More than a dozen members of Congress and industry experts waded through the complexities of intellectual property, patents, and "the answer" during a hearing entitled "Competition in the Evolving Digital Marketplace" held by the House subcommittee on courts and competition policy Thursday.
The hearing was first of several planned on how to apply antitrust law to the practices of digital media giants such as Google and Apple.
FTC Bureau of Competition Director Richard Feinstein stressed that he didn't have all the answers. The commission has turned its eye toward Google's business deals lately, approving its recent $750 million purchase of AdMob but pressuring it to create a formal privacy policy for its Google Books service. Google also agreed to pay about $125 million to settle a copyright infringement lawsuit relating to the digital book project.
"There's no court case precedent ... We've never seen anyone go from zero to 60, horizontal to vertical monopoly," he said.
Google was singled out for allegedly holding horizontal and vertical monopolies in several markets, including search, video, books, travel, advertising and soon TV — making it a serious antitrust threat, said steadfast critic and witness Scott Cleland of Precursor. Precursor is a business consultant firm to Fortune 500 companies. Cleland also contributes to the Precursor blog, which follows issues such as net neutrality and FTC action.
"Googleopoly threatens economic growth, jobs, privacy ... only Google has a billion user audience," he said during testimony.
In response, Ed Black of the Computer & Communications Industry Association said that Google got lucky, going from a scrappy startup to a market leader. They could just as easily lose that position as Excite, Lycos and Alta Vista did before, he said. Google is a member of the CCIA.
Despite the wishes of committee chairman and Rep. Hank Johnson (D-Ga.) that the hearing not become "a forum for Google bashing," the company's tremendous reach in several industries made its repeated discussion unavoidable.
"If Google came up with a cure for cancer, I'm sure Scott would find a reason why that's bad for society," Black said after a particularly passionate response by Cleland.
Johnson said the committee will schedule a series of hearings before taking a position.
"I don't want business to fear our actions today. The role of government should be to foster competition and drive growth," he said.
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