As Expected, FTC Announces Close Of Google Investigation With No Antitrust Charges, But Minor Tweaks To Biz Practices

Legal Issues

from the no-surprise dept

It appears that the rumors from last month were entirely accurate. The FTC more or less has admitted that it can’t find any real antitrust problems with Google, but did get Google to agree to a few minor tweaks in how it operates — which lets the FTC declare victory. On the big question of antitrust, however, which Microsoft and other sites led the charge on, the FTC came up completely empty, noting that the goal Google’s practices was, in fact, to offer a better consumer experience, rather than to be anti-competitive.

The biggest “change” to Google’s business practices is really from an issue they inherited: the handling of Motorola’s standards essential patents. We were among those confused by Google’s decision a year ago to continue Motorola’s more aggressive practices with its standards essential patents, basically trying to get injunctions to block competitors who don’t license at the (way too high) rates that Motorola was offering. This made no sense to us at the time, given Google’s previous statements about the problems of the patent system. Here was a case where they had a chance to put their words into further action, and they didn’t. And that became the biggest part of the FTC settlement. Seems like Google could have avoided a headache just by backing down initially. Either way, even the “settlement” aspect here is really small. Google has agreed that before seeking an injunction, it’ll go to arbitration to determine what is a “fair and reasonable” royalty on those patents. To be honest, this seems like the kind of thing that Google was probably perfectly happy to “cave” on — and it almost makes you wonder if they kept up Motorola’s practices just to give the FTC some “red meat” to make FTC boss Jon Liebowitz happy.

There were a few other small changes, such as allowing sites to opt out of just Google News if they don’t like traffic. In the past, sites had to opt out of all Google search if they didn’t want to appear in Google News — and some incredibly shortsighted news publications didn’t like that. So, basically, now Google is giving them the ability to hurt their own traffic from Google News if they so choose. Also, Google will allow companies to more easily manage ad campaigns across multiple platforms, rather than effectively making them repeat the process for multiple platforms.

The end result here, even as the FTC declares victory, has to be seen as a big victory for Google. It made a few tweaks to its business practices — most of which it probably should have done anyway (and some of which I think it should go even further on). And on the big question of “antitrust” and “search bias” the FTC came up totally empty — even as FTC boss Liebowitz made it clear that he would have loved it if breaking up Google’s monopoly was his legacy. As the FTC announcement notes, try as hard as they could, they just couldn’t make the claim stick. I love the begrudging language they use here:

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. Similarly, the investigation focused on the allegation that Google altered its search algorithms to demote certain vertical websites in an effort to reduce or eliminate a nascent competitive threat. According to the Commission statement, however, 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.

In the end, this seems like a massive waste of taxpayer money and the FTC’s time and resources. While the announcement claims they got Google to agree to “significant” changes in its business practices, that’s a laughable claim when you look at the details.

Filed Under: antitrust, bias, ftc, injunctions, jon liebowitz, patents, search, search bias, search neutrality, standards essential patents
Companies: google