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Google chief promises Senate: We'll be good!

While acknowledging that his company has extraordinary power and influence over the Web, Google Chairman Eric Schmidt yesterday promised the Senate that Google wouldn't be evil.

During his testimony before the Senate Judiciary Committee yesterday Schmidt acknowledged that the past behavior of tech behemoths gave lawmakers ample reason to suspect Google might be using its extraordinary market power to stifle competition. But he tried to assure lawmakers that this wasn't the case because Google had no desire to repeat the mistakes of past tech giants.

BACKGROUND: Report: U.S. FTC preparing to serve subpoenas to Google

"Twenty years ago, a large technology firm was setting the world on fire," said Schmidt in a thinly veiled reference to Microsoft. "Its software was on nearly every computer. Its name was synonymous with innovation. But that company lost sight of what mattered ... in the years since, many of us in Silicon Valley have absorbed the lessons of that era."

At issue in yesterday's hearing was whether Google used its disproportionate power in the search engine space to favor its own secondary services in search results over those of its competitors. Wisconsin Democrat Herbert Kohl, for instance, quoted Google Vice President Marissa Mayer as saying that Google favored its own Google Finance search results whenever users search for stock market quotes on publicly traded companies. Schmidt responded that Google's goal was to take out extra steps from users' search, so if they entered "Microsoft stock" into the search engine the first result would be a chart featuring the latest quote from Microsoft's share price. Similarly, when someone types an address into the search engine they are first given a map provided by Google Maps rather than a link to a competing map site.

Kohl then asked Schmidt if the public could really trust a self-interested company to resist the temptation to use its incredible market power to heavily tilt the playing field in favor of its own products at the expense of others.

"I'm not sure Google is a rational business trying to maximize its own profits," Schmidt responded, and emphasized that the company is most focused on providing the best answers for consumers through both traditional 10-link search engine results and through its own secondary services.

Utah Republican Mike Lee also pressed Schmidt on whether his company "cooks" search results for its own benefit by citing an independent study showing that Google Shopping persistently ranked third in searches for products while rival shopping sites vary much more widely in where they pop up in product searches.

"You're always third every time, how do you explain that?" asked Lee. "When I see you magically coming up third every time ... you've cooked it so you're always third."

Schmidt assured Lee that the company hadn't "cooked" anything and said that he wasn't aware of any "strange boosts or biases" that Google gives to its own services.

Minnesota Democrat Al Franken said that scrutinizing Google's search practices was particularly important since the search engine had also come to dominate the mobile market as the default search engine on the Apple iPhone and on all of its own Android-based mobile devices. He also said that while he appreciated the way that Google "utterly transformed the way we use information," the company's "unprecedented growth is one of the reasons we need to pay attention to what you're doing."

Needless to say, rival tech players invited to testify during a subsequent panel at the hearing were not buying Schmidt's denials that his company was favoring its own results over others. Yelp CEO Jeremy Stoppelman, for instance, accused Google of trying "to send consumers to the most profitable sites on the Web: their own." And Thomas Barnett, an outside counsel for Expedia, said that any suggestion that Google would never take advantage of its own market position was absurd on its face.

"Google won't admit to reality," he said. "Google has monopoly power."

The Federal Trade Commission this past summer opened up an antitrust investigation to learn if Google was using its market power to drive Web traffic to its own sites. Schmidt acknowledged the FTC's investigation during his testimony today and said that the commission's inquiry would eventually "reveal an enthusiastic company filled with people who believe we have only just scratched the surface of what's possible."

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