Google Dodges FTC Antitrust Charges, Will Change Business Practices

By Todd R. Weiss  |  Posted 2013-01-03 Print this article Print

As part of the agreement, Google "also has promised to provide all Websites the option to keep their content out of Google's vertical search offerings, while still having them appear in Google's general, or 'organic,' Web search results," the commission reported. "The FTC investigated allegations that Google misappropriated content, such as user reviews and star ratings, from competing Websites in order to improve its own vertical offerings, such as Google Local and Google Shopping. Some FTC commissioners were concerned that this conduct might chill firms' incentives to innovate on the Internet."

Beyond those steps, however, Google escaped FTC enforcement scenarios when it came to one of the biggest parts of the agency's 19-month-long investigation into the company's conduct—the allegations by competitors that the company had manipulated its search algorithms to harm vertical Websites and unfairly promote its own competing vertical properties.

Many business rivals, including Microsoft, have loudly complained about this alleged practice for several years, but Leibowitz said that not enough evidence was found to make such a case.

"Many of Google's critics—including many of its competitors—wanted the commission to go further in this investigation and regulate the intricacies of Google's search engine algorithm," he said. "Although some evidence suggested that Google was trying to eliminate competition, Google's primary reason for changing the look and feel of its search results to highlight its own products was to improve the user experience. Similarly, changes to Google's algorithm that had the effect of demoting certain competing Websites had some plausible connection with improving Google's search results, especially when competitors often tried to game Google's algorithm in ways that benefitted those firms, but not consumers looking for the best search results. Tellingly, Google's search engine rivals engaged in many of the same product design choices that Google did, suggesting that this practice benefits consumers."

Overall, the FTC "did not believe that the evidence supported a FTC challenge to this aspect of Google's business under American law," Leibowitz said.

Competitors who don't agree with the FTC's actions can still file their own lawsuits, he said, and take Google to court over the matter.

"You have to at some point resolve your investigations, and even though a lot of people would like us to bring a big search bias case against Google, there's nothing there to investigate," Leibowitz said.

In the meantime, Google has entered into enforceable agreements with the FTC to change its behaviors, he said. "If they stop complying ... the actions are enforceable. There are monitoring requirements. If they are scraping content of rivals we will know that, [competitors] will come to the FTC, and many of them did. We'll know, let me assure you."

In a statement on the Official Google Blog Page, David Drummond, senior vice president and chief legal officer for Google, wrote that the company is fully prepared to voluntarily implement the changes that have been laid out for it.

"As we made clear when the FTC started its investigation, we've always been open to improvements that would create a better experience," wrote Drummond.  "We've always accepted that with success comes regulatory scrutiny. But we're pleased that the FTC and the other authorities that have looked at Google's business practices—including the U.S. Department of Justice (in its ITA Software review), the U.S. courts (in the SearchKing and Kinderstart cases) and the Brazilian courts (in a case last year)—have concluded that we should be free to combine direct answers with Web results. So we head into 2013 excited about our ability to innovate for the benefit of users everywhere."


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