The US Consumer Watchdog has filed a complaint with the US Federal Trade Commission demanding Google be largely dismantled, to prevent the company from abusing its monopoly position.
Noting ”Google hardly blinked when it paid half a billion dollars to the United States to settle an illegal drug sales case” and that “the proposed $22.5 million fine for violating the “Buzz” Consent Decree is but pocket change for the Internet giant” the WatchDog proposes the $40 billion per year company needed a much tougher remedy to reign it in.
The Consumer Watchdog proposed the following treatment:
- Google should be required to divest Motorola Mobility, whose standards essential patents it is using unfairly by not making them available for license on a fair basis.
- Google should be broken into different companies devoted to different lines of business so there is no incentive to unfairly use search to promote other services. Search could be separated from advertising. Gmail and the relatively new social networking service, Google +, could be spun off as a separate entity, as could YouTube, a Google acquisition that should have been denied at the time of merger. Enterprise applications could be another separate business.
- Google’s search services should be separated from services where Google provides its own content.
- Google’s search engine’s importance as a gateway to Internet requires a maximum degree of openness and transparency. Google’s monopoly position and importance to the Internet means that the company should be closely regulated like a public utility. Regulations should be designed to open up Google’s ad platform to enable other competitors to compete. Rules should be crafted to create greater transparency in the operation of Google’s ad platform to enable parties to negotiate more effectively. For example: Providing greater visibility into the maximum amount of the highest bid, how many search terms are shown per page, and how Google’s “quality score” is derived and applied. Little, if any, of this information is currently public and openness would contribute to consumer choice and options as well as foster competition.
- Google should be forced to disgorge its monopolistic gains through the imposition of substantial financial penalties. Your change in policy regarding disgorgement over the summer was a welcome step and we urge you to apply it in this case. The payment would have to be significant enough to impact Google’s future behavior.
The letter concludes:
The Federal Trade Commission’s role in keeping Google’s abuses in check is essential. The Internet is too important to allow an unregulated monopolist to dominate it. We call on you to take the steps necessary to prevent it: File a formal antitrust complaint against Google and go to trial in Federal District Court in Washington, DC. If the Commission opts to settle the case the consent agreement must require Google to admit wrongdoing and be strong enough to change Google’s behavior and protect consumers from harm as outlined above in the proposed remedies.
Read the full letter (PDF) here.
It seems Google is rapidly running out of friends, and are under increasing pressure for regulation both in US and abroad. How long before the company is as hamstrung by regulators as Microsoft was for most of the 2000’s?