Google Inc has evolved to become a dominant and potentially anti-competitive force on the Internet, senators said at congressional hearing on Wednesday.
Google is in a position to determine who will succeed and who will fail on the Internet, said Republican Senator Mike Lee, a member of the Senate Judiciary Committee's antitrust panel. In the words of the head of the Goggle's search ranking team, Google is the biggest kingmaker on Earth.
Google has been broadly accused of using its clout in the search market to stomp rivals as it moves into related businesses, like travel search.
The Federal Trade Commission is looking into that charge and others, including whether Google manipulates its search result rankings to favor its own products.
Democratic Senator Herb Kohl, chairman of the Senate panel, said Google started as an unbiased search engine but said the company has changed as it has become more dominant.
Does Google's transformation create an inherent conflict of interest which threatens to stifle competition? In the last years, Internet businesses that compete with Google's new products and services have complained that Google is now behaving in a way that's contrary to free and fair competition, Kohl said.
Google Executive Chairman Eric Schmidt calmly walked the senators though his argument that Google operates in a competitive environment. He said he is confident the FTC will clear the search giant of any wrongdoing.
While no company would request such a government investigation, we are confident that our business practices will stand up to scrutiny, Schmidt said in written testimony.
Representatives of rival Internet-based companies, including travel site Expedia Inc, user reviews site Yelp Inc and comparison shopping operation Nextag Inc, were due to air their complaints at the hearing after Schmidt.
Google controls more than two-thirds of the global search market. But Schmidt argued specialty web sites -- like those with restaurant reviews and travel search -- give Google stiff competition.
Facebook is another competitor, Schmidt contends. Consumers, particularly young ones, increasingly are turning to their online friends to find out what to wear, where to eat, and what to watch, he said.
Schmidt was Google's chief executive officer from 2001, but vacated the post to company co-founder Larry Page in April.
Schmidt now serves as executive chairman and oversees government affairs -- a position of critical importance during the FTC probe.
(Reporting by Diane Bartz and Malathi Nayak; Editing by Tim Dobbyn)