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(Paul Sakuma/AP)
(Paul Sakuma/AP)


Web giant Google: Is so big so bad? Add to ...

In many ways, Google's Washington push appears to be largely successful. In the last few years, the company has won battles over net neutrality, advocated making new parts of the wireless spectrum open to a multitude of devices, gotten all of its acquisitions approved by regulators and kept new privacy laws at bay.

Even last month, privacy activists, who have long focused on Google, were frustrated when Congress released a draft of a privacy bill meant to regulate data collection practices on the Web -- which would be a first for the United States.

Provisions in the bill called for websites to discard customer data after 18 months or make it anonymous, and to offer users access to a "profile manager," which would allow them to see why they were being shown certain ads. Both are already policies at Google. The company lobbied while the bill was being written and it was seen as largely favourable to the company.

The bill "demonstrated Google's ability to frame the issue to their own benefit," said Jeffrey Chester, director of the Center for Digital Democracy. "Google likely dodged a bullet."

Google representatives declined to characterize the bill as any kind of legislative victory, saying they still had concerns about it. The response, Google allies say, is consistent with the company's overall attitude in Washington.

"They don't want to be a Washington player. They want to be seen as a technology company that explains to Washington what they're doing," said Markham Erickson, executive director of the Open Internet Coalition, an industry trade group of which Google is a member.

Mr. Erickson said that Google executives thought they were doing the right thing for consumers and the Internet, and that simply by educating lawmakers on Google's good intensions, they would ultimately win the day.

But even Mr. Erickson acknowledges, "Once you're big, you're not cute anymore."

There is ample evidence that Washington regulators think Google has already outgrown its cute stage.

Jon Leibowitz, the chairman of the Federal Trade Commission since last March, has shown his willingness to stand up to Google, most recently with the FTC's inquiry last year into the board-level relationships among Google and two of its rivals, Amazon and Apple. That investigation caused several prominent Silicon Valley business leaders, including Eric Schmidt, Google's chief executive, to give up board seats at other companies.

In January, Howard Shelanski, an FTC economist, underscored the agency's attention to Google. In a speech at the University of Colorado, Mr. Shelanski said that the concern over network neutrality should also apply to a dominant online search engine that might unfairly discriminate against individual companies.

Though he did not name the search engine, the implication was clear: The FTC was worried that Google could show prejudice against competitors - exactly the complaint that has been levied by some comparison shopping sites, including Foundem.

Leading the Department of Justice's antitrust division is Christine Varney, an assistant attorney general, who represented Netscape during the antitrust case against Microsoft over its practices promoting Internet Explorer. Ms. Varney has publicly said she thinks Google may merit antitrust scrutiny. "Microsoft is so last century," she said in a 2008 speech. She said Google could be a problem because it had "acquired a monopoly in Internet online advertising."

One person at the Department of Justice, who spoke on the condition of anonymity because he was not authorized to talk about the situation publicly, said that the antitrust division was constantly examining Google's behaviour, trying to gauge whether the company was living up to its claims of neutrality.

"Google won a lot of good will by presenting itself as neutral to a lot of different content," this person said. "The question is, are there real examples of chinks in their armour in their claims of neutrality?"

But Google itself may be giving regulators and legislators more reasons to take a closer look. Its collection of private data over WiFi networks followed a similar misstep in February over the Buzz social network, which publicly exposed the contacts of Gmail users with little warning.

Google's high-profile mistakes hurt because they convey the impression that Google's behaviour is increasingly inconsistent with its "Don't be evil" mantra.

One of Google's founders, Sergey Brin, acknowledged the mistake last week at the company's annual conference for developers in San Francisco. "We screwed up, and I'm not making excuses about it," Mr. Brin said. "Trust is very important to us, and we're going to do everything we can to preserve it."

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