BUSINESS CLASS: Hating Google

Our travels this week take us to the Continent, where Google is under attack over issues of privacy, anti-trust and general omnipresent-ness. And to the Virgin Islands' St Croix, where New York economists wear trunks, eat burritos and promenade by the sea.

Life's tough at the top. That's been the lesson for Google this week, which appears to be collecting enemies at the rate its infamous algorithm collects data.

Top of the list of Google's newest haters is Vivi Down, an Italian advocacy group for people with Down's Syndrome, which went on the warpath over a video that was uploaded via Google Video in 2006, featuring a group of children bullying a child with the chromosomal disorder.

Not satisfied with the successful conviction of all of the child perpetrators, the group wanted Google held responsible for its part in giving the disturbing video a global viewership. And this week a Milanese judge obliged, convicting three Google executives of violating the victim's privacy and imposing a suspended sentence of six months jail. And while there will be no actual jail time and no financial penalty, the implications for the internet, says the LA Times, are "enormous and chilling." A point that the blogosphere has latched onto with grim abandon.

"This decision sets a disconcerting legal precedent," says Sam Schroeder at Mashable. "Forcing service providers to police content uploaded by users is one thing (arguably wrong, but that’s another matter), but sentencing employees of those service providers to jail over such content is at the very least bizarre and shows a blatant misunderstanding of how the internet and various social content sharing services work. If not overturned, this decision might have long lasting consequences on all content-sharing services on the internet."

"This is just downright ridiculous," says TechDirt's Mike Masnick. "Nearly a year ago, YouTube noted that 20 hours of video are uploaded to the site every minute. To think that Google should automatically have knowledge of what's included in every video uploaded to YouTube is ludicrous... Within hours of Google being alerted to the problems with the video, the video came down. ...the company acted promptly when questions about the video were raised. But even more importantly, the video itself was used as evidence to punish the taunting teens. ...Why would you ever want to blame Google for providing a tool that allows stupid people to give proof of their own illegal activities?"

And there are implications for Italy, too. "It’s at this point one wonders if we should just give up on Italy as ever getting the internet," says Mike Butch at TechCrunch. "If Italy wants to hold them responsible, it should anticipate a future without the internet innovations that freer countries in the world enjoy," says BusinessWeek's Ann Woolner.

Next to join the burgeoning ranks of Google adversaries is the triumvirate of UK shopping site Foundem, French legal search engine Ejustice.fr, and Ciao! – a German online shopping portal owned by, ahem, Microsoft. Between the three companies, they have accused Google of using its dominant position in the search market to stifle competition and have complained about the way Google sells ads. These charges are now being informally "examined" by the European Commission, which has the power to impose a penalty of up to 10 per cent of Google's $US23.6 billion annual revenues should it find that Google is guilty.

But as TechCrunch points out, this European broadside against Google's market dominance has the fingerprints of the search giant's age-old nemesis, Microsoft, all over it. "This is, of course, quite interesting since Microsoft has famously been involved in antitrust investigations for over a decade now in Europe (and previously, of course, the US too). In fact, this whole browser ballot thing is a result of the ongoing EU attempt to make sure Microsoft is playing fairly."

"Something else interesting," says TechCrunch's MG Siegler, "as The Telegraph notes, 'Foundem is a member of ICOMP, an internet pressure group which receives funding from Microsoft'." Interesting indeed.

But now that Microsoft's 'cheeky' prediction that Google would face anti-trust scrutiny in Europe has come true, says Mike Harvey in The Times, "it appears that the preliminary investigation ...may not hold too many terrors for the company. Google is confident that it has not broken any rules."

And the WSJ's Martin Peers agrees: "Investors needn't be too rattled just yet. Yes, Google clearly has a dominant share of the European search market, with 78.9 per cent in January, according to comScore, more than a dozen percentage points above its US share. But simply having a dominant share isn't illegal, even in Europe. And the inquiry at this point is preliminary."

However, there is some danger, says Harvey, that "now that the dam has burst, other bigger rivals might come forward with further claims, miring the company in years of bad publicity and legal actions."

And then there's the "slew of companies" that are continually challenging "Google’s central premise: that a single search engine, through technological wizardry and constant refinement, can satisfy any possible query," says Steven Levy in Wired magazine. "None of these upstarts individually presents much of a threat, but together they hint at a wide-open, messier future of search – one that isn’t dominated by a single engine but rather incorporates a grab bag of services."

But "the biggest threat to Google," says Levy, is Bing – "Microsoft’s revamped and rebranded search engine ...launched last June to surprisingly upbeat reviews. ...Team Bing has been focusing on unique instances where Google’s algorithms don’t always satisfy, [like] the health, reference, and shopping sectors." He adds, "the new look [Bing], along with a $US100 million ad campaign, helped boost Microsoft’s share of the US search market from 8 per cent to about 11 – a number that will more than double once regulators approve a deal to make Bing the search provider for Yahoo."

A word from Paul

Google "Paul Krugman" and somewhere among the results – beneath the bits that say "New York Times' Paul Krugman, Nobel Prize winner, blogs about economics and politics" – you will find this sprawling New Yorker profile. It is 12 internet pages long but well worth a read, offering a great insight into the slightly less nerdy side of Krugman – the side that has two cats called Doris Lessing and Albert Einstein (we did say "slightly") and that "wears the same shirt for days, a short-sleeved plaid cotton shirt, and bathing trunks."

But the bit we particularly liked, and will share here, is this little explainer about the fabulous dichotomy that is economics:

"Economics is really about two stories. One is the story of the old economist and younger economist walking down the street, and the younger economist says, ‘Look, there’s a hundred-dollar bill,’ and the older one says, ‘Nonsense, if it was there somebody would have picked it up already.’ So sometimes you do find hundred-dollar bills lying on the street, but not often – generally people respond to opportunities. The other is the Yogi Berra line ‘Nobody goes to Coney Island anymore; it’s too crowded.’ That’s the idea that things tend to settle into some kind of equilibrium where what people expect is in line with what they actually encounter."