Senators Ask FTC for 'Thorough' Google Antitrust Probe
Like a pit bull with a porterhouse steak, U.S. senators have latched on to the notion of Google (NASDAQ:GOOG) as a company whose search business is having a deleterious impact on fair competition in search and Internet commerce.
Sens. Herb Kohl, D-Wisc., and Mike Lee, R-Utah, chairman and ranking member of the Judiciary Antitrust Subcommittee, Dec. 19 sent this letter to Federal Trade Commission Chairman Jon Liebowitz airing concerns over Google's business practices and its impact on competition in Internet search and commerce.
Kohl and Lee stopped short of claiming Google violated antitrust laws and the FTC Act. Even so, the senators asked the FTC, which is already scrutinizing Google for the same antitrust concerns, for a full, formal antitrust probe into Google's business conduct.
The senators' message is nothing new. Kohl and Lee had earlier called Google Executive Chairman Eric Schmidt on the congressional carpet on Capitol Hill Sept. 21 to answer claims that the search engine giant unfairly favors its search results over rivals such as Yelp and Expedia.
The new letter seems to be a parting shot at Google as the company heads into 2012, with its 65 percent U.S. search share still very much intact. The senators clearly want to impress upon the FTC to look into the issues they and their fellow Congress members broached at their hearing to determine whether Google violated antitrust laws.
"We believe these allegations regarding Google's search engine practices raise important competition issues," Kohl and Lee wrote to the FTC. "We are committed to ensuring that consumers benefit from robust competition in online search and that the Internet remains the source of much free-market innovation."
Google isn't taking the complaint personally, telling eWEEK: "These letters are customary, and we appreciate that the committee reserved judgment as we continue to cooperate with the FTC. We are committed to competing fairly on the Internet's level playing field."
While several members of Congress grilled Schmidt at the hearing in September, Kohl and Lee were especially critical. Lee accused Google of cooking its search results to favor its own Web services over results for Yelp, Expedia, Nextag and others.
Schmidt coolly replied that "we've not cooked anything." Schmidt also said that Google learned from convicted monopolist Microsoft (NASDAQ:MSFT).
"We get it. By that, I mean that we get the lessons of our corporate predecessors," Schmidt said in his oral testimony, without naming Microsoft. "What we ask is that you help us ensure that the Federal Trade Commission's inquiry remains a focused and fair process, so that we can continue creating jobs and building products that delight our users."
Interestingly, Rick Rule, a partner at Cadwalader, Wickersham & Taft LLP and outside counsel to Microsoft, applauded Kohl and Lee's letter to the FTC. Rule, who headed the Department of Justice's antitrust division from 1985 to 1989, said:
"Senator Lee is right to call for careful scrutiny of Google, given the numerous allegations of antitrust violations by the company. The antitrust laws of this country prohibit companies like Google that dominate important parts of our economy from using their market power to destroy competition and to deny consumers of choice. Decisions from conservative courts make clear that the antitrust laws apply just as much to the new economy as to the old. If a company like Google is allowed to flout the rule of law, then free-market competition will suffer."