Sen. Mike Lee arrives with members of his staff for Wednesday's Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights hearing.
Despite a reputation as a free-marketeer and staunch opponent of government regulation, Sen. Mike Lee on Wednesday was sounding a lot more like his colleague Sen. Al Franken (D-Minn.) than like Milton Friedman.
The Utah Republican is a reliably conservative and libertarian voice in the Senate, which has made him a thorn in the side of his own leadership and a hero to conservatives and tea party activists. But when it comes to Google, at least, Lee has demonstrated far less ideological purity.
Utah is home to a number of large online retailers, including 1800contacts.com, which Lee represented while he was an attorney in private practice and which Lee's chief of staff, Spencer Stokes, represented while he was a lobbyist in Utah.
Those companies, which have had unrelated disputes with Google in the past, could be seriously hurt if Google is operating its search engine in such a way as to crowd out competitors to its retail businesses.
During a Wednesday Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights hearing on Google's business practices, Lee took Google Executive Chairman Eric Schmidt to task.
Lee, the ranking member on the subcommittee, raised a series of complaints about Google's practices, charging the company uses its Internet search market dominance to steer consumers to commercial sites it operates.
"Growing complaints that Google is using its search dominance to favor its own offerings at the expense of competition deserve serious attention, especially if consumers are misled by Google's self-rankings and preferential display. Such bias would deny user traffic and revenue to competing sites, depriving those sites of resources needed to develop more innovative content and offer better services to customers," Lee said in his opening statement.
"As a conservative Republican who favors free markets, I believe that ensuring robust competition in this critical area of our nation's economy will benefit consumers, spur innovation and lead to job creation. In this instance, I believe that preserving competitive markets through antitrust principles can help forestall the imposition of burdensome government regulation," Lee added.
During questioning, Lee was even harsher. At one point, Lee used a chart he said showed that while other price-comparison sites rated their products in varying degrees of affordability, Google's search ranking always showed Google's products in third place — a position Lee argued is the most "valuable real estate" on a webpage.
"You cooked it so you're always third," Lee said.
Schmidt, who disputed the basic assumptions Lee was making in comparing Google with other sites, rejected that statement. "I can assure you, we haven't cooked anything," Schmidt said.
A clearly unhappy Lee shot back that Google has "an unnatural attraction to the number three."
Later, Lee made clear his dissatisfaction with Schmidt's responses. "Some of my fears, I have to say, have been confirmed," Lee said.
Lee's performance Wednesday raised eyebrows, particularly among conservatives and libertarians who normally find themselves aligned with him.
Nick Schulz, the Dewitt Wallace Fellow at the American Enterprise Institute, said Wednesday, "I watched his line of questioning of Schmidt, and I know he's been very interested in pursuing" whether Google's dominance is a monopoly.
Although Schulz said he understands the impetus behind the hearings, "in the abstract — you worry about if you go down this road how much does having to come before Washington and justify every action ... how much does that change your culture" and reduce innovation.
Particularly in the high-tech field, Schulz argued, aggressive oversight by Congress or the Department of Justice can have a chilling effect.
"That would be where I think Lee is not taking that into account. He's worried, and I think genuinely worried, about the dominance that Google has" without realizing the effect hearings like the one Wednesday can have, Schulz argued.
But Lee spokesman Brian Phillips said, "Just the contrary, he's worried that now that he was disappointed in testimony, that DOJ and others in Congress who are not open to self-correcting action are going to do something.
"He would much, much more prefer to not get into federal regulation or have law enforcement get involved," Phillips said. He explained that while "his personal philosophy is that less federal regulation is better," as the top Republican on the Antitrust panel, "he [had] an obligation to take those concerns seriously" when businesses complained about Google's practices.
According to Phillips, Lee's aggressiveness during the hearing was designed to try to prod Google's top executive into acknowledging the concerns and demonstrate the company is taking steps to ensure fair competition is occurring.
"Everyone wanted to hear Eric Schmidt say, 'Yes, we understand that we have a monopoly on Internet search ... and here are the things we are doing to make people comfortable' with that reality," Phillips said. "Unfortunately, he didn't hear that today."
Phillips also roundly rejected the notion that his and his top aide's previous relationship with 1800contacts.com had any bearing on the lawmaker's aggressive grilling of Schmidt.
He noted that, in the case of Stokes, he lobbied for the company "completely unrelated to the issues related to the hearing today" and that the company did not come up in internal office preparations for the hearing.
Likewise, Phillips acknowledged that while Lee worked as an attorney for the retailer, "he did work on cases for them ... on unrelated issues."
Those relationships "certainly wouldn't have played a role in the hearing. ... This is really just about trying to head off any federal regulation rather than the opposite," Phillips said.
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