Google Page Rank Fallout – Possible Legal Action?

I’m so happy that Andy B sent me a digg shout (I take it back – I don’t hate them!) with the shocking news about the latest Google PageRank update, as I would have missed it totally as I’ve been working so hard this week I haven’t read any feeds.

Andy’s latest post (again read via a Digg shout as no time for feeds) collating the more humorous response’s to Google’s PageRank , made me chuckle but it also gave me five mins to try and think about the implications of the move.

From what I can tell, most bloggers seem to be focussing on the impact of reduction in PageRank on SERPS, and it looks like in the majority of cases so far that SERPS haven’t been reduced, just Page Ranks. But, nobody seems to thinking about the impact on Google’s competition. I’m sure there have been hundreds, if not thousands of bloggers for instance who have panicked and removed links sold by Text Link Ads, Linkworth, TNX etc. This will surely have a big impact on Text Link Ads performance in the future, and may even put their whole business model at risk.

The definition of an anti-competitive practices are ‘business or government practices that prevent and/or reduce competition in a market‘ and include:

1. Exclusive dealing, where a retailer or wholesaler is ‘tied’ to purchase from a supplier.
2. Barriers to entry (to an industry) designed to avoid the competition that new entrants would bring
3. Coercive monopoly – all potential competition is barred from entering the market

Surely companies like Text Link Ads could make a case that through Google’s market dominance of the search engine market, there are creating barriers to entry for other companies in the advertising market? I wonder if any of them are currently seeking legal advice? I most certainly would be if I worked there, even if the answer might be that no case could be made.

Nevertheless, I still think that Google will end up paying long-term for flexing its muscles in this manner. I once worked for a company in the UK in a business development role that had similar market dominance in an unregulated market, and I will always remember some early guidance that my boss gave me. He explained that because of our market power we basically could do whatever we wanted in the market, and force other companies that were trying to enter the market to work to our terms. Hence we had a duty to treat all companies fairly and equally so that we would never get a bad ‘big brother’ reputation and so that if we ever did lose our #1 position in the future, people would still want to work with us.

I’ve always tried to take this approach at work, and whether I get a cold call from a 2 man operation or someone from Google, Yahoo, Vodafone, T-Mobile, Universal Music, eBay etc I try to always initially treat them exactly the same and play fair.

I think people will always remember the decisions Google made this week, and I wonder if one day it will come back to haunt them.