Google: Conflicts of Interest

Google is the most dominant search engine in the United States as well as in the world. It controls more than two-thirds of the readership in the United States. This means that if it were an actual newspaper, Google would have been open to antitrust violation lawsuits. Google has a greater stranglehold on the readership in the United States than any other corporate player.

Google has always enjoyed a great reputation with its customers and with the society in general. It had more responsibilities than compared to an average company in America. However, if its past actions are analyzed, it appeared like the company did indeed take these responsibilities seriously and discharged them in a fair and unbiased manner.

However, all this has changed in the recent past. Google has made several acquisitions. As a result, Google faces a massive conflict of interest. In this article, we will understand more about this conflict of interest.

The Conflict Of Interest

• In the United States, Google has acquired a local listing company called Zagat. This company is in direct competition with Yelp which is more popular and widely used. However, ever since Google took over Zagat, it is alleged that Google has been forcibly promoting Zagat over Yelp.

• Similarly, Google has started a new line of business called YouTube programming. This is a subscription-based model where content from popular television channels is streamed on demand. YouTube programming is in direct competition with Hulu which is owned and operated by Walt Disney. Once again there have been allegations that Google is misusing its power as the dominant search engine to promote its own products.

• Google has also introduced a product called Google Shopping in the North American market. This product replaces Google Product compare which was only meant to provide information and allow comparisons. Hence, when users want to buy a certain product, Google is covertly redirecting them to its own websites. This means that Google will now charge retailers to have their products displayed. Earlier this display was determined based on an algorithm which was supposed to keep it away from advertisers influence.

• Similarly, Google has introduced a payment wallet called Google Tez in India. This is in direct competition with PayTm which is the more popular app used in India. Google is using its might to steer users away from PayTm

• Several other programs such as Google flight finder, Google hotels, and even Google adviser are underway. If all these programs become operational, Google might no longer be giving the most relevant information to their users. Instead, it will end up sharing information from which it can maximize the advertising revenue.

Are Users Being Deceived?

Google insists that there has been no deception on their part. This is because the search results for which Google may be compensated are displayed distinctly. Google insists that the organic search results are still completely free from advertising influence.

However, the problem is that the look and feel of the paid search results are almost same as Google’s organic results. These results are not easily distinguishable like the sponsored results which are on the right-hand side of every Google page. It seems like the core job of Google is undergoing a change. Earlier it used to redirect the users towards a destination. However, now they own some of the destinations. It is obvious that over a period of time Google will try to obscure organic search rankings to promote their own products. At the present moment, users are not aware of this change. However, as more users become cognizant of this, Google can expect a bigger backlash from its core customer base.

Is This Illegal?

The legality of Google’s new strategy is not such a simple issue. However, what is clearly visible is the fact that Google is definitely deviating from its stance. When the company first went public, the red herring prospectus called Google an objective and unbiased search engine. However, such clear language has been replaced by more muddled industry jargon. Sources familiar with the matter claim that Google has been subtly changing its prospectus to ensure that they can defend their turf if there is a lawsuit against the company. Also, when representatives of Google were asked if they would ever allow paid promotions within their organic content, they responded with a meek “No comments” instead of a vehement no which was the usual answer earlier.

Google’s actions may or may not be legal as of now. However, they are definitely not ethical. The trust of the users and the relevance of the result that has made Google the biggest search engine in the world are being put to test with the introduction of these new products.

Google claims that its annual revenues will go up by as much as $1 billion as a result of these inclusions. However, this erosion of trust may provide companies like Bing and Yahoo with the opportunity to increase their share of readership in the United States and across the world.

The change at Google is not just a new strategy. Instead, it is a change in the underlying philosophy. The reaction of customers and the final impact on the business of Alphabet Inc. is yet to be seen.

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The article is Written By “Prachi Juneja” and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.