Should the Government Regulate Google? The NYT Seems to Think So

In a somewhat surprising move, the New York Times has thrown its weight behind calls for a government inquiry into Google (s GOOG) and its search algorithm, by raising the prospect of a government investigation into and/or regulation of the company in an editorial published in the newspaper on Thursday. While the paper’s editors stop short of calling on the government to take specific action against the web giant, they state that “a case is building for some sort of oversight of the gatekeeper of the Internet.” The editorial comes as Google is facing increasing pressure from regulators in both the United States and Europe.

The NYT piece is short on evidence and long on rhetoric, however. The editorial says that Google is responsible for nearly two-thirds of Internet searches worldwide and adds — in a strangely folksy tone — that analysts “reckon that most Web sites rely on the search engine for half of their traffic.” The editorial goes on to talk about how Google engineers can break the business of a website with a single tweak of the company’s “supersecret algorithm,” by pushing the site down in its search rankings. This is even more important now, the editorial states, because Google has branched out into other services, where it has acquired “pecuniary incentives to favor its own over rivals.”

Although it doesn’t mention any specific cases, the NYT argument is almost certainly based (at least in part) on the claims of a little-known Google competitor called Foundem, which runs a comparison-shopping site and has complained — in a New York Times opinion piece, among other places — that its business has been adversely affected by Google’s alleged rigging of its algorithm. Gary Reback, the Silicon Valley lawyer who helped bring a federal antitrust case against Microsoft in the 1990s, has reportedly been making the rounds in Washington, D.C., introducing the founders of the company to various sources within the government. Foundem is also one of the three complainants who have raised antitrust issues regarding Google with the European Commission.

The New York Times editorial focuses specifically on the company’s “supersecret algorithm,” and the suggestion that it is stacking the deck in its own favor, something other prominent critics such as telecom consultant Scott Cleland have also raised. Even some relatively neutral technology observers have raised questions about the need for more transparency about its search algorithm. Chris Dixon, co-founder of and a seed investor in a number of startups, commented on the NYT editorial on Twitter by saying: “I don’t buy the ‘security thru obscurity’ argument. I don’t want govt regulation but think goog needs to open up algo more.”

Google’s vice-president of search product, Marissa Mayer, responded to some of the criticisms levelled against the company in an op-ed piece published in the Financial Times yesterday (her comments are also now on Google’s Public Policy blog), in which she says that search is complex, and that enforcing some arbitrary standard of “neutral” search results would make innovation impossible. Meanwhile, search expert Danny Sullivan said that there have never been any serious allegations of anti-competitive behavior lodged against Google, nor any sign that the search company rigs its algorithm. Sullivan also sarcastically suggested in his blog post that the New York Times should be investigated for its “supersecret” editorial policy.

Could Google be rigging its search results? Perhaps — but as Sullivan mentions in his blog post, if there were significant signs that Google was favoring its own properties, wouldn’t large competitors such as Microsoft (s MSFT) or Amazon (s AMZN) or Yahoo (s YHOO) have raised this issue before now, rather than a tiny handful of little-known European competitors? Maybe there is a case for government oversight of Google, but the New York Times has failed to make that case, and so have most of the others who have tried to do so to date.

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Post and thumbnail photos courtesy of Flickr user Kevin Dooley