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Google And Other Tech Firms Brace For More Anti-Trust Scrutiny

Greg Sterling on May 18, 2009 at 10:48 am

As the Wall Street Journal reports, and as we’ve written about before, the Obama Administration is getting ready to be much tougher than its predecessor in the anti-trust realm. The terrible irony is that a large number of tech executives and workers at Silicon Valley companies supported the Obama candidacy and now it may impact them in a very direct way. All this goes double for Google, whose CEO Eric Schmidt was an advisor to Obama on technology issues.

The new head of anti-trust for the US Department of Justice, Christine Varney, has already used the “m-word” in connection with Google’s market position. (European regulators, much tougher than the Bush Administration consistently, will continue to bring anti-trust heat and regulatory scrutiny to companies from their side of the Atlantic.) But there’s also reason to think that a Microsoft-like anti-trust action against Google may not happen.

The Journal article points out that Google has spent increasing amounts of time and money with legislators and regulators seeking to educate them and address their concerns in a more pre-emptive way. And an analysis in the New York Times suggests, a splashy anti-trust case against Google is unlikely absent more than “size and strength”:

Google’s power is a cause of worry in many industries — media, advertising, telecommunications and software. Yet being large, successful and ambitious is not an antitrust violation. “You’ve got to be big, and you have to be bad,” observed Andrew I. Gavil, a law professor at Howard University. “You have to be both.”

In the Microsoft case, the software giant’s monopoly in personal computer operating systems was not an antitrust problem. It was its corporate actions, including using contracts and bullying tactics to stifle competition, that broke the law, the federal courts ruled. Such strong-arm practices, legal experts say, have not been part of the Google story.

Unless Google is shown to engage in a pattern of anticompetitive conduct, the company is likely to face constant scrutiny, but not a major federal suit, antitrust experts say.

The Times piece goes on to say regulators may examine Google’s every move, including whether it favors its own properties vs. competitors, but that Google will need to cross the line with behavior that actively tries to thwart competition before an anti-trust action would be filed.

About The Author

Greg Sterling

Greg Sterling is a Contributing Editor at Search Engine Land. He writes a personal blog, Screenwerk, about connecting the dots between digital media and real-world consumer behavior. He is also VP of Strategy and Insights for the Local Search Association. Follow him on Twitter or find him at Google+.