The U.S. Justice Department last week hired a high-powered lawyer to investigate the Google – Yahoo! search advertising deal, which in itself is a strong signal that the Government will move to block the transaction on anti-trust grounds. Lawyers, politicians, pundits, journalists – start your word processors: we' re about to enter a long period of complicated argumentation about whether Google is a monopoly, whether it's abusing its market power, and if it is, what should be done about it.

American anti-trust law is complicated in its ambiguity, and as the long government pursuit of Microsoft demonstrated, it can be a frustratingly clumsy instrument. Microsoft ultimately lost the key points of the case and definitely suffered from the protracted legal battle, but the legal sanctions themselves were little more than a slap on the wrist. It was Google, not the Government, that ultimately changed the competitive dynamics of the software industry.

The questions surrounding Google's business practices and market power promise to be even more complicated.

The proximate issue, whether the search advertising deal between Google and Yahoo! – pursued by Yahoo! largely to fend off a Microsoft takeover – is relatively straightforward. If you assume that search-based advertising (think Google Adwords) is a market distinct from other types of advertising, then the deal raises obvious anti-trust problems. Google has an estimated 70 per cent of this market and Yahoo! another 20 per cent, so the combination will clearly mean near-monopoly position for Google and less competition. That's why organisations representing major advertisers have come out against the deal.

On the other hand, the reason Yahoo! finds the deal interesting is because Google's search marketing services are vastly superior to its own. Here at NewWest.Net, we did an experiment a while back comparing the Google Adsense service, in which Google places keyword ads on third-party sites and shares the revenue with the publisher, with the comparable offering from Yahoo!. It wasn't even close.

Given the quality gap, one could question whether Yahoo! today is even a legitimate alternative for many advertisers. In theory, if the deal is blocked, Yahoo! would be incented to improve its own services, but that doesn't mean it will be able to do so.

To my mind, though, the larger anti-trust issues around Google have less to do with its accumulating a greater share in specific markets, and more to do with Google’s overall approach to its dominance of the search economy. It is not, in fact, illegal to be a monopoly. If you have such power, however, you are obliged to act differently, and not use that power to enhance your position in adjacent markets, or arbitrarily abuse customers or competitors.

This was the point Microsoft never came to grips with; the company insisted that Windows was not a monopoly, and therefore it had no special obligations when it came to things like requiring that PC manufacturers favour its browser over Netscape's.

Google, of course, can make plenty of arguments about how there is lots of competition in all its businesses, with Microsoft and Yahoo! and Amazon and many other big players doing some of what it does. It can insist that everything it does is for the benefit of consumers, and if that hurts competitors sometimes, well, too bad. It can, with the arrogance that comes with so much success, maintain that it knows what it is doing, thank you very much, and ignorant government regulators should just butt out.

But that approach – the Bill Gates approach – would be a huge error.

For one thing, Google more than most businesses, depends on trust (that "don't be evil" thing didn't come out of nowhere). It has access to immense amounts of private information about both businesses and individuals. Many of its strategies rely on people and companies trusting it with even more information: ‘store all your personal and corporate documents and communications here.’

Google functions as a marketplace and operating system in many areas of the internet ecosystem, and as such it needs to be perceived as a trusted broker. Google ranks our websites, which has a big impact on our traffic levels, and I need to be confident that, say, those rankings aren't influenced by how much business I'm doing with Adsense. Being a trusted broker requires transparency, and Google could use a lot more of that in many areas.

As a large user of Google services both personally and professionally, my first instinct is to hope that there continue to be lots of alternatives out there; competition is the best way to keep companies honest. On the other hand, Google offers such great services – sometimes in areas where it is actually preferable to have a single provider – that I tend to think the bigger issue is how the company behaves. This will be an interesting test.

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Jonathan Weber is the founder and editor in chief of NewWest.Net, a regional news service focused on the Rocky Mountain West in the United States. He was previously the co-founder and editor in chief of the Industry Standard