Google avoids antitrust suit
The Federal Trade Commission rules that its search doesn't violate U.S. laws, but the company still faces trouble abraod.
Google (GOOG) accounts for more than 66% of online searches in the U.S., but the Federal Trade Commission said Thursday that's not enough to consider it a monopoly.
An FTC investigation of Google's search business ended without a lawsuit, settlement or even a scolding. By making it easier for advertisers to switch to competitors' search engines, ending exclusive search deals with websites and no longer re-posting reviews from sites like Yelp into its own search results, Google nullified some of the harshest criticisms against it. Though the FTC believes some aspects of Google's search function are “problematic and potentially harmful to competition,” the fact that Google's latest concessions are enforceable by law helped influence the commission's decision.
"It was a unanimous decision. The reason is: it doesn't violate the American antitrust laws," said Jon Leibowitz, chairman of the FTC, at a press conference. "The facts weren't there under the law they apply to."
The FTC's probe of Google began in summer 2011 after competitors complained about it giving preference to its own Google+ social network, weather reports and business listings in Google search results. That put competitors lower on Google's search result pages and allowed a Senate antitrust committee to haul Google chairman Eric Schmidt into its chambers for questioning in September 2011. His response, which the FTC's conclusion confirms, was that competitors are always “one click away.”
Google controls about two-thirds of the U.S. search market, according online market research firm ComScore (SCOR). That, in itself, isn't illegal, but abusing that position by undermining its rivals would violate antitrust law. Since users aren't forced to conduct searches on Google and have access to any number of other search engines, travel services and product sales and ratings sites. Google's legal argument was that its search algorithm and answers is basically its "scientific opinion" protected under the First Amendement.
While the FTC says Google doesn't always stand by its “do no evil” motto when taking on rivals, it notes that the main purpose of its redesigns and new products is “improving user experience." That's all well and good in the states, but now Google has to turn around and make an even stronger argument for that claim in Europe. The European Commission concluded an 18-month investigation last spring and found that Google gave search preference to its own services, gathers content without compensating competitors who paid for it and saddles advertisers with onerous loyalty agreements.
Google faces a much tougher battle across the pond, as it accounts for 90% of all European searches and is subject to antitrust rules far more stringent than those in the U.S. Time to start searching for “diplomatic antitrust concessions.”
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