Google’s Schmidt Gets Off Easy in Senate Testimony

Despite hostile testimony from competitors, hearing mostly friendly

Google Chairman Eric Schmidt

WASHINGTON—Google chairman Eric Schmidt may never list Wednesday as one of the favorite days of his life, but, really, it could have been much worse. Yes, he had to face more than an hour and a half of questioning by members of the Senate Judiciary Committee's Subcommittee on Antitrust, Competition Policy, and Consumer Rights, but he ultimately got off easy. None of the senators were able to lay a glove on him or his company, and though he's made gaffes in the past, he avoided making any major mistakes, and came off as prepared and at ease.   

The roughest moments for Schmidt and Google came when representatives from other tech companies—Jeff Katz, CEO of Nextag; Jeremy Stoppelman, CEO and co-founder of Yelp; and Thomas Barnett, a partner with Covington & Burling who represents Expedia and TripAdvisor—testified that Google’s search practices unfairly favored its own services over theirs. They weren't sparing in their criticism. Yelp's Stoppelman, for instance, said, "Google is no longer in the business of sending people to the best sources of information on the Web. It now hopes to be a destination site itself for one vertical market after another, including news, shopping, travel, and now, local business reviews. It would be one thing if these efforts were conducted on a level playing field, but the reality is they are not."

But Google had an answer for the criticism. It made Schmidt available outside the hearing room while his critics were testifying, and many of the reporters present rushed out to hear him. 

It also helped that the questions the subcommittee members directed at Schmidt often revealed that they were out of their depth. The questions were predictable and largely geared toward trying to understand just how Google runs its search business and how it resolves the conflict between operating an unbiased search engine and owning content it needs to monetize.

Schmidt admitted that the business mission of Google had changed from the days when its sole mission was to provide consumers with an unbiased search engine. But, he said, “Now we can algorithmically compute an answer. That’s an improvement for the end user."

Only two senators—Sen. Michael Lee, R-Utah, the ranking member of the subcommittee, and Sen. Al Franken, D-Minn.—were really tough on Schmidt. Lee even offered up a chart as a visual aid that he said demonstrated that Google favored its own services over others.

“This is an uncanny statistical coincidence. Google magically comes up third every time. You’ve cooked it so you’re always third,” said Lee, who called Google "a monopoly gatekeeper to the Internet."

Franken was skeptical of Google’s success, but he was also smitten, prefacing his questions with, “I love Google.”

“I am admittedly skeptical of big companies that control both information and the distribution channels. When you dominate how people search and you own separate products and services, your incentives shift,” Franken said. “That’s the crux of this.”

More smitten with Google than any other member on the subcommittee was Sen. Chuck Schumer, D-N.Y., who received at least $10,000 from Google employees in the 2010 election cycle.

“Google is building the infrastructure for the future economy,” Schumer gushed. In meetings he's held with small high-tech companies in New York, he said, “four-fifths said Google was a positive force.” He then asked why Google wouldn’t build one of its high-tech broadband centers in New York, rather than Kansas City.

Following the hearing, Schmidt told reporters that it “went fine. It was my first opportunity to testify," he said. "I answered the questions the way I thought I should answer them.”


Publish date: September 21, 2011 © 2020 Adweek, LLC. - All Rights Reserved and NOT FOR REPRINT