Google could have been hit with a government sledgehammer in connection with charges of anticompetitive behaviors against rivals, but instead the search giant has come away with a much less damaging fate—a voluntary agreement with the Federal Trade Commission to change some of its business practices.
Google also won a separate and large part of the multipronged battle as the FTC voted to close its longtime investigation into allegations that Google has been manipulating its search algorithms to favor Google's results over competitors. Instead, the FTC found that there was not enough evidence to prove such allegations.
Both decisions were announced Jan. 3 in an FTC conference call that caps a 19-month investigation into Google's search practices and patent portfolios in the smartphone, tablet and gaming device markets.
"Today's action delivers more relief for American consumers faster than any other option available to the commission, and protects competition and consumers in a number of crucial markets central to the daily lives of hundreds of millions of American consumers and businesses," Jon Leibowitz, chairman of the FTC, said during the call. "It ensures Americans continued access to smartphones, tablet computers and computer gaming systems as well as continued competition in Internet search and search advertising. Today's commission action follows an exhaustive investigation into Google's business practices."
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.
As part of that agreement, Google will not seek court injunctions to block competitors from using Google-owned patents that are essential to key technologies used in products developed and sold by competitors, according to the FTC. Many of those patents came from the company's acquisition of Motorola Mobility in May 2012 for more than $12 billion, which included a large patent portfolio for technologies related to mobile and other consumer and business devices.
"We are especially glad to see that Google will live up to its commitments to license its standard-essential patents, which will ensure that companies willing to license these patents can compete in the market for wireless devices," said Leibowitz. "This decision strengthens the standard-setting process that is at the heart of innovation in today's technology markets."
In addition, Google also agreed to "give online advertisers more flexibility to simultaneously manage ad campaigns on Google's AdWords platform and on rival ad platforms; and to refrain from misappropriating online content from so-called 'vertical' Websites that focus on specific categories such as shopping or travel for use in its own vertical offerings," according to the FTC.
This means that Google "has agreed to remove restrictions on the use of its online search advertising platform, AdWords, that may make it more difficult for advertisers to coordinate online advertising campaigns across multiple platforms," the commission said.
Google also "will stop misappropriating—or 'scraping'—the content of its rivals for use in its own specialized search results," according to the FTC. "Google will also drop contractual restrictions that impaired the ability of small businesses to advertise on competing search advertising platforms. Google has made enforceable commitments to resolve the commission’s concerns, and these commitments have reporting requirements that will allow the commission to vigorously monitor and enforce Google's compliance."