Google's Schmidt Gets Eyed by Senate Panel

Google Executive Chairman Eric Schmidt put on a show of confidence on Wednesday before a Senate Judiciary subcommittee, adeptly deflecting questions about whether the Internet giant manipulates search results to favor its own services.

Schmidt told a Senate Judiciary Antitrust Subcommittee hearing that Google’s primary goal is to provide consumers with the best answer to their question.

“If we know the answer, it is better for the consumer to answer the question so they don’t have to click anywhere else,” Schmidt said during his first appearance before Congress since joining Google in 2001.

Such responses, however, did not appear to satisfy some of the senators on the panel, including ranking member Mike Lee, R-Utah, and Sen. Al Franken, D-Minn.

Lee came ready for Schmidt’s response with graphs showing Google's search results from 650 different shopping-related keyword searches, accusing Google of cooking results and diving in for a back-and-forth over whether he was comparing apples and oranges. Lee said the data showed that Google always came up eerily third in shopping searches.

"Either way, you've cooked it so you're always third," Lee said. Schmidt's expression did not change as he said Lee was comparing a Google product search to price searches by the other sites. "Senator, I can assure you we haven't cooked anything," he said.

Lee remained unconvinced, telling Schmidt later, “Some of my fears have been confirmed as a result of our conversation. I am troubled by some of your practices.”

And that was just the show inside the hearing room. Outside, mimes dressed in white track suits stalked passersby while "Google" brand ice cream was served up outside the Capitol in a show by critics of the Internet search giant.

Subcommittee Chairman Herb Kohl, D-Wis., attacked Schmidt with quotes from Google's Marissa Mayer in 2007 when she said that Google put its links first for such products as Google Finance because of the work the firm has done to provide such rankings. "You recognize, of course, if that’s company policy that’s very contrary to what you are putting to us here today," Kohl said.

Schmidt said he sticks by his testimony, and gave the example of a stock quote. "If you want a stock quote, we’ll just give you a stock quote," he said. "I disagree with the characterization that somehow we were discriminating against the others."

When asked by reporters after leaving the hearing if Google’s algorithms favor its own products and services, Schmidt responded, “I disagree with that characterization. What I said over and over again was we’re trying to get to the right answer. And the right answer is sometimes a set of links and sometimes for some sets of queries is an algorithmic result, which we calculate.”

The Federal Trade Commission has launched an antitrust probe of the company, and Schmidt voiced confidence the inquiry “will reveal an enthusiastic company filled with people who believe we have only just scratched the surface of what’s possible.”

Noting that Google controls up to 70 percent of the online search market and 95 percent of mobile search, Kohl asked Schmidt directly if he agrees that Google does have monopoly power. “We’re in that area,” Schmidt said, adding that he understands it has special responsibilities given that role.

He also acknowledged the similarities between the questions being posed about Google’s dominance of the search market and the antitrust case filed against Microsoft more than a decade ago, saying Google has learned from that experience.

“We get it,” he said. “By that I mean that we get the lessons of our corporate predecessors. We also get that it's natural for you to have questions about our business.”

Google critics told the subcommittee why they believe Google doesn’t play fair. They maintain that when a user searches for something on Google, it often displays links to its own products and services at the top, pushing links to other services and products further down on a search page and making it harder for consumers to find them.

“Google says that competition is just one click away, but that is like saying, move to Panama if you don’t like the tax rate in America. It’s a fake choice because no one has Google’s scope or capabilities and consumers won’t, don’t, and in fact can’t jump,” Nextag CEO Jeffrey Katz said in his written remarks.

Lee and other lawmakers noted a preference for voluntary steps Google could take to ensure it is competing fairly instead of regulatory action. Expedia counsel Thomas Barnett, a former Justice Department antitrust official, suggested that Google do a better job of labeling links to its own products. Katz said he would like to see the company take steps to ensure a “level playing field,” but didn’t detail what those should include.

Kohl indicated that the committee would continue to examine the issue, saying “we need to continue to consider whether [Google] does its best to serve consumers or if it biases its search results in its favor.”