Google Dodges FTC Antitrust Charges, Will Change Business Practices

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

Meanwhile, Richard B. Brosnick, an antitrust attorney with Butzel Long, called the resolution of the case between Google and the FTC "an interesting and largely correct outcome."

"[The FTC] is aware of how Google's competitors will seek to criticize them, but they looked at the facts and backed away where ... they didn't have the evidence to bring a claim related to Google's search," said Brosnick.

"What pleasantly surprised me was that the FTC got relief in some other areas, but after extensive investigation they took no action on the search bias allegations," said Brosnick. "It's always struck me as unlikely in the extreme that Google would intentionally bias its search results because the vast majority of Google's business is horizontal search and they would be jeopardizing the primary line of its business. If it got out that you couldn't trust Google search results, then people would stop using them and their entire business model would go into the toilet."

One key for the FTC's agreement with Google is that it gives the government some of its most desired results without having to conduct a legal fight that would stretch from four to 10 years, he said.

"We might be witnessing a different paradigm where the enforcement agencies are satisfied with getting a half-loaf or quarter-loaf rather than have a case go on for 10 years," said Brosnick.

Now Google will have to see what happens in Europe with similar antitrust cases against the company in the European Union, where harsher consequences and actions are being considered.

Google was first notified by the FTC of a "formal review" of its business practices in June 2011 after similar reviews began in Europe. At that time, the European Commission launched an investigation into the company's search practices after vertical search engines such as Foundem, and Microsoft's Ciao complained the company favored its own Web services in search results on over theirs. They argued that this put them at a significant competitive disadvantage in the market.

The initial FTC review in 2011 began after the agency heard complaints from Microsoft, Expedia, TripAdvisor, Yelp and other Websites that Google promotes its own Web services above those of competitors.

Google denied all such allegations at that time, noting that its search algorithms analyze Website quality and popularity based on links for placement as part of its PageRank system.

In July, Google reached a record $22.5 million settlement with the FTC to resolve charges that Google bypassed Apple Safari browser privacy settings that blocked cookies for their users. The settlement was criticized by the Competitive Enterprise Institute, an industry group, as "a dangerously overbroad precedent that will chill Internet innovation and hurt online startups," the Institute said in a statement at that time.


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