Imagine that your home has been burgled.

The police catch the robber, there is a trial.

What is the appropriate punishment? Return of your possessions? Jail time? Damages?

But instead the outcome is that a judge agrees to allow the robber to avoid jail time or penalties, he says it’s ok for the robber to use the stolen stuff for as long as he wants provided he pays his victims a one-time payment fee for it.

And if he can’t track down the victim, he can keep and use their stuff in any way that he sees fit.

Would such a punishment seem fair or appropriate to you?

This is how Forbes describes the ongoing litigation surrounding the deal struck between publishers, some author groups and Google, after the technology giant was sued for the illegal reproduction of copyright materials.

The deal has opened a can of worms – and you can look forward to a bitter, long battle – and not necessarily because competitors have commercial interests to protect – but because it raises an even more important question: how much market power is too much market power?

The agreement Google struck provides it with monopoly rights to hundreds of years of printed works, which it will make available to the public–individuals, public libraries and others–for a fee or subscription.

It could also sell electronic copies of books. As Forbes noted, this is not a bad settlement for a company that was sued for violating copyrights.

Apart from the usual suspects with raised eyebrows, that is the Department of Justice, various US state attorneys general and the European Union’s competition commission, this deal has also galvanised three powerful enemies. After all, it’s an old adage but my enemy’s enemy is my friend.

According to BBC news, technology heavyweights, Amazon, Microsoft and Yahoo will all sign up to the Open Book Alliance being spearheaded by the non-profit Internet Archive, a long-time opponent of Google’s library ambitions. It too is in the business of scanning books, a task which Google now intends to undertake, and has digitised over half a million of them to date. All are available free.

So, How Much Power Is Too Much Power?

While the argy-bargy takes place in courtrooms, let’s take a look at a fraction of the things that Google knows today.

• It knows the search behaviour of the vast majority of Internet users in the western world. (It performs around 80% of Australia’s search.) It can even roll out personalised search results specific to your individual preferences simply because it knows your behaviour so intimately.
• It can determine the success or failure of your website business because it creates its own algorithm, which it keeps secret, which governs how your website will perform in search engines. If it decides you’re not important, you don’t rank, regardless of whether your livelihood depends on it. And if you want to call someone to talk it over? Well, you can’t. You can only ring to talk about ads.
• Got something you’re embarassed about in your back yard? You’d better clean up your act before Google Earth swings by, records it and puts it on public display for all to see, whether you like it or not. If Google decides to streetview your neighbourhood, anyone can see what your house looks like, what colour fence you have, even what car is parked in the driveway.
• Many website administrators use Google Analytics as a preferred website reporting tool. This gives Google detailed information about who is visiting your website, how long they are staying there, which pages interest them, where they come from – the sort of information that is extremely useful to an advertising company that wishes to fine-tine, for example, an advertising pay-per-click program.
• If, like me, you decide to use Google Chrome, a lovely little browser from Google, you’ve just offered the corporation another freebie insight into your life. They now know where you go outside of search, what you like and how often you like to go there, the sort of website that you might favorite as an online destination.

And this is just the tip of the iceberg.

Set up a Google account – then you can sign up to YouTube, gmail and other services that all feed information about you to the hungry Google databases. Set up some online goals in your Google Analytics and reveal your ambitions. And its tentacles have no end in sight. Think you might be in the market for a mortgage, for instance? Google might be able to help there too.

How does Google use that information about you? How does it use information about me? I don’t know for sure, my assumption is that it has something to do with refining advertising. But Silicon Valley has long been concerned about Google’s depth of information about individuals – and we can look forward to more people joining the chorus, asking the questions, airing their concerns, including those that reside in the corridors of power in governments around the world.

Businessweek covered it a few years back. The New York Times wrote more recently about it while a couple of inventive journalists decided to bring their crystal ball to life in film:

Consumer Watchdog, an advocacy group obtained a confidential, proprietary Google presentation for lawmakers that offers Google’s commitment to transparency that, according to the advocacy group, skirts tough questions about its secretive user data tracking, storage and sharing policies. You can view its annotated version here. It’s quite a read.

The watchdog alleges that Google increasingly spies on what consumers do online, including what web sites they visit; creates dossiers on users’ online behavior without their prior permission; then harvests this private information to sell hundreds of millions of dollars in advertising.

Google is not the little start-up with the do no evil chant – because it’s not a little start-up anymore.  Of course, its behaviour may still be beyond reproach, but ultimately how the company is perceived will be left to the public and regulators to decide.

And it will be left to people like you and I to ask ourselves, how much does Google know about each of us and are we comfortable that one company has that level of insight into our individual lives? It has the power to shape our culture because it shows us what it wants us to see.

Even today, it picks and chooses what products and services we see thus buy online. It decides what’s important and what you should care about. It decides what retailers will be returned on the front page of its results.

Frankly, it might not be misbehaving, and I’m not accusing it of inappropriate behavior, I love the Google brand, but the potential for market abuse is significant. Unlike any other search engine, Google is able to leverage its search platform to the majority of Internet search traffic.

It can, if it chooses, present book buyers with its own offer as opposed to a competing offer, such as Amazon. After all, Google owns the Google index so what it displays is entirely at its discretion. If it decides to chuck you off the index, it can. If you want to be reinstated, well that’s up to Google to decide your fate.

Its ability to do this – and what its commercial ambitions might mean for businesses that today operate in entirely different product categories to search and advertising – is starting to make me feel nervous.

Where does it stop? What industry will be next? How far will the tentacles reach?

How much market power is too much market power?

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