On antitrust, is Google the next Microsoft?
Google is under fire in Washington by an unlikely combination of onetime antitrust defendants like Microsoft and AT&T and liberal consumer groups that have been their traditional antagonists because of the takeover deal with DoubleClick.
David Evans, a consultant with the firm LECG hired by Microsoft, calculates
that Google currently has a 27 percent share of the market for
"publisher tools." But if combined with DoubleClick, Evans says, the
company would command 78 percent of the publisher tools market.
Microsoft and its occasional allies met separately with key congressional committees that deal with consumer protection and antitrust issues - both of which announced last week that they will hold hearings on Google's plan to spend $3.1 billion to buy DoubleClick.
The Federal Trade Commission, which must review the merger on antitrust grounds, has also been meeting with Google, Microsoft and those nonprofit consumer groups, according to sources familiar with the meetings. The European Union, egged on by American consumer groups like the Electronic Privacy Information Center and the pro-regulation Center for Digital Democracy, is reviewing the merger too.
All this amounts to the first serious political threat to a company that has grown to a market capitalization of $162 billion by worrying more about serving customers than catering to the whims of bureaucrats and politicians. Longtime Washington observers believe that even if the DoubleClick acquisition is eventually permitted, federal scrutiny will only increase.
"There is certainly a lot more scrutiny of Google now that they are the No. 1 player in this space and are acquiring other companies." concludes Ari Schwartz from Center for Democracy and Technology.
By any measure, Google is seriously outgunned in Washington. Its spending on lobbyists in 2006 amounted to a mere $720,000, last year AT&T wrote checks for at least $27 million to buy political influence and Microsoft spent $8.9 million.
The disparity is even greater over a longer period. Starting in the late 1990s, when Google was moving into its first office, AT&T and Microsoft spent a combined $179 million while Google spent a mere$540,000. (That's counting lobbying and political contributions through 2005, as calculated in News.com's special report last year.)
It's no surprise that Google has paid little attention to Washington and hired a government relations director just over two years ago: it's not in a heavily regulated industry likeAT&T. Microsoft, of course, began writing fat checks to lobbyists--including Rick Rule, a former top Justice Department antitrust official--only after its antitrust headaches began in 1997.
Comments
Be the first to write a comment
You must me logged in to write a comment.