FTC Ends Google Anti-Trust Investigation
The U.S. Federal Trade Commission (FTC) decided to end what was anticipated to become the anti-trust investigation of the decade on Google, and mostly leave the search giant alone. But the FTC did win some promises from the Mountain View based Internet giant on how it would behave in three fields: online ads, scraping content from competitor websites, and standards-essential patents.
In a detailed FTC press release, the government free-market watchdog explained how its belief that Google didn’t fundamentally harm competition in the markets that it was a major player in. Beth Wilkinson, outside counsel to the Commission, was quoted as saying, “The evidence the FTC uncovered through this intensive investigation prompted us to require significant changes in Google’s business practices. However, regarding the specific allegations that the company biased its search results to hurt competition, the evidence collected to date did not justify legal action by the Commission… Undoubtedly, Google took aggressive actions to gain advantage over rival search providers. However, the FTC’s mission is to protect competition, and not individual competitors. The evidence did not demonstrate that Google’s actions in this area stifled competition in violation of U.S. law.”
Google also posted a statement on its own blog site, stating that “The conclusion is clear: Google’s services are good for users and good for competition… As we made clear when the FTC started its investigation, we’ve always been open to improvements that would create a better experience.”
At the same time, the FTC does appear to have won some changes on some items from Google, specifically in three areas:
- Standards-essential (FRAND/RAND) patents: Google had acquired Motorola Mobility and its trove fo 17,000-plus patents to protect itself against aggressive lawsuits by Microsoft and Apple against the Android operating system made by Google. There were concerns that some of the patents that Motorola was using in its patent offense-defense warfare were standards-essential to communications, also known as FRAND. In its release, the FTC stated that “Google has agreed to a Consent Order that prohibits it from seeking injunctions against a willing licensee, either in federal court or at the ITC, to block the use of any standard-essential patents that the company has previously committed to license on FRAND terms.”
- Allowing advertisers to easily use competitive online ad platforms: The FTC said that “under a separate commitment, 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.” A vast majority of Google’s revenues come from online advertising, and the search giant is also one of the market leaders in online advertising with its plethora of online advertising products, particularly AdWords. There was concern that Google was making it hard for advertisers to place ads on multiple ad networks not belonging to Google. With this agreement, it appears that Google will make it easier for advertisers and their agencies to export Google ad campaigns to other ad networks, thus reducing work for advertisers.
- Search competition: Regarding the hotly debated topic of search competition, the FTC noted “The FTC conducted an extensive investigation into allegations that Google had manipulated its search algorithms to harm vertical websites and unfairly promote its own competing vertical properties, a practice commonly known as “search bias.” In particular, the FTC evaluated Google’s introduction of “Universal Search” – a product that prominently displays targeted Google properties in response to specific categories of searches, such as shopping and local – to determine whether Google used that product to reduce or eliminate a nascent competitive threat. … the FTC concluded that the introduction of Universal Search, as well as additional changes made to Google’s search algorithms – even those that may have had the effect of harming individual competitors – could be plausibly justified as innovations that improved Google’s product and the experience of its users. It therefore has chosen to close the investigation.”
Most of the reactions to the FTC announcement were mild, though some bloggers felt that Google had gotten off lightly.
Microsoft, a big competitor to Google on almost all fronts, posted a blog post titled “The FTC and Google: A Missed Opportunity” lamenting that the FTC had missed an opportunity to thoroughly investigate Google and what it called its “anti-competitive” practices. But the TechNet blog comments ended up being an area for people to vet their displeasure with what they saw as Microsoft’s own anti-competitive practices. In addition, tech blog ReadWrite pointed out that the FTC action–or lack thereof–reflected badly on Microsoft, which itself had sunk in close to $50 million in setting up political groups and legal entities to trip up Google and push the FTC to start an anti-trust investigation.
For now, it appears that little will change in the digital world, save for any action that the EU might take in its continuing investigation on Google. So while one chapter has closed, Google is still not completely out of the woods yet.