Google is big enough and significant enough both societally and commercially to attract scrutiny that others may not. This week the company had a service outage that provoked wide reaction and made a commercial announcement that brought to light some behavioral issues that are unattractive in a monopoly.
Specifically Google announced open season for ‘trademark’ keyword bidding in AdWords. They did this through the prism of ‘improving the consumer experience’ but to trademark owners the announcement read more like a protection racket effectively forcing them into an auction to maintain top listing for their own sites despite their trademarks and years of investment in marketing and legal protection.
At the same time Google’s customers and regulators have been reminded that Google employs a number of strategies to intercept attempts at direct site navigation with opportunities for a paid click. The Chrome browser is the most obvious device but Google’s refusal to act against adware companies and so-called typo-squatters give further credence to those that believe that Google is happy to extract money from advertisers even when their Adwords product offers zero incremental consumer utility.
In all these cases ‘enhanced user experience’ is an argument which hovers between tenuous at best and spurious at worst. Google is incredibly vocal about preventing the organic listings from being ‘gamed’ by third parties but seems entirely relaxed about gaming the rest of the customer experience.
The simple fact is that Google has an easy choice – just stop this (and just stop the API fees to advertisers).
The bigger issue the company should focus on is the long term trend of click migration from paid to organic and what that means for its sector. The solution to that is not shabby business practices. No one wants regulation in free markets but Google maybe skating on thin ice if regulation is not its aim.