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Google Settles US Anti-Trust Investigation with FTC

by Glen Shapiro,, New York

09 January 2013

In contrast to orders imposed on Google Inc. over the past two years concerning its privacy policy in the United States, the Federal Trade Commission (FTC) has closed its 19-month antitrust investigations, without the company having to make any major concessions on how it runs its internet search engine.

With a competition ruling still awaited in the European Union and the latter’s investigators also being involved in the FTC’s decision, Google has secured what is being seen as a victory. The FTC has decided to take no action following its investigations conducted into allegations that Google biased its search results to disadvantage certain vertical websites and that it entered into anti-competitive exclusive agreements for the distribution of Google Search on both desktops and mobiles.

Its Chairman Jon Leibowitz said that FTC’s non-action follows an exhaustive investigation into Google’s business practices, during which FTC staff received over 9m pages of documents from Google and other parties, and interviewed numerous industry participants.

"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,” added Beth Wilkinson, outside counsel to the FTC.

"Undoubtedly, Google took aggressive actions to gain advantage over rival search providers,” she continued. "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 US law."

Leibowitz confirmed the FTC found that "the evidence does not support a claim that Google’s prominent display of its own content on its general search page was undertaken without legitimate justification. But we do accept Google’s binding commitment to stop the most problematic business practices relating to its search and search advertising business."

Google has agreed to give advertisers more flexibility to manage simultaneously ad campaigns on Google’s AdWords platform and on rival ad platforms; and to refrain from misappropriating online content from so-called "vertical" websites that focus on specific categories such as shopping or travel for use in its own vertical offerings.

On its official blog, Google said that "the FTC and the other authorities that have looked at Google's business practices - including the US Department of Justice, the US courts and the Brazilian courts - have concluded that we should be free to combine direct answers with web results.”

Leibowitz concluded that the FTC’s action brings to an end its investigations of Google "in a fashion calculated to bring the maximum relief to American consumers in a timely way. It is good for consumers, it is good for competition, it is good for innovation, and it is the right thing to do.”

On a separate matter, the FTC did obtain Google’s commitment, following its USD12.5bn acquisition last year of Motorola Mobility (MMI) that included MMI’s portfolio of over 24,000 patents and patent applications, to allow competitors access – on "fair, reasonable and non-discriminatory" terms – to patents on essential standardized technologies needed to make popular devices such as smart phones, laptop and tablet computers, and gaming consoles.

The FTC’s judgment in that respect is intended to ensure that Google does not use MMI’s patents to block competition from devices running on software other than Google's Android system, from, for example Apple and Microsoft.

TAGS: compliance | business | patents | commerce | law | agreements | internet | e-commerce | United States | standards

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