To get a sense of how that works, do a search for, say, "pizza in San Francisco" (substitute the name of your city for mine). You'll notice that the top results include a map with red icons pointing to businesses that are part of the Google Places network. Other websites argue that by placing Google's partners at the top of the page, their own listings, such as the ones for Yelp.com, are unfairly pushed down in search results. In that sense, they are claiming that Google is picking winners and losers in the broader, Web-driven economy.
This wouldn't be an issue if there were lots of search engines around with competitive market shares. But in reality, there aren't. Google's share of search traffic has hovered around 60 percent for years, while its share of search advertising -- an even more important metric -- is about 73 percent.
The search giant says it does use its power fairly: "At Google, we've always focused on putting the user first," wrote Amit Singhal, a Google fellow in a blog post. "No matter what you're looking for -- buying a movie ticket, finding the best burger nearby, or watching a royal wedding -- we want to get you the information you want as quickly as possible. Sometimes the best result is a link to another website. Other times it's a news article, sports score, stock quote, a video, or a map."
If it turns out that Google is using its power fairly, it's end of story and tough luck for the companies that can't compete.
But there's more to the investigations than the issue of Places, and this is hardly the only time Google has been investigated for alleged bad behavior. The United States has looked at its acquisitions, while the European Union is examining its search practices. But the current investigation is likely to be the most far-reaching and potentially significant.
What's at stake for IT
If you're in IT, you may not care very much about search results for pizza restaurants. But advertising is what powers the Google innovation engine. Without those billions of dollars, there wouldn't be an Android mobile platform, and Google Apps wouldn't exist. Conversely, what about companies that don't have that advertising clout? By unfairly (if that's proven) losing out, that money is sucked away and their power to innovate is diminished.
The technology industry depends on interrelated ecosystems. A strong Google supports Android, which supports developers, device makers, carriers, chipmakers, and so on. Think back to the 1990s and remember what happened to the software ecosystem as Microsoft bullied and threatened and tied (products to Windows, that is) its way to dominance.
Now think about the Intel settlement. The FTC had charged that Intel used a series of threats and rewards to convince PC makers such as Dell, Hewlett-Packard, and IBM to avoid buying chips from the competition. I've covered the technology industry since the 1990s and over the years have heard that charge repeated (but never proven) by my sources many times.