FTC Closes Google Antitrust Case: “Law Protects Competition Not Competitors,” Not Enough Evidence To Prove “Search Bias”

After 19 months of investigation, political maneuvering, lobbying and intense speculation the FTC has closed its antitrust investigation of Google. The outcome is almost exactly as we reported yesterday and it’s probably legally correct.

Google comes away largely unscathed from the process. Once can hear the celebrations getting started in Mountain View.

The settlement has three components. Henceforth there will be no involuntary scraping of third party content for inclusion in “specialized” (vertical) Google search results (the Yelp case). Google will also enable easier exporting of AdWords campaigns to Bing and other platforms. And Google (through a consent decree) will be required to fairly license Motorola’s “standards-essential” patents and stop using them in an anti-competitive way to block rival products.

Here’s what the settlement requires according to the FTC:

Under a settlement reached with the FTC, Google will meet its prior commitments to allow competitors access – on fair, reasonable, and non-discriminatory terms – to patents on critical standardized technologies needed to make popular devices such as smart phones, laptop and tablet computers, and gaming consoles. In a separate letter of commitment to the Commission, Google has agreed to give online advertisers more flexibility to simultaneously manage ad campaigns on Google’s AdWords platform and on rival ad platforms; and to refrain from misappropriating online content from so-called “vertical” websites that focus on specific categories such as shopping or travel for use in its own vertical offerings.

FTC Chairman Jon Leibowitz said the settlement “follows an exhaustive investigation into Google’s business practices.”

The commission chose to close its investigation into alleged “search bias,” which was Google’s rivals’ main area of interest. Leibowitz said the decision of the FTC was unanimous on this point and that there wasn’t enough factual evidence under the law to support any sort of complaint.

Leibowitz also pointed out that Bing and Yahoo (both by implication) do some of the same types of things that Google was criticized for doing: showcasing specialized content on SERPs at the expense of third party organic results. Leibowitz said that while there was “some evidence” of SERP manipulation by Google (he didn’t elaborate), the FTC found that most of the actions Google undertook were for the benefit of its consumer-user base.

Leibowitz emphasized, “The law protects competition not competitors.”

He was somewhat defensive throughout the press conference, explaining repeatedly that the commission’s investigation had be extremely thorough and lengthy. He added that Google’s voluntary commitments on the search side will be monitored and will be subject to enforcement if they’re violated.

Leibowitz characterized the commission’s decision and actions as being consistent with the law and in no way a capitulation to Google. He lead with the tougher-sounding announcement of the consent decree in the patent case and argued that “We stopped [Google's] abuse” of Motorola’s patent portfolio to harm competition in the mobile market.

On the search side Leibowitz repeated that Google would be monitored and that the FTC would take action if the company not fulfill the terms of its voluntary agreements. “We’re in a trust but verify” mode, said Leibowitz.

Google said the following about the FTC settlement on its blog:

  • More choice for websites: Websites can already opt out of Google Search, and they can now remove content (for example reviews) from specialized search results pages, such as local, travel and shopping;
  • More ad campaign control: Advertisers can already export their ad campaigns from Google AdWords. They will now be able to mix and copy ad campaign data within third-party services that use our AdWords API.

The company also said, “We’ve agreed with the FTC (PDF) that we will seek to resolve standard-essential patent disputes through a neutral third party before seeking injunctions. This agreement establishes clear rules of the road for standards essential patents going forward.”

I think what can be definitively said is that this is a major victory for Google (capital M). The settlement requires Google to make some relatively minor changes to its AdWords practices and to the way it deals with the indexing and presentation of third party content. Google will also discontinue some of its patent litigation. All of these are simple actions that involve little or no expense on the company’s part.

By the same token, there are no fines and no continuing litigation.

Critics and competitors who still firmly believe that Google is abusing its dominant market share position will be bitterly disappointed and will have to look to other venues, especially Europe, for potentially tougher penalties.

On that note, in response to a reporter’s question, Chairman Leibowitz said that he believed the Europeans were “making progress in their negotiations with Google.” However regarding the notion that the US Department of Justice might now take up an antitrust case against Google, Leibowitz essentially dismissed the idea.

Postscript: Here’s anti-Google lobbying group FairSearch.org’s highly critical reaction to the settlement announcement:

“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.”

Related Topics: Channel: SEM | Google: AdWords | Google: Antitrust | Google: Legal | 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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  • daveintheuk

    Brilliant, the FTC has just given Google a green light to continue to manipulate search results in their own favour. Let’s hope the EU have more balls than this.

  • http://www.showcasemarketing.com/ideablog/ Bill Freedman

    I see more nuance here. A 19 month detailed investigation isn’t a green light. Google is aware they are under continuous observation…and don’t want to be put under supervision.

    As for search results being manipulated in their own favor, you’re right. They’ve created a money press for their shareholders and employees. Their high valuation is in their unique ability to produce results that are good for them and keep users coming back for more.

    Others are trying to do better, and have a chance to succeed. Google has a deep pocket competitor (MSFT/Bing), an innovative competitors (blekko) and many, many niche competitors (Facebook, Yelp, LinkedIn, etc.). Who will win? Maybe Google…or maybe several players….I don’t pretend to know.

    The is a great case where the FTC did a good thing by getting into Google’s face, but allowing the marketplace to answer the really tough questions.

  • http://twitter.com/ShanePBrady Shane P. Brady

    If you don’t like it, then don’t use Google. Google has the right to display whatever they think is the best result for a particular search.

  • Durant Imboden

    I wonder how much the FTC’s unproductive fishing expedition cost the taxpayers?

  • Pat Grady

    Google can’t scrape data… caw, caw! Did you hear that Raven?

  • http://twitter.com/musiclmissionry Musical Missionary

    The FTC’s job isn’t to coddle butthurt competitors. It’s to ensure market power isn’t abused to harm consumers. They did their job here .

  • http://federicoeinhorn.com/ Fede Einhorn

    Google is doing it right. If someone disagrees then is you who are on the wrong side. There are several other engines to choose from.

    The messy side is that we are all (almost) looking at Google because we know their size and results by ranking better there than on others.

  • http://www.michaelcropper.co.uk/ Michael Cropper

    What an absolute joke! Maybe the FTC didn’t read Google’s business plan in full, http://www.michaelcropper.co.uk/2012/06/googles-business-plan-steal-content-and-screw-publishers-1081.html

  • http://twitter.com/garethowen1 Gareth Owen

    In the UK at least, they are engaging in anti-competitive activity, placing their own financial comparison results above those of existing companies. Having bought a price comparison site, Google are clearly breaking the advertising rules here. It would be like a TV company buying Geico and serving their ads during every TV break before and after a competitor’s ad.

    I can understand the FTC’s case – “Google is clearly one of the great american companies” said the main guy in charge of the investigation, so no bias there, then. Fortunately in Europe no one will care about that. If the EU don’t rule against them then there is something very wrong as the breach is clear.

  • http://www.delivra.com/ Cody Sharp

    Search for ‘social network’ and then ‘word processor’, Google clearly isn’t placing themselves above their stronger competitors in these search results. Facebook comes up on the 2nd page (I never saw Google+) and for word processor, Office comes up 2nd (after a wikipedia article) and Google is forced to advertise to be relevant for this search term. The FTC did the right thing here. While Google clearly holds tremendous power over a company’s success, I have seen no obvious manipulations of search data against major competitors.

  • steven75

    Not a fan of the Sherman Anti-Trust Act, I take it?

  • daveintheuk

    I’m not, generally I find their results too cluttered and the quality of the organic results going downhill fast (presumably to make their own content look as if it is the only choice)… but as a publisher, I’m sick of them abusing their position in the market, abusing my content and lying.

  • daveintheuk

    You are right that they will remain in the spotlight, but how likely are the FTC to take action? Everyone in the industry knows what Google is doing – it is obvious (and understandable as they are a corporation with shareholders to reward)… it seems to me the FTC have either missed things or willingly ignored them.

    I hope some of the other competitors you mention succeed, but I fear the day for small, knowledgeable (actual knowledge, not scraped data like their “knowledge graph”) publishers who really know their subject and care about the content they produce are gone.

  • http://www.facebook.com/mjardeen Michael Jardeen

    The SEP/FRAND piece is huge and will also impact Samsung as both companies are being investigated here and in Europe. The outcome is a blow in their fight with Apple over mobile patents. Both Motorola and Samsung have more SEP patents that will now have to be licensed fairly, rather than being used for highway robbery.

  • http://www.facebook.com/mjardeen Michael Jardeen

    Actually Shane they don’t have that right if they violate anti-trust laws. The simple concept that people seem to miss is that being a monopoly is not illegal, but abusing that position is. It was not illegal for Microsoft to be a monopolist, what was illegal was what they did with that monopoly. They were convicted of anti-trust violations, just as Google could be if they are not careful. Nothing in this decision precludes legal action by other parties and means that Google has only gotten breathing room.

  • daveintheuk

    Yup, I know many UK publishers who have gone bust or given up – not because of traditional competition – but because the people who control 93% of the search market are giving their own products massive preference.

    Nobody begrudges Google entering the content space (although I wonder why they do when they aren’t interested in it, or particularly good at it) – but it seems reasonable that given their monopoly on search/traffic they should be forced to treat their own properties. How would their Google+ Local or “Knowledge” Graph content fare under Panda… rather badly I suspect.

  • Chris B

    What does everyone know that “Google is doing”? I seem to have missed this, my understanding is that they are putting their mapping, image and shopping products featured to on their home page into a text search page that is also featured on their homepage. Do no evil indeed.

    Is hybridization of maps, images, and text an “abuse of monopoly”? If so, what is the legal extent to which the Sherman Act, a 120 year old law predating computers that hasn’t since been updated, explicitly limits multimedia and text search hybridization?

  • daveintheuk

    Giving unfair prominence to their own content (which generally isn’t theirs at all). Ranking their products differently to others – why should a Google+ Local page for a business with nothing but an address and phone number be ranked above detailed, well written pages (Panda not applied to their own stuff). Restricting access to keyword data (except when advertisers are paying) under the banner of user privacy (despite the fact that they are using that keyword data themselves). etc etc etc

  • Chris B

    Answer the damn question, shill.

  • Chris B

    .

  • Evan Rinehart

    The question of whether Google has feasible competitors is irrelevant. For the services they deliver it’s lucky they cost as little as they do. It’s a good thing that greedy competitors were not able to use law enforcement for profit in this case.

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