Report: FTC Likely To Abandon “Vertical Search” Antitrust Claims Against Google

There are now enough indications to suggest that any antitrust settlement between the FTC and Google — and the FTC would much prefer to settle than test its case  in court — won’t involve “vertical search.” An earlier Reuters report, probably resulting from an internal FTC leak, suggested that vertical search wasn’t the core of the agency’s case against Google.

Today Bloomberg is reporting that the FTC is “wavering” on whether to pursue a formal action against Google. In particular the agency’s own people (anonymous sources) suggest they can’t make the “vertical search bias” claim stick legally:

Federal Trade Commission officials are unsure they have enough evidence to sue Google successfully under antitrust laws for giving its own services top billing and pushing down the offerings of rivals, said the people, who asked for anonymity because the discussions aren’t public. Regulators are also looking at whether the ranking system’s benefits to consumers outweigh any harm suffered by rivals including NexTag Inc. and Kayak Software Corp, the people said.

This is huge. The “search bias” argument is the core of FairSearch and other Google critics’ complaints against the company. While much of the antitrust wrangling playing out in the press is about public relations, there’s a misrepresentation of antitrust law behind Google’s most vocal critic’s arguments. The implication is that somehow antitrust law operates for their benefit — it doesn’t.

Antitrust law is intended to protect consumers rather than competitors. Protecting competition is the means to the end of promoting consumer interests. But protecting the position of individual companies in the market is not an aim or goal of antitrust rules, although when abuse of a dominant market position harms competition antitrust violations may be found. As a practical matter it’s often competitors who agitate for antitrust action, as in this case.

While it may seem deeply unfair to rivals that Google can use its search dominance and traffic to promote services like Google Maps, Google Shopping or Google Hotel Finder these services arguably benefit consumers. And when they’re weak consumers readily turn to others. For example, Kayak’s CEO reported to CNBC a couple of months ago that Google’s travel search services so far had “no impact” on its business.

The FTC would have enormous trouble making the case that Google isn’t entitled to “discriminate” between services with its algorithm — that’s the entire point of Google’s algorithm — or that its “promotion” of Google Maps instead of Mapquest, for example, harms consumers in any way. Then there’s the long-standing problem of remedies and the US intervening in the SERP.

FairSearch has tried to answer these issues and critiques with a list of “principles for evaluating antitrust remedies to Google’s antitrust violations.” Attorney Marvin Ammori, whose firm has been retained by Google, argues point by point that these principles are “ill conceived.”

In Europe Google faces similar claims, arguments and issues. Any decision not to pursue the “vertical search” angle in the US could influence the Europeans to reassess their position on that issue.

Decisions are due very soon on both sides of the Atlantic about whether to bring formal cases against Google. However both sets of regulators would much prefer to settle and avoid a protracted and potentially unsuccessful (and therefore embarrassing) legal battle — if they can.

Related Topics: Channel: Industry | Google: Antitrust | Google: Critics | Google: Legal | Legal: General | 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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  • fran farrell

    Potentially debilitating future threats by the FTC. If the commissioners want law settled against them they should go to court.

  • http://twitter.com/adamjepstein Adam J Epstein

    FTC is right to focus on Google’s Search Partner Network. Google uses its monopoly position to require publishers to sell their search traffic exclusively to Google (via advertising placements). This hurts advertisers and publishers – and ultimately consumers. Obtaining a consent decree that requires Google to compete for traffic outside of its own search box, would improve the ecosystem immensely.

  • http://twitter.com/gsterling Greg Sterling

    These exclusivity agreements are an easier and potentially legally clearer issue to tackle

  • daveintheuk

    I hope this report is wrong – if not the FTC are about to make an Insane, spineless, short sighted blunder that will harm businesses around the world.

    Google tells us to imagine search engines didn’t exist – perhaps they should imagine shareholders don’t exist, and go back to being the admirable company they once were before they got so damn greedy.

  • http://twitter.com/HyperTexted Kevin Gerding

    Antitrust laws were created in the 1800s. LOL How can horse and buggy laws be applied to the digital world? Politicians, concerned more about reelection than their country, are mostly to blame for not giving the FTC modern tools to safeguard a fair marketplace. But I would agree the FTC is a bloated and very ineffective organization. For a government agency that is to protect consumers and businesses, it seems they are quite passive in any of their enforcement actions.

  • http://www.tylerherrick.com Tyler Herrick

    I’m glad to see the FTC wavering on this part because of vertical search. It’s human nature to categorize things, it makes sense that a few of the *most* popular queries would be split into a vertical search. Now, Universal Search can pull from across all verticals as well as organic, in attempt to surface the best results from all subsets. Sometimes an organic result is #1, and the less-confident results from verticals are placed lower. Sometimes it’s the other way around. You win some you lose some.

  • http://www.socialbakers.com/ Peter Kelly

    I can’t but agree with you, sir. These are really wise words – “Google tells us to imagine search engines didn’t exist – perhaps they should imagine shareholders don’t exist”. With your permission, I will use this sentence later on. Thanks Dave.

  • Steven Spangler

    Resistance is futile; you will be assimilated.

  • http://profile.yahoo.com/FON3E6ETYC6HLHZQIIMON5QFYY Ralph

    uptil I saw the draft 4 $8815, I did not believe that...my... brother was like really earning money in their spare time at their computer.. there mums best friend has been doing this 4 less than 21 months and resently cleard the morgage on there home and got themselves a Car. go to, A­sk25.­­com

  • daveintheuk

    Please, feel free :-)

  • Alex Murphy

    You should read up on anti-trust law. No matter your feelings about some idealistic vision of a past Google (that never truly existed), the simple fact is what Google is doing is not illegal under current laws. The FTC doesn’t have a leg to stand on, and if they go to trial they know that Google will fight, and has more money and better lawyers, and will win. And the FTC will be embarresed and their reputation possibly irrevocably damaged.

    And Google’s goal has always been to “organize the world’s information and make it universally accessible.” Of course with a mission like that, their boundaries and “search verticals” are potentially limitless. I think their greed is not for more money, but a never-ending appetite for data. Larry and Sergey particularly don’t seem to give a crap about shareholders, or they wouldn’t invest in all these dream profits and keep playing the long game (just like Amazon).

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