Intellectual Property Law

Google is Now Officially a Big Bad Company in DC

By Cynthia Brumfield

Contrary to what most people think, no one is more vulnerable in Washington politics than "big" companies, particularly companies that that have extensive dealings with the voting public and have roused the fear and envy of competitors by cornering a particularly profitable slice of the market. Starting with the trustbusting of Teddy Roosevelt, U.S. history is replete with government punishment of a slew of companies that grew big and bad, particularly in the technology and telecommunications arena -- think IBM, AT&T, the cable industry and Microsoft.

Google, the phenomenal search engine giant whose famous motto is "do no evil," is increasingly following in the footsteps of these predecessors, with politicians earning publicity points by turning up the heat on Google and corporate enemies feeling free to privately and publicly attack the company. The big news today is the Senate and House Judiciary Committees' hearings on Google's advertising tie-up with ailing rival Yahoo, a deal that raises antitrust (and tangentially privacy) issues and promises to thwart Microsoft's own faltering bid for Yahoo.

Google, of course, defends the deal as good for consumers while Microsoft says it will give Google "an unprecedented level of control over advertising for search on the Internet." All of this -- the hearings, the statements, the posturing -- is just political theater, albeit a show that everybody is watching (the always-fun Kara Swisher even hopped aboard the Acela express to be at the hearings in person.)

What's really interesting now is what the Justice Department does. The DOJ opened an investigation into the Google-Yahoo deal, something that it usually does only in the event of an actual merger. The DOJ under Bush hasn't exactly been an antitrust activist agency, so this probe underscores just how deep into "big" company waters Google has waded.

Even more interesting still is how Google's political enemies will take advantage of the giant's vulnerabilities. You can bet that privacy advocates, phone and cable companies (which have coped with a Google-led net neutrality push even as they collaborate with the search giant in the marketplace), Hollywood, Apple and other Google rivals are privately striking while the iron is hot, dropping bugs into all the right ears about Google's wrongdoings.

My guess is that like IBM, AT&T, the cable industry and Microsoft, Google is in for a very rough ride over a very long time period. That's the price of phenomenal successs -- officially becoming a big bad company in Washington, DC.

Full post as published by IP Democracy on July 15, 2008 (boomark / email).