Google-FTC Settlement

According to Bloomberg, Google and the Federal Trade Commission will resolve an antitrust probe today after a 20 month investigation

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Today’s news reports outline the terms of their proposed settlement agreement. The agency focused on areas where Google can improve voluntarily (such as ad campaign portability and its use of third-party text snippets), while entering a consent decree on patent practices that stem from the company’s acquisition of Motorola Mobility.

It appears that the FTC properly listened to the concerns raised by Google’s competitors, including Microsoft and others. Those competitors flung many allegations, but emphasized particularly weak arguments about how Google displayed its search results. After analyzing the law and the facts, according to reports, the FTC concluded there was no case against Google on these search-issues.

Over the past year, my law firm and I have advised Google on the probe. Both Luke Pelican and I have written extensively about the weaknesses of arguments made against Google — from the undefined notion of search neutrality to some of the copyright and fair-use concerns related to the use of “snippets.” We also explained why the remedies proposed by Google’s competitors–including breaking Google up into multiple companies and having a government technical committee oversee its search algorithm–were conceptually flawed and would harm not only Google but also consumers and innovation. We recently wrote an overview of the patent issues.

Microsoft and FairSearch are already complaining that the FTC went easy on Google.

I reach the opposite conclusion. Competition is a contact sport. Promoting competition is our national economic policy: we encourage competition because it benefits consumers with innovation, low prices, and choice. But even contact sports have legal and illegal hits. The role of antitrust law is to make sure every competitive tackle is fair–that a competitor is hitting hard but not engaged in the equivalent of “roughing the passer” or “unnecessary roughness.” Antitrust law does this by imposing obligations on (legally defined) monopolies when they engage in “exclusionary conduct”–competition that goes beyond legality.

Google’s competitors have been complaining to the refs–not for late or dirty hits but for clean, solid hits during ongoing plays. There’s nothing illegal about hitting hard. The refs shouldn’t call a foul just because Microsoft complains. Meanwhile, the agreements reached today (on issues other than search-neutrality) may do consumers some good.

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