Ed Vaizey hears MP's concerns over Google monopoly

An MP has warned against the dominance of Google as it continues to carve out a near-monopoly over many aspects of the internet, raising concerns for UK businesses.

Graham Jones, Labour MP for Hyndburn, highlighted the dangers of the search engine’s market-power to DCMS Minister Ed Vaizey in a Westiminster Hall debate yesterday, claiming that unless Google’s competitive advantage is contained there is a risk of a homogenised world of “Google-everything”.

Vaizey, whose portfolio of ministerial responsibilities was recently transferred from BIS to DCMS, showed no signs of a lack of business focus by claiming that any restrictions would be unjust, and that users are free to search on sites other than the American behemoth.

Jones cited the case of search engine Reach Global in his constituency that is being blocked in the market by Google’s dominance. 

Jones highlighted that the firm, and its subsidiary Netmovers, are “cutting-edge” British companies that employ British workers and pay tax to the UK government, though are being “squeezed out by unfair and anti-competitive practices by Google”.

“There is growing evidence that Google is leveraging its dominance in the search engine market into adjacent markets, much as Microsoft did when it leveraged its dominance in the operating systems market into adjacent markets, such as the web browser market,” he said.

According to Ofcom figures, 87percent of internet search engine users chose Google in May 2010, meaning that 32.4 million out of 35 million UK searches went to the US firm, up five percent on the previous year.

Furthermore, by January 2011, Google’s market share had risen to 91 percent of the UK search market, resulting in further domination of online advertising revenue.  Bing has 3.87 percent market share, Yahoo! 2.85 percent, Ask 1.26 percent and the remainder of the providers, including UK companies, have just 1.34 percent of market share between them, which about as close to a monopoly as Google is likely to get.

Indeed earlier this month Google announced that it had made £2.2 billion in the UK market altogether, accounting for roughly 50 percent of the total UK online advertising revenue.

“In my view, Google has gone from being a competitor to a predator and from a horizontal organic search client to a monopoly giant, with subliminal and unclear sponsored searches that favour other Google products,” continued Jones.

“It is important that we create the right market conditions to facilitate innovation in the online economy. Competition must be allowed to flourish, which I believe would create the right conditions and defend the interests of British companies, particularly high-tech IT companies.”

Surely, with the business-friendly start-up policy Cameron and Co. want to bring to the UK with the development of the East London Tech City, it’s something to think about. Of course the Coalition has incredibly close ties to Google reaching as far as family.

Of course it is not just the search market that Google has strong armed its way into, with Google Maps carving chunks out of Multimap and Streetmap’s  market share, the UK’s two leading online map services.

Jones claimed that Google is hellbent on total world domination:

“Without search neutrality rules to constrain Google’s competitive advantage, we may be heading toward a bleakly uniform world of Google everything; Google Travel, Google Finance, Google Insurance, Google Property, Google Telecoms and, of course, Google Books.”

“Some will argue that Google is so innovative that we need not worry, but Google Maps, Google Earth, Google Groups, Google Docs, Google Analytics, Android and other Google products are all based on technology Google has acquired rather than invented,” said Jones, repeating the word ‘Google’ so many time that it began to lose any meaning it may previously have had.

Jones also pointed that, as well as British businesses losing out on revenue, the UK economy is being hit, pointing out that “the Treasury is losing out”.  He claimed that by locating its companies outside the UK, the firm has avoided £450 million of tax.

In response Ed Vaizey accepted concerns over the future of high tech firms in the UK, but said that customers of the search engine were free to use any other site, but choose to maintain Google’s position by continuously returning to it.

“It is open to the consumer to choose the product that best suits them, but it is also open to individual companies to partner with whichever companies they choose,” he countered.

“Consumers want a service that offers good performance and enables them to find what they want quickly and easily. Google has entered a market and gained market share by giving consumers what they want.”

“On one level, the internet search engine market obviously operates in a free market environment, and in the UK there are no barriers to a consumer’s ability to switch to a preferred search engine or to stay loyal to the one of their choice.”

“Many search engines, including the most popular, have local versions that search only UK websites.”

It was also announced recently that, in the US,Google may be subject to a Justice Department injunction over its planned acquisition of a travel firm amid anti-trust allegations.

There we have it. The official line is that it’s up to the consumer. The unofficial line, hiding just behind, is that money makes the world go round and Google has powerful lobbyists.