FTC clears Google on antitrust issue
The New York Times | January 04,2013
WASHINGTON — The Federal Trade Commission on Thursday found that Google had not violated antitrust or anticompetition statutes in the way it structures its Web search application — handing a big victory to the search giant in its ongoing dispute with regulators.
But the commission found that Google had misused its broad patents on cellphone technology, and ordered Google to make that technology available to rivals.
Google’s competitors, including Microsoft, have pressed vigorously for federal officials to bring an antitrust case involving its search business. Last year, an FTC staff report recommended that the commission bring such a case.
The FTC found that although Google sometimes favors its own products when producing search results with its ubiquitous search engine, its actions were “not undertaken without legitimate justification,” said Jon Leibowitz, the FTC chairman. Google agreed, however, to take certain actions to address what Leibowitz called “the most problematic business practices,” those that “relate to search in search advertising.”
The trade commission’s inquiry has been going on for at least a year and a half. Google disclosed in June 2011 that it had received formal notification from the commission that it was looking into Google’s business practices.
Google has long defended its search business, saying that it offers results that are most relevant to consumers and that the “competition is just a click away.”
It contends that users who believe a Google search is not meeting their needs can easily move to another search engine, like Microsoft’s Bing.
Google has also said that the barriers to entry into the search business are so low that it cannot abuse its market power, even though it has more than a 70 percent share of the search business in the United States.
Companies that rely on Google to drive traffic to their sites have complained that Google adjusts its search algorithm to favor its own growing number of commerce sites — including shopping, local listings and travel.
But the trade commission faced an uphill battle in proving malicious intent — that Google changes its search algorithm to purposely harm competitors and favor itself. Antitrust lawyers say anticompetitive behavior cannot be proved simply by showing that a change in the algorithm affects other websites and causes sites to show up lower in results, even though studies have shown that users rarely look beyond the first page of search results.
The commission was pressing to wrap up its case before Monday, when a new commissioner will be sworn in, a development that could have affected the result of the Google investigation. Joshua D. Wright, a professor at George Mason University, was confirmed by the Senate this week to take one of the two Republican spots on the five-member commission. Wright had previously said he would recuse himself from any Google matters for two years, because he has done work for or about the company including co-authoring a paper arguing that Google has not violated any antitrust statutes.
Wright will replace J. Thomas Rosch, a commissioner since 2006. If the Google case were not settled by Monday, the commission faced the prospect that a vote on whether to charge Google would deadlock at 2-2.
The commission voted 4-1 to settle the patent charges, and voted 5-0 to close its antitrust and competition investigation.