In Victory for Google, U.S. Ends Antitrust Investigation

Mladen Antonov/Agence France-Presse — Getty Images

Jon Leibowitz, the F.T.C. chairman, said Google's search engine actions were "not undertaken without legitimate justification."

By EDWARD WYATT

Published: January 3, 2013 26 Comments

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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.

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Daryle W. Hier

@NostalgiaDr

With a wink and a nod, Administration lets Google off the hook http://t.co/0k7E3nns

3 hours ago ·

 

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Comments from the F.T.C.'s Jon Leibowitz


• U.S. Escalates Google Case by Hiring Noted Outside Lawyer (April 27, 2012)

• Onetime Allies in Antitrust Part Ways Over Google (December 17, 2012)

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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 F.T.C. staff report recommended that the commission bring such a case.

The F.T.C. 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 F.T.C. chairman.

Google agreed, however, to take certain actions to address what Mr. Leibowitz called “the most problematic business practices relating to its search and  search advertising business.”

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 Web sites 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. Mr. 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.

Mr. 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.

“The F.T.C.’s credibility is eroded when confidential details of internal discussions are revealed to the media, as has continually been the case in the investigation of Google,” Senator Ron Wyden, Democrat of Oregon, said in a Nov. 26 letter to Mr. Leibowitz, the commission chairman. Mr. Wyden also said there was plenty of evidence that adequate competition exists in the search business. He cited the recent introduction of competitors like DuckDuckGo, which has a no-tracking privacy policy inspired by some consumers’ complaints about the tracking of consumer behavior that Google and other search engines perform.

“Compared to almost any other market in the history of antitrust regulation, online search has effectively zero barriers to entry,” Mr. Wyden said.