Google Antitrust Investigation Coming to a Close, Opponents Already Working the Refs

Several news reports suggest that, after a wide-ranging 19-month investigation of Google’s business practices, the Federal Trade Commission is near to closing its investigation of Google. Early reports also suggest that the FTC found that Google’s business practices did not harm consumers or violate applicable antitrust laws. Specifically, the FTC seems to have rejected the Google competitors’ core antitrust arguments: that Google uses its search algorithm to preference its own products over that of its rivals. Politico this weekend reported that Google will be making some voluntary commitments regarding use of snippets, and AdWords-exclusivity arrangements. At the same time, the FTC and Google are also settling a (somewhat different) matter regarding whether Google can seek injunctions when it asserts “standard-essential” patents.

The coalition of competitors lobbying for an FTC investigation and seeking a federal antitrust case, called FairSearch, is already expressing disappointment. Last week, the coalition, which includes Microsoft, Foundem, and Hotwire, started asking the Department of Justice to repeat all the FTC’s work and start a new investigation of Google. Today, FairSearch issued a statement to the effect that the FTC was failing on the job unless it takes action “to permanently end Google’s biased display of search results.” It has also argued that “voluntary commitments” aren’t enforceable.

FairSearch’s words and actions reflect a little desperation. There is almost no way the DOJ would repeat the FTC’s lengthy investigation: our nation has two antitrust agencies who split rather than repeat the immense work of antitrust enforcement. It’s not a legal gauntlet, where companies must survive one antitrust agency after another, applying the same law. The FTC heard the complaints of Google’s competitors and it investigated them. Just because FairSearch failed to persuade the FTC does not mean that it should have another opportunity, with the same law and facts, at a different antitrust agency. Plus, to the extent that Google might be adopting some voluntary commitments, the FTC could enforce them under their strongest source of jurisdictional power: the FTC can act against deceptive practices. If Google even “voluntarily” commits to certain actions in the market and doesn’t abide, the FTC would have a stronger case than it would have under “unfairness” or even traditional antitrust principles. If we were talking about a different agency, I’d be more skeptical, but the FTC is not shy about going after such deception.

It is not surprising that the FTC rejected the search-bias arguments. As we, and others, have explained (see here and here), those arguments were evidently flimsy as a matter of fact and as a matter of law. For example, there is no way to define a “neutral, unbiased” search algorithm. The point of a search engine is to discriminate in favor of particular results for particular users, even if every website wishes to be listed first. A technical committee or government agency could not easily enforce search “neutrality.” Google’s competitors, like Bing, engage in the same practices. And consumers appear to benefit from many of the activities about which the competitors complain. FairSearch made its best case on search-bias, in public and private, and it was not a strong one.

I am looking forward to seeing the full details when the settlement is announced. I have written quite a bit about the antitrust investigation; I’ve focused on the issues of search “bias,” snippet-use and fair use, and transparency, each of which will be the topic of much discussion in tech and antitrust circles.

I haven’t written very much about the patent issues yet, but hope to do so soon.

Also–as readers of this blog are aware–Google is a client of my law firm on a range of issues, and  I have advised them during the FTC investigation. These thoughts are mine, and shouldn’t be attributed to anyone else, including Google.

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