Google’s marketplace strength is not by itself a cause for excessive alarm, but the countless allegations that Google has trampled on consumer privacy and engaged in unacceptable—and even illegal—corporate practices are. The number of questions that Mr. Schmidt needs to answer seems to grow each week as a new example of Google’s bad behavior surfaces.
Foremost for consumers, we need to know how much Google knows about us and what does it does with the vast amount of information it mines on a daily basis. Are privacy concerns of consumers valid and what is Google doing to help alleviate these concerns and prevent privacy lapses?
We do know that the company gathers data from searches, right down to individual IP addresses and computers. They can read through Gmail messages and target ads directly to us based on keywords scanned in our emails. They can pinpoint schools, churches, houses, cars and supermarkets using Street View -- and sometimes even capture people, or children, in those various locations.
It gets worse. Last year, Google’s Street View was found to be collecting personal data from private wireless networks -- even tracking and storing your location as you travel, shop, commute and visit friends. The company offered a weak public apology, but it still remains unclear what they collected, how it happened and what they’ve done with your private data. In addition, the company was caught collecting children’s social security information as part of its “Doodle for Google” art contest.
The litany of misdeeds goes on. Google was recently cited for knowingly selling ads to companies that illegally sold drugs online—something Google’s CEO Larry Page knew about. The company had to forfeit $500 million to avoid prosecution and make the case go away. Earlier this year, a federal judge rejected the Google Books settlement and slammed the company for “engaging in wholesale, blatant copying without first obtaining copyright permissions” and said the deal would give them a monopoly on unclaimed work.
What is particularly troubling is what appears to be Google's indifferent response every time they "cross the line." The company's leadership and spokespeople have responded as if each possible violation were a simple one-time error, even though, as in the case of Street View and online drug sales, some "errors" lasted for several years.
These acts are all the more disturbing given that Google is extending its reach into other sectors by buying up companies left and right. New deals are announced seemingly every week. Recently, it was Motorola and Zagat. Next week, who knows?
Numerous experts have concluded that the market has tipped, meaning that Google's dominant position presents a barrier for other rivals wanting to enter the market, compete and innovate.
While government should tread carefully in the marketplace, it makes sense for regulators to use existing law enforcement tools to monitor companies when there has been a pattern of abusive and questionable behavior. Simply put, government has a role in ensuring that dominant firms do not abuse their exceptional market power to exploit consumers and undermine competition.
Let's hope Congress asks Eric Schmidt enough substantive questions to get to the bottom of Google's dubious business activities, their competitive misdeeds and how their dominance affects consumers on an everyday basis.
Steve Pociask is president of the American Consumer Institute Center for Citizen Research, a nonprofit educational and research institute.