Google’s settlement with the Federal Trade Commission is continuing to draw a mixed reaction from around the tech industry, with some trade associations applauding the agreement while Google competitors, including Microsoft, blasted it as weak and ineffective.
In addition, regulators in Europe said the settlement—in which Google officials agreed to change its business practices, but escaped fines or other penalties from the FTC—would have no impact on their own antitrust investigation of the giant search engine.
The FTC’s 19-month investigation of Google ended Jan. 3, when the two sides announced a settlement in which Google officials agreed to end past business practices that could stifle competition in the fast-growing market for connected mobile devices, such as smartphones and tablets, as well as game consoles. The regulators also closed their investigation into complaints that Google used its search algorithms to unfairly favor its own products over those of competitors, citing a lack of evidence to support the charges.
Google officials agreed to ensure that competitors get fair access to patents to technologies found in mobile devices, and that they will work to resolve patent disputes through neutral third parties before seeking injunctions to halt that sale of competitors’ products.
Regarding the allegations over search results, Google officials said they would no longer use data from the Websites of competitors to bolster its own products, and that advertisers will now have greater freedom in where they use copy from advertising campaigns.
Google applauded the agreement, with David Drummond, senior vice president and chief legal officer, saying in a Jan. 3 blog post that it was a win for the company. “The conclusion is clear: Google’s services are good for users and good for competition,” Drummond wrote.
Ed Black, president and CEO of the Computer and Communications Industry Association (CCIA), said the FTC did a good job adapting to the changing realities of the Internet.
“As this investigation illustrates, the market for answering consumers’ questions is dynamic and changing rapidly,” Black said in a statement. “Traditional search engines are just one part of this expanding ecosystem. Locking Google or any company into a 1998 version of Web search would have harmed users and sent the wrong signal to companies looking to evolve their business models to effectively compete in the rapidly evolving Internet marketplace.”
Not surprisingly, competitors like Microsoft and Yelp saw the agreement differently. They had been hoping for a larger antitrust case to be brought against Google, accusing the company of using its search engine dominance to unfairly hinder competition. Dave Heiner, vice president and deputy general counsel for Microsoft, sharply criticized the FTC and the agreement.
“We find it troubling that the agency did not adhere to its own standard procedures that call for the agency to obtain industry input on proposed relief and secure it through an enforceable consent decree,” Heiner wrote in a Jan. 3 blog post. “The FTC’s overall resolution of this matter is weak and—frankly—unusual. We are concerned that the FTC may not have obtained adequate relief, even on the few subjects that Google has agreed to address.”
He noted a number of areas of concern, from keeping advertisers from using “data about their own advertising campaigns on any ad platform other than Google’s,” to how it made it difficult for competitors to use its “standard essential patents available to all firms on fair, reasonable and nondiscriminatory [FRAND] terms.”
The FTC also did nothing regarding search results bias, or Google preventing Microsoft from offering its YouTube app for Windows Phone, something that is available on Google’s Android and Apple’s iOS operating systems, Heiner said.
“The good news is that other antitrust agencies, within the United States and overseas, are still examining Google’s conduct,” he said.
Google’s FTC Settlement Criticized by Rivals Microsoft, Yelp
In an email to Reuters, Yelp spokesman Vince Sollitto said that the “closure of the commission’s investigation into search bias by Google without action … represents a missed opportunity to protect innovation in the Internet economy. We look for the regulatory bodies continuing their investigation to have greater success.”
Michael Jennings, a spokesman for the European Commission—the European Union’s antitrust arm—told Reuters that regulators there “have taken note of the FTC decision, but we don’t see that it has any direct implications for our investigation, for our discussions with Google, which are ongoing.”
European regulators have been looking at Google’s practices for two years, and are asking for the search giant to offer ways to settle the investigation. Google had come up with preliminary proposals in July.
During a conference call with journalists Jan. 3, FTC Chairman Jon Leibowitz said that there was not enough evidence to support the allegations that Google’s algorithms unfairly favored Google results over those of competitors.
“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,” Leibowitz said, adding that the agency “did not believe that the evidence supported an FTC challenge to this aspect of Google’s business under American law.”
Microsoft and others appeared to have been expecting a regulatory battle similar to the software giant’s lengthy landmark case with the Department of Justice more than a decade ago. However, the relatively short investigation by the FTC may be a sign that things have changed since the Microsoft case, according to Gartner analyst French Caldwell.
“Wow—less than two years to settle the Google antitrust case,” Caldwell wrote in a Jan. 3 blog post. “Remember the Microsoft antitrust case—it seemed to drag on forever. One difference here is that the Google case was handled by the FTC, which has become the de facto consumer information technology industry regulator.”
The CCIA’s Black indicated that the FTC’s process was preferable to what has been done in the past.
“The FTC’s decision not to proceed with a search case against Google was the right call,” he said. “Over the course of its far-reaching 19-month investigation, the FTC thoroughly reviewed the facts and the applicable law and made its decision accordingly. This is exactly how law enforcement is supposed to work. This was a prudent decision by the FTC that shows that antitrust enforcement, in the hands of responsible regulators, is sufficiently adaptable to the realities of the Internet age.”
