Google's Head Honcho Gets Grilled
Wednesday, September 21, 2011 at 4:59PMEric Schmidt, Executive Chairman of Google Inc., was seemingly unable to assure some lawmakers during a hearing this afternoon regarding the method by which search results are displayed and ranked by the search engine giant.
Schmidt appeared before the Senate Judiciary Committee Antitrust, Competition Policy and Consumer Rights Subcommittee to emphasize that his company fairly encourages online competition.
“We get the lessons of our corporate predecessors,” Schmidt told Senators as he tried explaining that Google is different than previous companies that exerted monopolies over the internet, such as Microsoft in 2001.
Schmidt listed five different principles of Google Inc. that ensure they fairly compete with other internet businesses:
1. Always put consumers first. There is a ranking system so not every business can be on top.
2. Focus on loyalty. Users can easily switch to other search engines.
3. Open technology. Google Inc. releases and actively supports code that helps spur internet growth.
4. Be transparent. Google Inc. shares information about how its search engine works and provides advertisers with detailed information about their performance and return on investment
5. The only constant is change. Internet is always changing and there will always be different competitors.
Schmidt said that Google is helping the economy by continuing to hire employees, investing in local services, and helping small businesses by giving them exposure they wouldn’t otherwise have.
“Not all companies are cut from the same cloth and one company’s past is not necessarily another’s future,” Schmidt remarked. “We live in a different world today and the open internet is the ultimate level playing field.”
Some members of the committee, however, were not convinced.
While revealing a chart that depicted Google’s sites search results, Senator Mike Lee (R-Utah) accused Google of “cooking” an algorithm that placed Google-owned sites higher than competitors in search results.
According to Lee’s chart, Google’s shopping results consistently ranked third while other competitor shopping sites varied.
“It seems to me that this is an uncanny statistical coincidence,” Lee charged. “You’re third almost every time. How do you explain that?”
Schmidt responded that Google searches for the product not for product comparisons like other sites, which can explain the “strange” results.
“It’s an apple to oranges comparison,” Schmidt explained. “I can assure you we have not cooked anything.”
But members of the committee were not assured.
“That seemed like a pretty fuzzy answer to me coming from the chairman. If you don’t know, who does?” Senator Al Franken (D-Minn.) inquired.
“That really bothers me, because that’s the crux of this,” Franken continued. “And you don’t know. So we’re trying to have a hearing here about whether you favor your own stuff, and you’re asked that question, and you admittedly don’t know the answer.”
To see photos from today’s hearing click here
House Takes On Online Piracy
By Andrea Salazar
Silicon Valley tech giants butted heads with Congress Wednesday as the House Judiciary Committee held a hearing on a bill designed to curb online copyright infringement.
The Stop Online Piracy Act (SOPA) would give the government tools to protect the works of American authors, artists and filmmakers from so called “rogue” websites that steal intellectual property. Under SOPA, the federal government would be able to seek injunction against foreign websites that use pirated or counterfeit products from the U.S.
Proponents of the bipartisan measure, including the Register of Copyrights at the Library of Congress Maria Pallante, argue that there is a need for SOPA because search engines do not remove infringing websites from their search results.
“If we do nothing, the film industry and those young directors who are starting out aren’t going to be able to do their craft,” Rep. Ted Deutch (D-Fla.) said. “We’re not going to have the next Adele, the next Drake because they’re not going to be compensated for their work.”
Senior Executive Vice President of Global Policy and External Affairs at the Motion Picture Association of America Michael O’Leary, along with representatives from MasterCard and Pfizer, testified in support of the bill, arguing that it would protect many jobs across the country.
“Hard work, innovation and creativity are not solely the province of people who live in Northern California,” O’Leary said. “There are people all over this country who contribute to the economy every day, who contribute to our culture…and their jobs are just as important and just as worth protecting as everyone else’s.”
However, opponents of the bill, including Google, Facebook and Twitter, are calling it an Internet killer because under the new bill, websites could too easily be shut down for the actions of one user.
“SOPA wold undermine the legal, commercial and cultural architecture that has propelled the extraordinary growth of Internet commerce over the past decade,” said Katherine Oyama, copyright counsel for Google.
Google’s current policy toward pirate sites is not to removed sites such as Pirate Bay from its search results. Instead, in compliance with the Digital Millennium Copyright Act, it takes down specific page links when rights holders notify the search engine of infringement.
Acknowledging the problem of online piracy, Google said it has concerns with the unclear language of SOPA, not the goal of curbing copyright infringement.
“The bill sweeps in innocent websites that have violated no law and imposes harsh and arbitrary sanctions without due process,” Oyama said, adding that it could threaten new entrepreneurship.
Instead, Oyama suggested that the solutions to online piracy are cutting revenue to those sites and making legal sites, like iTunes and Netflix, more available to the public.
“As long as a rogue site exists, people are still going to talk about it,” Oyama said. “They’re still going to blog about. They’re still going to post about it.”