Report: Majority Of FTC Commissioners Want Antitrust Action Against Google, But Vertical Search Might Not Be Issue

Reuters is reporting that majority of those on the US Federal Trade Commission believe an antitrust case should be brought against Google. But if action comes, it doesn’t seem likely to involve Google being found to “favor” its own “vertical” search engines like local or shopping over competing ones.

Apparently four of the five FTC commissioners are now convinced that “Google illegally used its dominance of the search market to hurt its rivals.” Another commissioner is not similarly convinced. The identities of the commissioners in favor of the action against Mountain View were not revealed.

Decision by the End of the Year

Several weeks ago FTC chairman Jon Leibowitz had said that a decision about whether to pursue an antitrust case or comparable remedial action against Google would be forthcoming by the end of the year.

Google is currently negotiating an antitrust settlement with the European Commission over four areas of “concern” identified earlier this year after an extended investigation and comment period in Europe. Google also faces separate antitrust related investigations several US states, including California, New York and Texas.

Anti-Google lobbying consortium FairSearch.org has lead the charge in the US and to a lesser degree abroad against the company. Google rival Microsoft is one of the principals of that group. (However FairSearch member Kayak told CNBC that Google’s travel search results have had “no impact” on the company.) Other, smaller companies and competitors have also come forward to file complaints in both Europe and the US against Google.

The balance of opinion among US legal scholars I’ve read appears to be that meeting the specific burdens and legal requirements of an antitrust case against Google would be challenging. Google’s market share alone is not enough to make the case. There are numerous findings that must occur and tests that must be met.

Protecting the Public or Google’s Competitors?

Depending on how one “scopes” or defines Google’s market, it could be seen as more or less competitive. In the broadest sense Google is competing on multiple fronts against Apple, Microsoft and more recently Facebook and Amazon. At the highest level its markets look pretty dynamic and competitive.

The FTC is supposed to advance consumer interests rather than protect or promote the interests of Google’s specific competitors. Preserving competition is a mechanism for keeping markets working and healthy. However many of Google’s competitors have acted as though antitrust rules were designed to protect them rather than the public at large.

Earlier this year the FTC hired career Washington lawyer Beth Wilkinson to potentially bring a case against Google. Wilkinson is a veteran antitrust attorney and former Justice Department official with an unbeaten trial court record. The move appeared to be an early signal that the FTC was getting serious about its potential case against Google.

If the FTC decides to proceed against Google the agency could try to settle in much the same way that the European Commission is currently negotiating with Google. However, absent such a settlement, formal litigation would follow (as it did in the Microsoft case). That remains a risk and possibility in the European case as well.

Postscript From Danny Sullivan: Most notable to me from the Reuters report is that the FTC doesn’t appear to be finding that Google is somehow abusing its market dominance by “favoring” its own vertical search engines such Google Places or Google Shopping over competitors like Yelp or Nextag.

Nothing about this is mentioned in the report. Rather, the FTC seems more concerned about ensuring that ad campaigns can be made “portable” from Google to competitors like Bing:

The one source said the FTC commissioners have given weight to other complaints that Google refuses to share data that would allow advertisers and developers to create software to compare the value they get on Google to advertising spending on Microsoft’s Bing or Yahoo.

Postscript II: Courtesy of Gary Price, you can watch the full 2.5 hours of a recent conference on Google an antitrust law, sponsored by the conservative leaning American Enterprise Institute in Washington, DC and recorded by C-Span. You’ll get a very concentrated dose of the obscure and technical nature of antitrust law.

Related Topics: Channel: Industry | Google: Antitrust | Google: Critics | Google: Legal | 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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  • http://113tidbits.com tonyknuckles

    Government should get out of the business of trying to regulate business. Isn’t this the whole meat and potatoes behind business? Competition forces lesser services to build up their tools to “compete” – not make everything “fair” across the board.

  • James Fral

    It really would not hurt for Google to be knocked down a peg but I don’t like the way the government is trying to step in on this one. It is not good that they have this much influence on business operations.

  • MauriceGriffin

    Does everyone just assume that Google is doing something underhanded? I never hear much in the way of specifics in these investigations. Perhaps everyone is just scared of the kind of tricks that Google COULD pull. I’m basically a Google fanboy and even I find the idea of a fully evil Google quite chilling.

  • Eddies Playlists

    Is fairsearch.org funded / backed by Microsoft? Their logo appears on the About Fairsearch.org page. Wonder what Firefox thinks about this? Pot meet kettle.

  • Chris B

    My understanding that both “imagined speculative future harm”, and witchcraft are no longer admissible as evidence in antitrust trials.

  • http://ftc.gov/ MonopolizedSearch

    I believe Microsoft is a member of Fair Search. What FireFox thinks about this should not matter since Fair Search believes in a competitive marketplace for all. Google, on the other hand, is a founding member of the Washington D.C. based mega-lobbying group The Internet Association http://internetassociation.org that includes Amazon, eBay, Facebook and many other cartel members that collectively control most of the traffic. The Internet Association claims to be a “unified” voice for the internet economy, but yet no small businesses are permitted membership in their organization. Who’s message is more deceptive and platform would be more harmful to consumers? The Internet Association (Google is a member) or Fair Search (Microsoft is a member)? Let their platform messages and present/future actions be used in formulating your opinion.

    I personally believe the FTC is a bloated government agency that is ill-equipped to protect consumer choice. Their apparent failure in pursuing an investigation into how Google favors its verticals, right before an important holiday shopping season for many small businesses, is a clear indication of how weak at the knees the FTC truly is.

    As Google continues to release pandas, penguins and other zoo animals, one thing is certain – more businesses will be forced into paying for Adwords to be seen in Google. For a one trillion dollar a year industry, where many people first go to a search engine prior to completing a transaction, Google’s market dominance places them in a unique position to profit as they continue their pursuit of becoming a bid engine.

  • Chris B

    Is that a yes then?

  • http://ftc.gov/ MonopolizedSearch

    You are very correct in your statement. You don’t have a clue.

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

    There’s a difference between a generalized perception that a company is too powerful and specific findings required to prove antitrust. http://www.maldonadomarkham.com/Antitrust-Law-San-Diego.htm

  • http://searchengineland.com/ Danny Sullivan

    Yes, they are.

  • http://www.facebook.com/saul.moore1 Saul Moore

    After reading your reply and seeing your account name i tend to believe that you are not exactly unbiased in this. It would seem you have some stake in this as more then just a consumer.

  • Alan

    Everyone has a stake! You have a stake Saul otherwise you wouldn’t be here reading.

  • http://www.facebook.com/people/Richard-K-Price/100000087011487 Richard K Price

    WAR ON THE INTERNET.
    What ? not happy with the war on drugs? Fast and Furious not fast enough? So why not start a war on the INTERNET? WTF ! Do we have idiots in the D.O.J. and F.T.C.? This is a real no-brainier. The unrestricted flow of ideas and information has been the undoing of totalitarian and repressive governments and groups history-wide. It is easy to see why the government is so desperate to control the INTERNET. How do we get these people out of their positions of authority? I don’t want any part of their war. be it drugs the war on the INTERNET or anything else. Everything they do is against Americans and anyone worldwide who desire to be free from restrictive corrupt government and politicians. These are the responsible persons for much of the dirty dealing in government. It sounds just like our bought and paid for corporate politicians. Any corporation with enough money can now buy their very own laws.Better still..we pull them out like a bad tooth.Also; lets not forget their sociopath cronies in the D.E.A.

  • http://ftc.gov/ MonopolizedSearch

    You would be correct. However, not many ordinary consumers are visiting Search Engine Land to buy a gift for a friend. Therefore, it would be safe to assume everyone here is biased as Alan eluded to.

  • http://www.youtube.com/watch?v=BccY6KOrSos David Abraham

    Hilarious :)

  • Durant Imboden

    I can understand why you’re not happy with Google’s search results (I’m not, either), but I don’t see how government action against Google for being successful is going to help either of us. It’s highly unlikely that a court will order Google to roll back its search results to an earlier date and freeze those results for the convenience of businesses that did better with Google’s older algorithms.

  • cjvannette

    Except the FTC doesn’t care about that.

  • http://twitter.com/freegiftcardshq Dean Calvert

    I have to second that. It is SO OBVIOUS what G is doing, Cornering he market before the holiday. News Flash- It”s what all multi billion dollar companies do- That is why the Govt and economy are in the crapper.

  • http://twitter.com/freegiftcardshq Dean Calvert

    Uh when Companies have billions of dollars corruption follows. Seen this movie too many times.

  • MauriceGriffin

    If the the FTC wants to investigate every billion dollar company thats fine, and it makes sense that they fear another Microsoft situation. But I still don’t get what anti-competitive stuff Google is supposedly doing. Anyone can just use Bing instead, or any other search.. Seems inevitable Google is going to end up with special rules for it though. I just hope the next tech ‘monopoly’, after big G is taken down a few notches, is as transparent and supportive of open source.

  • Jim

    Dear Mr. Sterling

    Regarding…

    “But if action comes, it doesn’t seem likely to involve Google being
    found to “favor” its own “vertical” search engines like local or
    shopping over competing ones.”

    Who’s opinion is this “yours”… where is the evidence for this statement?.

    Google have been doing this for years, and everybody in the industry knows it, it’s long overdue for the FTC to take strong action against Google, and they will, and as far as “Do no evil” they ARE evil… very evil, and everyone (apparently with the exception of Mr. Sterling) knows this too.

    This is a very biased article in favor of Google, is Mr. Sterling looking for a job on the Google campus I wonder?

    Oh and you declined to mention (mabey you don’t know) the FTC only need 3 votes to proceed, and they have 4, so either do your research and tell the full story or don’t even bother publishing such ludicrous biased articles.

    J.

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