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Tuesday, December 20, 2011

More from the Senate on Google: Lee and Kohl Request FTC Inquiry

The American economy rests on the ability of small businesses to innovate, invest and create jobs. In fact, small businesses created 65 percent of all new jobs in the country between 1993 and 2009. During periods of economic recovery following recessions and downturns, the U.S. counts on small businesses to generate nearly all the net new jobs. For that reason, it's critical to ensure that small businesses have the ability to reach their customers on the Internet. It is also important that their IP and innovations are protected. U.S. Senate hearings in September revealed a disturbing pattern in Google’s business practices. To that end, Senators Mike Lee (R-Utah) and Herb Kohl (D-Wisconsin) are asking the Federal Trade Commission (FTC) to further investigate Google and their dominant market position to determine if they have unfairly leveraged their power against smaller businesses.

(To read the letter, please visit:

While SBE Council does not favor undue government regulation or excessive government intervention in the private marketplace, safeguards currently exist to ensure companies are not abusing the rules of a competitive marketplace. These are our nation’s antitrust laws – sometimes abused by those entrusted with enforcing them, and sometimes used correctly to address abusive marketplace practices.

Senators Lee and Kohl have pointed out inconsistencies in the testimony of Google Chairman Eric Schmidt when he came to testify in September followed by his written answers in response to further inquiry. Small businesses were represented at the hearing in September and testified first-hand about certain practices of Google where they used their dominant market positions to drive customers to their own sites causing harm to these businesses. Certainly, these allegations are not frivolous and affect the very livelihood of many consumers and entrepreneurs.

Perhaps further investigation into the business practices of Google by the FTC will clarify the inconsistencies that concerned Senators Lee and Kohl. In a Red State blog piece, Saul Anuzis notes his support of the FTC review because “antitrust enforcement strikes right at the heart of what defines a company: its property.”

Anuzi explains: “…Google has also built and maintained search on illegally copied content -- and it continues to demonstrate a reluctance to address this issue. At September’s Senate Antitrust Subcommittee hearing, Yelp CEO Jeremy Stoppelman detailed how Google had scraped (or in layman’s terms, “stolen”) Yelp’s content -- reviews of local businesses -- and put it on Google Places. Former Assistant U.S. Attorney General Thomas Barnett told a similar story about Trip Advisor content.”

Anuzi goes on to cite other examples, and concludes: “The common denominator of these concerns is not just unfair competition -- but unfair competition powered by property theft.”

Google welcomed the opportunity to answer questions at the Senate hearing in September. They may also have the opportunity clear up any confusion through an FTC inquiry, which would certainly help small businesses impacted by their actions better understand their business practices.

Karen Kerrigan, President & CEO

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