Not only is Google not dominant in the search market, but it doesn’t hold market power. Or at least that’s what chairman Eric Schmidt now claims.
The freshly-published comments come in the wake of Schmidt’s appearance before the Senate’s Antitrust, Competition Policy and Consumer Rights subcommittee in September. Back then he agreed that when it came to having enough market share to be able to put down rivals, Google was “in that area.”
Schmidt agreed to answer follow-up questions in writing, details of which have now been released. It appears this time the lawyers took a look through his responses as he’s much more defensive, arguing “Google has many strong competitors. Google has none of the characteristics that I associate with market power.”
In the most recently released estimates, Google was listed as having a 65.3 percent share of US searches. Yahoo took second place with 15.5 percent and Microsoft third with 14.7. As the latter two collaborate on search, that effectively means two groups control more than 95 percent of the market. The subcommittee is investigating several areas where this may raise competition issues, both in the way search firms decide which sites are listed and in which order, and in the market for search-related advertising.
Schmidt’s response also noted that “We sometimes fail to anticipate the competitive threat posed by new methods of accessing information.” While it might seem odd to appear to admit such a failing, the statement was designed to promote the idea that the relevant market doesn’t just consist of search engines, but also other forms of search such as that on Facebook. Schmidt also specifically mentioned Apple’s “virtual assistant Siri”, though that service does use the major search engines when it deals with questions that can’t be answered through a specific website or service.
Rather oddly Schmidt’s list of competitors in the search market also included “direct navigation” — in other words people simply typing in the website address they want to visit. While it’s technically true that more people doing that would harm Google’s business, it doesn’t really seem relevant to market share debates.
(Picture credit: Guillaume Paumier / Wikimedia Commons, CC-by-3.0)