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Google's Algorithmic Cat and Mouse Game: The Case against Greater Transparency

-- By FarayiMafoti - 21 Oct 2011

Google, Give us a Peak

Google is now the subject of antitrust scrutiny, having been accused of leveraging its dominance in the “"keyword targeted internet advertising" space (consider this attempt number 1 at defining the relevant market here) to favor its own services to the detriment of a competitive market for the purpose of marginalizing rival companies. Many have argued that Google tweaks its algorithm in ways that push down certain sites in search results that compete for eyeballs, allegedly because these sites have unoriginal content. Disgruntled site owners have cited Google giving Yelp the “TripAdvisor treatment” in support of their accusations. Yelp CEO Jeremy Stoppelman, when questioned about Google Places, remarked: "Google’s position is that we can take ourselves out of its search index if we don’t want them to use our reviews on Places…. But that is not an option for us, and other sites like us – such as TripAdvisor? – as we get a large volume of our traffic via Google search…We just don’t get any value out of our reviews appearing on Google places and haven’t been given an option other than to remove ourselves from search, how to improve this situation."

The "Everyone Wins" Artifice

Google’s competitors have bolstered their campaign against Google’s black box algorithms using the pretext of “consumer welfare” – which is defined almost exclusively in terms of consumers reaping the benefits of a fair marketplace that produces real innovation presumably through merit-based competition.

An Overview of Online Search

Google's sponsored links are produced for businesses interested in advertising and willing to pay Google when users click on their ads. Advertisements are generated by the keywords a user enters into Google's search engine. The amount that Google charges for sponsored links is calculated according to a keyword auction conducted through Google's AdWords? platform. These auctions are automated based on a set of parameters specified by each advertiser, and they occur instantaneously each time a keyword is entered into Google's search engine. An advertiser who places a higher bid for a keyword will receive better placement of its advertisements when a user enters that keyword as part of his search. Additionally, Google employs an innovative quality metric that adjusts the placement and cost to the advertiser of sponsored links based on the links' relevance to the search query and the quality of the underlying webpage. The heart of the dominant theory of Sherman Act, Section 2 liability against Google relates to Google's use of quality scoring in influencing the outcome of its AdWords? auctions. The quality score employs advanced algorithmic technology to maximize the relevance of search results and thus the value of the search engine to users, the likelihood of revenue-producing impressions to advertisers, and revenue to Google. Allegations of anticompetitive conduct surrounding the quality score turn less on its existence--all major search engines use quality scores to improve the relevance of search results—and more on its arcane nature. The specific determinants of quality scores are kept hidden by design and Google has repeatedly justified this opacity with the obvious axioms: (a) No company wants to share its secret formulas with its competitors; (b) by making the ranking formulas too accessible, it would be easier for people to game the system.

What a Transparent Google Might Look Like

Some argue that now is the time for Google to admit that its power in the ecosystem is so great that the company owes it to the rest of the ecosystem to become more transparent in how it ranks sites. One outcome of this arrangement would be the creation of an independent, transparent, quality scoring system. This system would simply rate pages and search results and publish a Klout-like score. The details of the report would be open for everyone to see and scrutinize. Popular dot-com era entrepreneur and blogger Jason Calacanis has also called for Google to provide a calendar of algorithm updates and the informing of the ecosystem of its plans.

The Case for Pandora’s Box

From an antitrust perspective, no business, even a monopolist (assuming that Google is one and Google has refused to deal in lieu of short-term profits), has an antitrust duty to reveal to competitors formulas that it uses to set prices (see http://newscenter.berkeley.edu/2011/06/07/digital-democracy/ - the quest for transparency on the internet in general is a red herring). Moreover, courts are skeptical to intervene on the basis of complaints about product design by rivals because of the presumption that such intervention will chill innovation.

From the User’s Perspective

The problem for Google is not transparency but rather making us feel that it is transparent. Google undoubtedly has some perverse incentives in the ranking process with their own content properties and that alone leaves us wanting for some transparency in the process, although Google owes us nothing. As end users, we are attuned to the belief that an open internet is a desirable internet. It is this openness however, that creates a spam economy and eventually, an unusable web. If anything, an opaque, ever changing algorithm allows Google to be one step ahead of the spammers, even if Google profits from some of the spam (i.e. sponsored links). I acknowledge that the logical outcome of this argument is dangerous, however: we essentially would have to rely on Google to make things more transparent, more open, and more independent (note: the user-controlled, transparent quality scoring system mentioned earlier would admittedly be appealing at this stage of the argument even though it would nibble away at Google’s ability to do as it sees fit with its essential intellectual property).

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