Now, a decade-plus later, McNealy’s prophetic words have take on a far more sinister significance than he probably intended. They are increasingly becoming the operating assumption of the digital corporate state. Whether going online, using a PC, smartphone, tablet or digital TV, users can no longer assume they have any privacy. In fact, users should assume they have absolutely no privacy.

McNealy’s and Schmidt’s words both speak to a fundamental change in the definition of privacy. Once upon a time not so long ago, a sealed letter or a personal telephone conversation was considered private, protected communications. Those days are over.

Unless you have the time or the technical know-how to encrypt your digital communications, none of what you transmit – however personal — through a digital wireline or wireless network is “private.” Rather, through the spectacle of post-modern capitalism, the private has become public, the property of the corporation that owns your keystrokes. The digital revolution has morphed the personal into an electronic commodity; the electronic commodity is the exchange currency of an encroaching, 21st-century digital feudalism.

Two complementary forces are driving this change: short-term corporate self-interest and a self-serving security-state. The ordinary American’s traditional privacy rights are giving way to the demands of the militarized corporate state. They are determining America’s digital economy and future.

***

On March 1, Google introduced a new program that collects user data from its 60 services. Google stores “cookies” (i.e., code that compiles a record of an individual’s web browsing history) on a growing number of communications devices, whether a home PC, tablet, smartphone and a growing number of TV sets. These cookies track every Web site a person visits or function s/he uses.

Every time you enter a term into Google’s search engine, check out a video on YouTube, send or receive an email through Gmail (including key words in the message) or even make a call or download information on an Android-based phone, even using a third party’s phone from AT&T or Verizon, your input will be captured, stored and processed by Google. Google users can’t opt out of its data harvesting procedure; the company reports that the new procedure does not apply to Google Wallet, the Chrome browser and Google Books.

Google has been accused of hacking both Apple’s and Microsoft’s operating systems to further its data-capture practice. Jonathan Mayer, a Stanford researcher, discovered that Google could track a person’s usage of Apple’s Safari browser on an iPhone and an iPad, undercutting privacy settings. In addition, Microsoft engineers report finding that Google could bypass the privacy settings on its Internet Explorer browser. Google denies both accusations.

Google insists its data gathering practice is done for the ostensible purpose of better serving its users. It claims that by more precisely tracking a user’s inputs it can more efficiently target-market its advertising offerings. Its sophisticated artificial intelligence software enables it to “predict” individual user’s usage patterns. This is, in all likelihood, partially true as Google is estimated to control close to half of worldwide ad placements of the web.

However, Google’s long-term intentions seem more sinister. In 2010 it was revealed that Google partnered with the CIA in a venture called “Recorded Future.” Google’s vast data archive can be harnessed to meet “security” needs. This is especially troubling in light of a controversial bill being pushed through Congress, the Cyber Intelligence Sharing and Protection Act (CISPA). The act would allow sharing of data between companies like Google and the National Security Agency (NSA) to combat alleged cyber-security threats.

This gets scarier in light of a recent DC Court of Appeals ruling upholding a lower court’s decision blocking a Freedom of Information request from the Electronic Privacy Information Center. EPIC sought to determine the nature of the collaboration between the NSA and Google over Chinese hacking of the company’s site. The claims of national security are increasingly trumping a citizen’s right to know and his/her notion of privacy.

Google is not alone in data harvesting of personal – and once assumed private – information. Other high-tech companies, especially social networking sites like Facebook (with Microsoft’s Bing search engine) and Twitter, are redefining, shrinking, the country’s traditional notions of private communications. Once, not long ago, letters and phone calls were private. Today, once a user inputs a keystroke on their device of choice that is connected to the Internet, whether it be a PC, smartphone, tablet or, increasingly, TV set and accessed either through a wireline or wireless network, that data becomes a “public” commodity, owned by the private corporation that facilitates the communications.

In Europe, the issue of data harvesting of “personal” information is compounded by a growing number of cases involving anti-competitive practices. As of 2012, investigations have gone forward in at least 12 countries and at least nine countries have found Google guilty of violating various anti-trust and anti-privacy laws.

A user surrenders her/his personal or private information when s/he uses a Google-enabled or other communications device. To use these services, people are required to surrender their privacy rights to the new corporate lords of the information economy. In this process, they – we! – are becoming digital serfs.

* * *
Google was founded in 1998 and its 2011 revenues were $37.9 billion; more impressive, its market cap is approximately $200 billion. It ranks 73rd on the Fortune 500 list.

Google’s enormous wealth is derived from its breakthrough search technology and how it revolutionized the advertising business. Its patented, underlying technology, PageRank, transformed Internet search. It offers this service for “free,” and according to ComScore, it accounts for about two-thirds (66.4%) of online searches.

Its smart strategic thinking and wealth has led it to introduce an ever-growing variety of capabilities, services and products. The Google octopus ranges from its search engine to Gmail, from its digitalized library of copyrighted books to the Android OS, from YouTube to its acquisition of Motorola Mobile, and from the build-out of a 1-Gig fiber network in Kansas City to a smart, self-driving car venture.

Google is a postmodern company, on its way to becoming a 21st-century version of the legendary Standard Oil Company. It is as if, a generation ago, GM had business units in cable television, office products and first-generation computer software. Google has the potential of ending the reign of the vertically integrated company. It could become the cyber GE.

Google’s dark side surfaced in 2010 when it offered a joint proposal with Verizon to the FCC on the future of the net neutrality. The Electronic Frontier Foundation warned in no uncertain terms, “Unfortunately, … [the proposal] included some really terrible ideas. It carves out exemptions from neutrality requirements for so-called ‘unlawful’ content, for wireless services, and for very vaguely-defined ‘additional online services.’ … As many, many, many have already pointed out, these exemptions threaten to completely undermine the stated goal of neutrality.”

It must be noted that Google joined other Internet companies, most notably Wikipedia, in opposing the poorly conceived MPAA-backed anti-piracy bills; the House’s SOPA and Senate’s Protect IP Act. Most dramatically, Google blacked out its site.

* * *

Not long ago, the word “google” morphed from a noun, the name of a company, to a verb that denoted search. Now, the name for an ever-growing octopus of a company has come to signify a mounting threat to competition and online personal privacy.

Last month, the Federal Communications Commission imposed a modest $25,000 fine on the company for “delaying its [FCC’s] search for and production of responsive emails and other communications, by failing to identify employees, and by withholding verification of the completeness and accuracy of its submissions.”  Congressman Ed Markey (D-MA) complained that “[t]his fine is a mere slap on the wrist for Google.”

EPIC filed a suit in federal court arguing that the Federal Trade Commission (FTC) had failed to enforce an earlier Consent Order against Google to ensure personal online privacy. EPIC contended that Google’s new program to capture and integrate all the personal information it gathers from its various services, including its search engine, Gmail, YouTube and Android-based phones, is a threat to personal privacy. The DC court dismissed the suit.

In the face of these developments, Senator Richard Blumenthal (D-CT) warned that “Google’s interception and collection of private wireless data potentially violates the Wiretap Act or other federal statutes, and I believe the Justice Department and state attorneys general should fully investigate this matter.” In a separate matter, a U.S. federal court recently held that unencrypted wireless network communications are not exempt from the protections of the Wiretap Act. Calls for a more comprehensive investigation heated up.

Following the dismissal of EPIC’s challenge, the FTC retained Beth Wilkinson, a high-powered outside counsel, to oversee a possible anti-trust prosecution of the company. She is a former Justice Department prosecutor who played a lead role in the conviction of the Oklahoma City bomber Timothy McVeigh. She is only the second outside litigator retained by the FTC to oversee an investigation. As the New York Times wrote, “The case has the potential to be the biggest showdown between regulators and Silicon Valley since the government took on Microsoft 14 years ago.”

At the heart of the FCC’s (and likely the FTC’s) inquiry into Google is the Street View project. Begun in 2007, Street View uses digital cameras to collect and display street-level images. Unknown at the time, Google was also employing Wi-Fi receivers concealed in the Street View vehicles to capture what is known as MAC (Media Access Control) addresses and SSIDs (i.e., user-assigned network ID name) linked to the location. In addition, it intercepted and stored Wi-Fi transmission data, including email passwords and email content.

The company originally downplayed its collection activities, minimizing the scope of its data harvesting and blaming it on a rogue engineer. However, in the face of widespread protests, Google was forced to end the illegal collection of Wi-Fi information.

The standoff between the FCC and Google involved the company’s apparent violation of privacy and wiretapping provisions of the 1996 Communications Act. The FCC’s decision to give Google a pass was based on a technicality, that the Act did not cover Wi-Fi technology. Nevertheless, the FCC report revealed that Google’s data collection was not the act of a rogue engineer but likely a corporate program. It found that Google had intercepted the private communications of millions of Wi-Fi users and that it “clearly infringes on consumer privacy.”

The FTC’s current inquiry into Google is not the first showdown between the two entities. In 2011, the FTC brought a suit against Google Buzz, the company’s first social networking effort, for violating its stated privacy policies and for using deceptive tactics. The FTC charged Google with using information collected from Gmail users to grow its then recently established Buzz service. Google’s settlement involved not only paying an $8.5 million fine, but agreeing to undergo regular audits of its privacy practices for the next 20 years. (Under the terms of the agreement, the FTC can fine Google up to $16,000 per violation per day.)

As the pressure mounts on Google in the U.S., a growing chorus of challenges is being raised in Europe and in other countries, including over alleged anti-trust violations, and Google’s new integrated data harvesting practice. EU Justice Commissioner Viviane Reding called it an “Orwellian surveillance apparatus,” adding, “My impression is that Google has trampled European data-protection legislation.”

France’s privacy watchdog CNIL determined, “Preliminary findings show that Google’s new policy fails to meet the requirements of the European Data Protection Directive (95/46/CE) regarding the information that must be provided to data subjects.” It urged a “pause” in the rollout of Google’s new data harvesting program.

Other investigations of Google’s new data-gathering practice are underway in Argentina and South Korea.

David Rosen writes the blog, Media Current, for Filmmaker and regularly contributes to CounterPunch and the Brooklyn Rail; he can be reached at drosennyc@verizon.net.

When asked about this, Google argued that its provisions merely “enable us to give you the services you want – so if you decide to share a document with someone, or open it on a different device, you can.”

As reassuring as that seems, though, it’s not that simple when considered in a larger context.

In the last few years, major technology companies have become integral to interpersonal communication and information management. At the same time, many of these firms have tweaked user agreements in exactly the way Google has, helping the industry legally position itself for a mass intellectual property grab. That means whether you are using a photo-sharing site or a Web-based email account, you may have signed off on letting one of these corporations do whatever it wants with your data. As evidence of that reality, Facebook in 2009 let advertisers employ users’ uploaded photos to market products without users’ explicit approval.

Such a use unto itself may not offend you, but remember – that’s only what you can see. Indeed, nobody has any comprehensive idea of how tech companies are using these provisions in their secret business-to-business dealings. If they are already using your photos, what else are they doing behind their firewall? Are they selling your data? Are they mining your cloud files looking to preemptively appropriate the next great innovations? Nobody knows … well, except the tech companies themselves.

It’s easy to ignore such concerns by believing that the scope of a mass data mining operation is prohibitively large. But that’s not true. With the government already mining data from millions of Americans’ phone records in the name of fighting terrorism, it’s perfectly reasonable to believe that multibillion-dollar corporations can do the same.

Of course, companies providing these services assert that intellectual property is a substitute currency for cash. As the logic goes, even though online services cost money to create and maintain, you the user don’t have to pay actual cash for them because you are already paying in information about yourself, which technology companies then monetize.

That may seem at first like a good deal. But amid companies’ ever-intensifying pursuit of profit, the monetization process opens up the possibility for serious shenanigans. And here’s the worst part: If a company ultimately pilfers inventions or trade secrets or anything else from users, it will already be too late. Because we so quickly hit “agree” when we originally opened our accounts, we will have signed away any claim to what we believed to be ours and ours alone.

It’s a change that raises a number of bigger questions: Will automation completely replace human translation? Are we about to see the end of multilingualism? According to David Bellos, a professor of French and comparative literature at Princeton and Booker Prize-winning translator, that’s not likely to happen anytime soon. In his new book, “Is That a Fish in Your Ear?,” about process and social meaning of translation, he persuasively argues that human translators are as crucial as ever. At a time when the world seems more globalized and small than ever, they play a central role helping us understand each other and bring art to a broader audience.

Salon spoke to Bellos over the phone about the future of English, the rise of the auto-translator and America’s cultural aversion to multilingualism.

Why is Google Translate succeeding where other automated translators failed?

In terms of user experience I think it’s a quantum leap in machine translation. In terms of its intellectual presuppositions it’s not a quantum leap, it’s just a very clever engineering solution. It uses a statistical method to find the most probably match for an expression — it doesn’t try to understand it or strip it down into vocabulary, syntax and meaning. It just looks for matches using a probabilistic computational device.

Obviously Google didn’t invent all of that by itself — statistical machine-based translation had sort of been invented in the 1980s, and there had been small systems using it in the 1990s — but now Google has the Web to work with. There are now millions of pages in many languages that Google’s huge service can scour in an instant. And it’s also crowd based, in that when it gives you a result it invites you to present a better translation. And people do. They are pleased to show a machine where it went wrong, so the database gets more and more refined. But one thing people must remember is that Google Translate is not conceivable outside of a world in which millions of humans are producing and translating these texts.

Do you think the rise of Google Translate — and astonishing iPhone translation apps like Word Lens, which allows you to automatically translate signs on your phone — means people are going to stop learning other languages?

That could happen in the way the generalization of the pocket calculator means my grandchildren don’t know how to do arithmetic. That would be a sad result. Obviously it removes the motivation for language learning for all sorts of minor, everyday trivial tasks. But I think that people in positions of responsibility in the educational system and in schools and public life should know full well that the existence of Google Translate in no way reduces the educational need and the utility of acquiring foreign languages. We should struggle ever harder so that some of the next generation have a proper understanding of a variety of other languages — not just French, but Chinese, Japanese or Arabic.

There are about 8,000 languages in the world, but only a small number of them are spoken by large numbers of people across borders. You call these languages “vehicular.” What are they?

A vehicular language is a language that is used as a vehicle of communication between people who are not native speakers of it. So when a Marathi-speaking citizen of Mumbai phones a Chinese business contact working in Hong Kong, they speak English to communicate. English is the vehicular language. There are maybe 80 such languages that play that role. If you know somewhere between 9 and 15 of the vehicular languages of the world you’ve got a means of communication with something like 95 percent of the world’s population.

When a language does become vehicular, it escapes the control of the home country completely and starts to absorb and hybridize. English is the most obvious example. It’s a very hybrid language — it’s got bits of Danish and Celtic and words from Bengali and obviously lots of words from French and Latin and Greek. It’s like a vacuum sweeper, so the vehicular language acquires that central role and does in a sense become marginally more recognizable to speakers of any other language simply because it hybridizes bits of them.

So why did languages like English and German catch on while others didn’t? Is it because they were imperial powers?

I think the imperial answer is too easy. Look, the Dutch had an empire at least as far flung and opulent as the British empire 300 years ago, but Dutch has not become a vehicular language of any importance in the world today. The Portuguese are similar.

In linguistic terms, there is absolutely no difference between a language that’s become vehicular and one spoken by a small tribe in Papua New Guinea. All languages are equal and can be made to serve whatever purposes their speakers want to achieve with them. The old pre-1920s view that the hierarchy of language reflects something inherent in the languages themselves is really not true, and you can’t map the complexity of the language onto the complexity of the society that uses it. There’s nothing inherently better about English than about Chinese or Russian or whatever.

The role of English in the world at present is without historical precedent. Some people like Nicholas Ostler foresee the English language splitting up into a myriad of dialects that will bit by bit become mutually incomprehensible, but I think the conservative forces of print will slow that down very substantially. God knows how long that will take.

In the book you also point out that Eskimos don’t actually have 30 words for snow, which I had actually bought into. And I didn’t realize that myth had such racist connotations.

It was first debunked by Geoffrey Pullum, and it’s really significant that this factoid became lodged in the popular consciousness without people realizing the baggage it brings with it. It suggests that “Eskimo” is a primitive language, because, unlike languages like English, it has all these concrete terms for snow but not the abstract or general term [i.e. "snow"]. There’s this idea that languages with a general term are able to cope with the world in a more abstract or sophisticated way. It’s a very 19th-century colonialist view, which was a time when people were trying to figure out why English or French were better than Swahili or Eskimo. And on top of that, Eskimo is not a language. There are many languages of the Inuit peoples. It’s like saying there’s a language called “European.”

The idea of speaking multiple languages is much more celebrated in Europe than it is in the U.S. Why do you think that Americans are so much less interested in being multilingual?

I think one needs to be a bit more subtle about it than that. One out of every five Americans is functionally bilingual — either because they are recent immigrants or they inherited it from their family or because they learned it at school or from residence abroad. That’s quite a high percentage for an English-speaking country. America isn’t as monolingual as people say it is — but it is culturally monolingual.

The motivation of most immigrant groups when they get here is to naturalize and assimilate as soon as possible. If they do carry on speaking Italian or Hungarian at home, they don’t especially want it to be known because they want to be new Americans. That’s a special emotional and political ideology that’s particular to the U.S. In Europe, where people move across borders, that kind of aspiration — to pass yourself off as French, for example  is first of all unachievable because the French won’t let you (and the British even less). Multilingualism is by no means absent from the U.S., but it configures differently in American cultural values.

Canada, where I’m from, has an official bilingual policy — so the packaging on all products, from potato chips to diapers, has to be in both French and English. We obviously have our own historical and political reasons for that, but what’s interesting is that many parts of America are now also becoming bilingual, albeit in a very chaotic, unlegislated way. In New York subways, for example, you’ll see lots of ads in Spanish with no English translation, and it’s completely unremarkable at this point.

I think it says a lot about the past of America. If you look outside of the big cities of the Northeast, the real areas of creeping bilingualism are precisely the areas that used to belong to the Spanish empire: California, New Mexico, Arizona, Louisiana, Florida. So it’s kind of a reversion. I’m not a real academic sociolinguist, but I understand from colleagues that some people are skeptical about the next generation maintaining their Spanish. The generations growing up in the U.S. and getting an elementary U.S. education may, like the grandchildren of Italian immigrants, just drop that language in the next 20 to 30 years. Or maybe for political reasons they will assert their identities as Spanish-speaking American and we’ll move towards something more like the Canadian model. All these things are open to negotiation.

In some parts of the world, foreign movies are dubbed over instead of subtitled. I remember watching dubbed TV shows and movies when I was a kid, and even then I thought it was very strange. In the U.S., we clearly prefer subtitles.

Even among the countries of the European Union, there are very different traditions. When sound came into movies in the 1930s and the industry de-internationalized, different countries established traditions and expectations that remained quite firmly fixed. France, for example, dubs its foreign films — except for films considered as art — while in England and America that’s unheard of. The way America treats subtitles says a lot. In Germany and France and Italy, the people who produce the local versions of foreign movies, whether dubbing or subtitling, are respected professionals with a public profile. Here they are a completely obscure network of guys who do it for a few dollars an hour in a garret at night. And I’m hardly exaggerating actually. And these are some of the most difficult operations you can do with language.

Does that suggest that Americans just don’t care about translation as an art form?

Twenty years ago, if you were an academic and also a translator you never put your translations on your C.V. because they would count against you when it came to promotion time. Translation was seen as second-rate. But I think that is changing. I think there is much more respect now for translators in the academy and elsewhere.

Far more titles are translated from English than into English every year. What does that say about the relative status of English-speaking culture in the world?

There is a huge asymmetry. Somewhere around 3 or 4 percent of books appearing in the U.S. each year are of foreign origin, whereas in other developed book cultures, like France or Germany, it ranges from 15 to 20 percent. The English language book industry is vastly bigger than any other, so 4 percent of all the books published in English is actually quite a large number of books.

It’s partly because English is written by so many different cultures around the world — South Africans, Australians, and so forth — so the English book world is already diverse. But the fundamental reason is that publishers remain convinced that translated books are a hard sell and that they don’t have much of a public. They don’t really believe in translated books as way of making money. It’s true that very few New York Times bestsellers were originally written in another language, but these are to some degree self-fulfilling prophecies. It’s something I really want to carry on struggling against. Publishers should be more courageous and less enclosed in the received idea that translation is expensive and needs a subsidy and is never going to appeal to anybody.

And there’s the idea that a translation of a book is just a degraded copy of the original.

That argument is self-contradictory. There are good translations and less good translations, but the general argument that a translation is less good than the original is impossible to support with any kind of intellectual self-respect. To put it in a nutshell: How do you know?

Schmidt spent much of his time before the subcommittee trying to dispel the belief that Google’s search dominance makes it, as Utah Republican Sen. Mike Lee said with some hostility, “the biggest kingmaker on Earth.” This was Google’s come-to-Congress moment, and the Senate wasn’t going to waste it. Five years ago, Google was just introducing to Washington its first full-time lobbying staffer. But Google is now a major player in Washington, and, as Lee put it, antitrust violations or no, it warranted attention. Initially Google Inc. offered to send the company’s chief legal office David Drummond to answer its questions. The senators demanded either Schmidt or CEO Larry Page.

Making the best of his time in the hot seat, Schmidt tried to portray yesterday’s session as a rite of passage. Another tech giant memorably went through it (read Microsoft’s ’90s antitrust battle), said Schmidt as he opened his testimony, “today it’s Google’s turn in the spotlight.” That approach is a gamble, and it might prove to be an unwise one. Washington dislikes power that it doesn’t understand. It doesn’t understand much about technology. And, judging from yesterday’s questioning, Google’s vaunted search-result algorithms are little understood on the Hill, and the source of much annoyance.

“I don’t know whether you call this a separate algorithm, or whether you’ve reversed engineered an algorithm,” said Lee, displaying charts showing Google results on shopping-related searches. “But either way, you’ve cooked it, so that you’re always third.”

“Senator, may I simply say,” said a visibly annoyed Schmidt, “I can assure you that we’ve not cooked anything.”

Still, Schmidt had little clarity on how Google works to share with the befuddled senators. Sen. Richard Blumenthal, Democrat from Connecticut, got some ribbing from hearing-watchers on Twitter for an analogy attempting to make sense of Google’s power and standing in the digital space, but it actually wasn’t a bad attempt. “The racetrack,” said Blumenthal, grasping. “You run the racetrack, you own the racetrack. And for a long time you had no horses. Now, you have horses, and you have control over where the horses are placed.” The kicker: “And your horses seem to be winning.”

Schmidt quickly assured the senator that he completely disagreed with that metaphor. He offered another.

“I prefer to think of the Internet as the platform. And you can think of Google as GPS. It’s a way of getting there.” It’s a free Internet, argued Schmidt. Google is just one — or a few — of its component parts.

Blumenthal’s horse track analogy might have been clumsy, but Schmidt’s GPS one is laughable. Google isn’t like any old thing on the Internet. In part, that’s because it has done what it does very well over the years, turning itself into a verb along the way. But it’s also because, unlike other stops on the Internet, Google is a networked creature that depends on a web of content and services to make it worthwhile. Google is worth literally nothing if it’s not networked to the rest of the Internet. Its value comes from its links, and how it engineers those linkages is what has captured Washington’s unwanted attention.

Schmidt argued before the subcommittee that Google’s core mission is to serve up the best results for its customers, not to keep other websites and website owners happy. And when it comes to producing the ideal online experience for that audience, what it offers up is often, today, its own products, whether that’s Google Shopping, Google Maps, Google Places, Google Books, Google AdSense ads, Google AdWords ads, Gmail and, now, Google Plus. (Opening up Google+ to the public on Monday, Google rolled out an animated blue arrow that stretches from the Google.com search box to the social-networking platform’s tab on the site’s menu bar. Subtle it is not.)

Even Android, its mobile operating system, was purchased in 2005 because the company desperately wanted a way to serve up Google tools on cellphones in the same way it has on computers where, according to Larry Page as quoted in Ken Auletta’s 2010 book, “Googled: The End of the World as We Know It,” “we’ve been able to make software that basically is able to run everything and works for people pretty well.” And the whole thing is powered by Google’s massive, global hardware infrastructure. It’s a triumph not only of engineering, but of will. And Schmidt it trying to dismiss this history-making enterprise as something any ol’ Web engineer or two could pull off.

The context for yesterday’s hearing is the antitrust investigation that the U.S. Federal Trade Commission launched, in June, and following up on a similar inquiry launched by the European Commission last November. The parameters of the domestic case aren’t fully known, but Google has pushed back against what it assumes the complaints to be, on the company’s blog.

“Since the beginning, we have been guided by the idea that, if we focus on the user, all else will follow,” writes Amit Singhal, head of Google’s search ranking team, “No matter what you’re looking for—buying a movie ticket, finding the best burger nearby, or watching a royal wedding—we want to get you the information you want as quickly as possible. Sometimes the best result is a link to another website. Other times it’s a news article, sports score, stock quote, a video or a map. Instant answers. New sources of knowledge. Powerful tools—all for free.”

After Schmidt spoke at Wednesday’s hearing, several competitors offered their complaints with that best-results-at-all-costs approach. Yelp argued in its written testimony that Google is poaching its reviews and details on restaurants, stores and more to power their own search results. And the product comparison site Nextag complained that Google was giving preference to Google Shopping.

During his hour-plus testimony, Schmidt made several tiny stumbles. He argued, contrary to the evidence, that Google Places isn’t an Android app. But the one that drew the most ire was his maintaining of the position that the chairman and longtime CEO of Google Inc. really knew very little about how Google comes to the decisions it makes over how it ranks search results or where it places Web content on its pages, sites and phone platforms.

“That really bothers me,” said Minnesota Democrat Al Franken, “because that’s the crux of it, isn’t it? And you don’t really know. We’re trying to have a hearing here, about whether you favor your own stuff, and you’re asked that question, and you admittedly don’t know the answer.”

At the same time, members of Congress like Google. They like that they can find things online without the benefit of an assistant. They like funny cat videos on YouTube. They like the money the company has to spend, and, come election time, they like Google ads a great deal. They like that someone in Silicon Valley — and a reasonably sexy giant of a company at that — is starting to pay them a little bit of attention. New York Sen. Chuck Schumer spent the bulk of his opening statement discussing his informal survey of just how many New York tech companies love them some Google (four-fifths of them, as it turns out). Then he dropped the hint that perhaps Google Inc. would like to bestow upon the Empire State some of that community broadband fiber they’ve seen fit to build out elsewhere in the country.

Monopoly is a legal distinction, said Schmidt under questioning from subcommittee Chairman Herb Kohl, Democrat of Wisconsin, though he allowed that when it comes to search, “we’re within that area.” That sort of talk incensed Washington anti-trust lawyer Thomas Barnett, who testified after Schmidt. “Google won’t event admit to reality,” said Barnett, referencing the company’s official public positions. “Undoubtedly, Google has monopoly power in search and paid advertising. You don’t have to take my word for it. You all heard it.”

“Monopolistic” is indeed a legal determination, and the FTC has just begun the process of determining whether, in its judgment, Google has abused its overwhelming market share enough to deserve it. But when it comes to convincing Congress, Schmidt passed on an opportunity to explain that as much as Google was a disruptive force when it came to the evolution of the Internet, it’s a disruptive force when it comes to how we understand dominance in a networked world. Google’s success inside the Beltway — avoiding an antitrust lawsuit, as well as escaping Congress’ glare — may depend upon the company developing a convincing case about how power works in the Internet age, and then selling Washington on the result.

My first reaction to that title was a semi-serious, Wait, why is that an either-or question? Can’t they do both? It is something of a stretch to question whether Google is “serving consumers.” Google’s success is built on the bedrock of giving consumers exactly what they want, better and faster than anyone else. And for free! That’s a pretty good deal, and I and millions of others are happy to take advantage of it multiple times a day. I personally made my peace long ago with the fact that Google knows an uncomfortably large amount of information about how I live my life via the combined power of Gmail, Search, Google Reader, Google+ and other services. My bottom line? The price — zero — is right.

In the past, the fact that Google has refrained from digging its pound of flesh — à la Microsoft — out of my hide has encouraged me to take a skeptical stance about the merits of Google antitrust enforcement. Back in the good old days of the epic antitrust showdown between the Clinton Justice Department and Microsoft, my feelings were different, even though, superficially, the circumstances seem pretty similar. In the ’90s, a hugely profitable tech company was obviously leveraging its control over the PC operating system to crush competitors and promote its own products. Today, a hugely profitable tech company is suspected of leveraging its dominant share of the search market to do exactly the same thing.

But we would all do well to recall that after President Bush took office, the Justice Department dropped its suit. Microsoft ended up losing its unrivaled supremacy over the tech ecology, not through the pressure of regulators, but because competitors like Apple made better products and upstarts like Google took advantage of the opportunities presented by the Internet to grab consumer attention. It’s tough to stay at the top in the age of the Internet. Remember Friendster? MySpace? Google is obviously self-serving when it notes, in its perhaps overly defensive Guide to the Senate Judiciary Hearing, that users “can switch with just one click,” but that doesn’t mean it isn’t true. Facebook, alone, is a bigger threat to Google every single day than any single company posed to Microsoft in its heyday.

Nonetheless, constant scrutiny and pressure from regulators is not out of place. The online search marketplace is continuing to evolve quickly, providing new opportunities for mischief. To take just one recent example, just two days before Schmidt’s testimony, Google announced a new product: Google Wallet. It will be interesting to see whether any senators quiz Schmidt on the provocative implications of this newest offering. Because if you think it through, nothing Google has done recently makes it easier to understand how Google can use its power over search to steer consumer behavior.

Google Wallet is the latest entry in a market space crowded with big financial institutions, tiny start-ups and great technological ferment. The goal is to make it easy to use your phone to pay for products at the retail establishment of your choice. No more labored effort swiping a plastic card. Just click — and cha-ching.

Google Wallet won’t be an instantaneous 800-pound gorilla. The service will only be available on the Sprint Nexus S and a limited number of retailers. But even if it might seem ridiculous to think that what the modern capitalist world needs right now is a way to make purchasing stuff even easier, there is still good reason to assume that sooner or later most smartphones will offer mobile payment services. Consumers might not crave the option — but advertisers and search providers certainly do.

SearchEngineLand’s Greg Sterling theorizes that mobile payment systems open up the possibility of creating a “closed loop” that stretches from online-intent-to-buy to advertisement to offline-purchase. That’s kind of a big deal.

Here’s how it could work. Suppose you are wandering San Francisco’s Chinatown looking for a Buddha pendant. You pull out your Android smartphone and enter “Buddha pendant” in the Google query box. Your GPS-enabled phone knows exactly where you are, and Google Maps pops up with a list of nearby retail establishments that offer more Buddhas than you can shake a joss stick at. Even better, a text ad appears at the top of your screen offering you a discount if you purchase your Buddha at the Buddhas-R-Us around the corner. A couple minutes later, you are waving your Google Wallet at a barcoded Avalokiteshvara and clicking the cha-ching button.

As a consumer, I might find this experience pretty neat. As an advertiser, I’d be extraordinarily happy with the ability to exquisitely judge the impact of targeted ads on offline consumer activity. But the potential for trouble is also obviously great. Whose ads get served and what retail outlets get promoted? What if the best selection of cheap Buddha pendants is at some tiny outlet that doesn’t steer any advertising dollars to Google at all?

The integration of Google-owned services into Google search results has clearly hurt some competitors of Google. Google Maps offers a terrific example. When Google started including a Google Maps thumbnail at the top of its search results for relevant queries, Yahoo’s MapQuest service saw its traffic crash. MapQuest is now a has-been.

The story is complicated by the fact that, in my view, at least, Google Maps was a far superior product to MapQuest. So I was delighted when Google started integrating Google Maps into its search results. It made my life better, even as it made Yahoo’s worse. Consumers were served and competitors were threatened.

But the closer the lines get drawn between search-advertisement-and-purchase, the more opportunities there will be for crossing the line inappropriately. There are enough blemishes on Google’s record to make any unthinking trust in its “Don’t Be Evil” mantra more than a little unwise. Will it serve me if Yelp and Kayak and Shopzilla all go the way of MapQuest, unable to compete with Google’s dominance over mobile search? Probably not. 

Break up Google? Not necessary, yet. But watch ‘em like a hawk? Absolutely.