Google Wins Landmark Aussie Court Fight on Advertising: Reports

By Todd R. Weiss  |  Posted 2013-02-06 Print this article Print

An Australian court ruled Google isn't responsible for sponsored links during searches of Web content. The ruling could have impacts in other nations.

In the recent FTC ruling in the United States, Google won a huge battle as the commission voted to close its longtime investigation into allegations that the company has been manipulating its search algorithms to favor its results over competitors. Instead, the FTC found that not enough evidence existed to prove such allegations.

Both decisions capped a 19-month investigation into Google's search practices and patent portfolios in the smartphone, tablet and gaming device markets.

Among the key parts of the FTC agreement with Google is that the search company will end some past business practices that could stifle competition in the markets for popular devices such as smartphones, tablets and gaming consoles, as well as the market for online search advertising, according to the agency. Under a binding settlement with the FTC, Google will allow competitors access "on fair, reasonable and nondiscriminatory terms to patents on critical standardized technologies needed to make popular devices such as smartphones, laptop and tablet computers, and gaming consoles," the FTC reported.

Meanwhile, Google is still embroiled in an antitrust case in Europe, where the company continues to work with the European Union to resolve that agency's concerns about Google's allegedly anticompetitive business practices.

In late January, Google again sent a list of proposals to the EU outlining how it can change its business practices to resolve those concerns. Google had sent previous lists of proposals to the EU last summer, but those earlier proposals failed to satisfy European regulators. Google was given more time, until Jan. 31, to submit new proposals.

The EU investigation centers on what they regard as Google's dominant position in search.

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 European 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 2012, 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 in a statement by the Competitive Enterprise Institute, an industry group, as "a dangerously overbroad precedent that will chill Internet innovation and hurt online startups."


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