Google Faces Possible Anti-Cartel Investigation
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Google may appear to be ready to take over the world, but it still has some major regulatory issues to confront. Its advertising deal with Yahoo has anti-trust agents in both the US and Europe up in arms, to say nothing of Microsoft and certain advertising organizations. Keep reading to find out what the fuss is all about.
Do Google's troubles have no end? The company must be wondering at this stage whether there is any wisdom at all in the old saying about trouble coming in threes. After the recent difficulties over its privacy policy, being sued for a cool $1 billion by Viacom and then the Chrome browser licensing furor, Brin and Page must have been hoping that the end was in sight.
No such luck. If anything, things got a whole lot worse with the announcement in September that the US Justice Department has hired Sanford Litvack to head up an anti-cartel investigation into the search giant's activities. The case revolves around the profit-sharing advertising deal Google made with Yahoo in June which, it has been suggested, could give Google a greater than 80 percent share of all online advertising in the USA.
Litvack, whose credits include time spent at Hewlett Packard and Compaq during the acquisition of the latter, is no stranger to the kind of arrangements that prevail in the IT industry. Nonetheless, he could have his work cut out for him, given how experienced Google is being forced to become at defending itself in court. The company's "Do No Evil" philosophy is starting to sound more than a little hollow as its appetite for scooping up an ever greater share of the IT industry shows no signs of being satisfied.
The Yahoo deal has been vigorously opposed by large sections of the industry including -- ironically, given its own anti-trust history -- Microsoft, and the Association of National Advertisers, while more reserved caution has been expressed by the International Advertising Association and the American Association of Advertising Agencies. Opposition to the deal is based mainly on the claim that it will seriously reduce competition and lead to price increases in the online advertising market. Microsoft in particular has taken a robust line, accusing Google of being the only company in the history of advertising to have the opportunity "to control prices on up to 90% of advertising in a single medium."
Next: More Opposition and Google's Response >>
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