Google is the Daddy

Reading through the new Adwords TOS and thinking of the position that Google occupies in the internet 'market' got me thinking again about how the Big G has far too much control in what 'should' be a democratic trading environment.
I don't wish to incur the wrath of Google since they host my blogs and occasionally send me a few dollars (especially since my account is up to about $110 at the moment...), but equally there is a lot of unjustified moaning aimed at Google which maybe we can also address.
The power of Google lies in the domination of Google as a search engine - there can be no doubt that it is the biggest and best, the problems only come when you start looking at all the other pies that Google has it's fingers in and you can't help but think about possible conflict of interests.
I can't see any problem with the social side of Google, Googlemail, Google Groups, Google Calendar and all the other apps that it has are a great idea complementing it's position as the top search engine provider. Adwords are a natural add-on to the search-engine business, we are beginning to get into conflict-of-interest territory now, but I think Google handles it well, with paid search results being easy to spot and the fact that you can get yourself highly listed without paying shows that the system basically works well.
The nitty-gritty of this post is, as you will have guessed, Adsense... How does that fit into the equation and is it fair??
First off, Adsense is the contextual ads that you can show on a website or blog and be paid by Google when the ads are clicked by your visitors. Naturally there are all sorts of rules about traffic exchange which I (now) understand, and obviously overtly encouraging visitors to click on the adverts is a no-no... I do have an issue however with the way an account is shut down. You hear of many instances of an account having amassed a half-decent amount before the account is closed for whatever reason - personally I have not had an account closed, but can see how this might happen to an innocent party who has been targeted by a competitor (for instance). In these cases, Google takes the spoils ie. the contents of the account. It's in the terms I am sure, but terms must be 'fair' for a contract to be valid. Does Google lose out if someone fraudulently clicks on adverts - Well no, because presumably the advertiser still pays Google per click? I am willing to re-think if someone can show me that they refund the advertiser for clicks identified as fraudulent...
So not only does Google have paid links within the search engine results (yet they reduce PR on a website identified as using paid links...), but they can show text adverts on sites that will also presumably show up in search engines too - all of these adverts are paid links. Here then is the dilema: Paid links are a means of making revenue for Google, yet Google (via Pagerank which is part of the hysteresis used to work out SERP - Search Engine Results Position) punishes any site that appears to accept or trade in paid linking. Once the PR of a site has been reduced (many blogs are now operating with a PR of zero...) there is seemingly no question that Google will continue to use that site for continuing to host it's own adverts (Adsense), and apparently in the case of blogger, they take a cut by rotating the adsense code with their own...
Now don't get me wrong, I am really not that concerned as long as I can continue to get my sites ranked with the keywords that I want for free and can make a bit out of Adsense here and there and can have my blogs hosted for free - I think I am getting a good deal especially when you consider all the site-stats and search-engine help that they provide for free. My concern is that here is a potentially huge monopoly that will surely not be able to sustain this hold on the internet in the longer term otherwise we are going to just end up with the Googlenet.

[follow-up post here]