOJ suddenly become a little less likely to look the other way? It could make things a bit more complicated for Google.

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David Rodnitzky
David Rodnitzky is founder and CEO of 3Q Digital (formerly PPC Associates), a position he has held since the Company's inception in 2008. Prior to 3Q Digital, he held senior marketing roles at several Internet companies, including Rentals.com (2000-2001), FindLaw (2001-2004), Adteractive (2004-2006), and Mercantila (2007-2008). David currently serves on advisory boards for several companies, including Marin Software, MediaBoost, Mediacause, and a stealth travel start-up. David is a regular speaker at major digital marketing conferences and has contributed to numerous influential publications, including Venture Capital Journal, CNN Radio, Newsweek, Advertising Age, and NPR's Marketplace. David has a B.A. with honors from the University of Chicago and a J.D. with honors from the University of Iowa. In his spare time, David enjoys salmon fishing, hiking, spending time with his family, and watching the Iowa Hawkeyes, not necessarily in that order.