From Praise To Outrage: Reactions To Google’s Antitrust Settlement

The post-mortem analysis of Google’s antitrust settlement happened very quickly yesterday and this morning with some journalists and analysts concluding that factors other than the law were responsible behind the scenes. For example, Politico asserts it was largely “a calculated and expensive charm offensive” (lobbying) that drove the outcome yesterday.

An even more absurd analysis argues that Google is essential to US foreign policy and thus the FTC let the company off the hook.

While Google lobbying may have had an impact, in reality the the facts and the law weren’t on the FTC’s side on the question of Google’s alleged “search bias.” There was little or no documented consumer harm. The harm claimed by Google competitors was all speculative: potential harm to their businesses which was supposed to be a proxy for consumer harm. But as FTC Chair Jon Leibowitz said yesterday, “The law protects competition not competitors.”

The company reactions to yesterday’s settlement announcement came swiftly and ran the gamut from support and approval to anger, even sadness. Below is a sampling of the full spectrum of those reactions.

Microsoft: FTC Result “Weak and Unusual”

Picking apart each aspect of the settlement, Microsoft VP & Deputy General Counsel Dave Heiner said the following:

The FTC’s overall resolution of this matter is weak and—frankly—unusual. We are concerned that the FTC may not have obtained adequate relief even on the few subjects that Google has agreed to address . . .

[T]here appears to be no reason, despite the FTC’s optimistic statements this morning, to believe that Google recognizes its responsibilities as an industry leader. That is certainly consistent with the lack of change we continue to witness as we and so many others experience ongoing harm to competition in the marketplace.

The good news is that other antitrust agencies, within the United States and overseas, are still examining Google’s conduct. In Europe Vice President Almunia has made clear that he will close his investigation of Google only with a formal, binding order that addresses search bias and other issues. We remain hopeful that these agencies will stick to their established procedures, ensure transparency, and obtain the additional relief needed to address the serious competition law concerns that remain.

As an aside, the European Commission said that the FTC decision will have no “direct implications” for its antitrust investigation or decision. The Commission is currently in settlement negotiations with Google. However the Europeans are expected to be “tougher” on Mountain View than the FTC was.

Yelp: “A Missed Opportunity to Protect Innovation”

Here’s Yelp’s official statement, issued yesterday:

Today’s announcements by the FTC validate a number of the concerns we have raised about Google’s dominance in the search market and its anti-competitive behavior. The closure of the Commission’s investigation into search bias by Google without action, however, represents a missed opportunity to protect innovation in the Internet economy, and the consumers and businesses that rely upon it. We look for the regulatory bodies continuing their investigation to have greater success.

Marin Software: “A Huge Leap Forward”

The advertising platform provider focused on the AdWords/data portability aspect of the settlement and generally praised it in a statement attributed to Matt Lawson, Vice President Marketing and Partnerships:

Providing advertisers with true data portability is a huge leap forward for Google, search marketers, and the ecosystem of tools providers that support them.  This isn’t just a means to provide more efficiency to marketers, it’s a good business decision by Google.  By allowing advertisers to more efficiently manage campaigns across engines, marketers will ultimately be able to spend more time optimizing their programs and less time executing basic operational tasks in spreadsheets.  At the end of the day, improvements that make online advertising more efficient, ultimately result in improved performance and budget growth in digital, making this a win for all parties involved — including Google.

Kenshoo: “We Commend Google”

Marin competitor Kenshoo also praised the settlement on the basis of the fact that it would make search advertising more efficient across platforms:

Google disclosed that it was making two voluntary product changes to create a better experience. The first change gives websites the ability to remove content from specialized Google results pages. The second change allows third-parties that use the AdWords API, such as Kenshoo, to mix and copy ad campaign data across search engine networks.

This change will make it easier for marketers to manage their ad campaigns across Google, Bing, Yahoo, and other global search engines through the Kenshoo platform. More importantly, this change will improve search advertising performance by enabling marketers to quickly and effectively create optimal campaign structures and reallocate budgets to the keywords and channels that are providing the best financial returns.

“We commend Google for addressing the issue of advertising data portability and recognizing the value that companies like Kenshoo bring to the digital marketing ecosystem,” said Yoav Izhar-Prato, Kenshoo CEO. “Today’s announcement will make Kenshoo’s advanced tools even more attractive to advertisers who want to manage all their search campaigns in one place and optimize overall results.”

App Developers Alliance: “Good News for Developers”

The trade group App Developers Alliance liked the greater “clarity” around standards-essential patents and expressed hope that this settlement would reduce patent litigation.

“The agreement reached today is good news for app developers. Patent litigation slows innovation and inhibits growth in theapps ecosystem. The framework agreed to by Google and the FTC could help reduce patent litigation industry-wide if other companies voluntarily make the same commitments.

“This announcement, along with the Patent Assertion Entity Workshop co-hosted by the FTC and the Department of Justice last month, is another step in a much bigger effort to provide developers and entrepreneurs the clarity they need to innovate,” said Jon Potter, President of the Application Developers Alliance.

FairSearch.org: “We Will Continue to Fight”

One of the most vocal critics of Google and driver of considerable anti-Google lobbying and PR, FairSearch.org echoed Microsoft’s remarks but at a more general level (Microsoft is a member of FairSearch):

“The FTC’s decision to close its investigation with only voluntary commitments from Google is disappointing and premature, coming just weeks before the company is expected to make a formal and detailed proposal to resolve the four abuses of dominance identified by the European Commission, first among them biased display of its own properties in search results.

The FTC’s settlement is by no means the last word in this case, leaving the FTC without a major role in the final resolution to the investigations of Google’s anti-competitive practices by state attorneys general and the European Commission. The FTC’s inaction on the core question of search bias will only embolden Google to act more aggressively to misuse its monopoly power to harm other innovators.

State attorneys general who reportedly disagreed with today’s announcement by the FTC have an important role to play in ensuring both that Google is not allowed to continue practices that hurt every American business through artificially high advertising costs, and to demand that whatever changes Google is forced to make in Europe also apply for U.S. consumers who risk losing innovation because of Google’s aggressive abuse of its dominance.

FairSearch and its members will continue work with authorities in the U.S., Europe and elsewhere who are investigating Google. Our members also plan to participate in the European Commission’s market testing of any proposed binding remedies to Google’s harms.FairSearch will continue to fight to restore truly competitive conditions to the market for search and related online services. No less than the future of innovation and small business on the Internet is at stake.”

Yahoo didn’t offer any official reaction and hasn’t responded to our request for one as of the time of this writing. I suspect former Google executive and now Yahoo CEO Marissa Mayer would simply rather not take a public position that might alienate search partner Microsoft or sour her relationship with Google and its executives.

There were other reactions but the excerpts above reflect the range of opinions and emotions following yesterday’s press conference and settlement announcement. As some of the statements indicate the FTC’s case closure isn’t the final word.

The Europeans must make their decision and the US State Attorneys General are still a wild card in this antitrust poker game.

Related Topics: Channel: Industry | Features: Analysis | Google: Antitrust | Google: Critics | Google: Web Search | Legal: Regulation | Top News

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About The Author: is a Contributing Editor at Search Engine Land. He writes a personal blog Screenwerk, about SoLoMo issues and connecting the dots between online and offline. He also posts at Internet2Go, which is focused on the mobile Internet. Follow him @gsterling.

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  • Doc Sheldon

    Admittedly, I’m not intimately familiar with online paid advertising programs, having studiously avoided them in favor of more comprehensible methods. However, I do converse, on a daily basis, with several colleagues that are quite proficient in paid advertising, and I also stay abreast of nearly everything else that can affect my clients, especially originating in Mountain View.

    Like most of us, I’ve seen a lot of whining about Google’s results, as pertains to competitive products/services, but I have yet to see one instance that seemed to have even a hint of validity.

    A fanboy, I’m not, and I’ve got some complaints of my own about how Google runs some of its business, but I would think that the FTC would be embarrassed by having even launched this investigation. Even a cursory glance should have told them there was no basis for any action.

    My bet would be that the FTC was simply a victim of pressure to do “something”, simply because Google has gotten so big that it makes people nervous.

  • Durant Imboden

    The NY Times has published an op-ed titled “Is Google like gas or steel?” that’s more illuminating than the usual press releases by anti- or pro-Google lobbyists. It examines the FTC-Google settlement’s roots in First Amendment law, which faced a similar test in a case involving the Associated Press back in the 1940s:

    http://www.nytimes.com/2013/01/05/opinion/is-google-like-gas-or-like-steel.html

  • http://twitter.com/AdamRYP Adam Thompson

    Hmmm, all of these responses are from Google’s direct or indirect competitors (even the two platform providers are indirect competitors, as they compete against using Google’s Adwords management interface) – so these reactions are nothing more than outgrowths of how this development impacts their revenues. I’d be more interested in hearing what slightly less biased parties think.

  • http://www.barryadams.co.uk/ Barry Adams

    Your phrasing “an even more absurd analysis” implies Politico’s analysis of Google’s lobbying efforts is absurd, though less so. That is a value judgment that is rather untenable, Greg. Might want to rephrase that, lest it become embarrassingly clear where SEL’s loyalties lie.

  • Matt McGee

    Barry, the loyalty that SEL has is to our readers and to call things as we see them as individuals. We don’t have a corporate loyalty or corporate policy about favoring any company that we write about. You, as a longtime reader, should know that by now.

    Totally respect your right to disagree with Greg here, but if you’re suggesting that it’s based on some loyalty toward Google or any other company, that’s an “even more absurd analysis” than anything else. :-)

  • http://www.barryadams.co.uk/ Barry Adams

    Oh I think SEL’s entirely voluntary pro-Google stance is not a particularly well-kept secret, Matt. After all, SEL enjoys almost unparalleled access to Google sources, and you won’t do anything that might jeopardise that access. It’s not even a matter of editorial oversight – it’s a self-selected, subconscious bias inherent in your reporting.

    That’s not a conspiracy theory, that’s simple knowledge of how the media works.

  • Matt McGee

    I wish you were right, Barry. Unparalleled access would be nice and very helpful in getting all our questions answered. Maybe someday.

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