Google's big antitrust victory: What the FTC's decision means for you
After a lengthy two-year investigation, the Federal Trade Commission elected Thursday not to pursue charges against Google for showcasing its own products in its search results over those of competitive websites. The five-member FTC commission unanimously voted to close its investigation, saying that the search giant, which dominates the U.S. search market with 70 percent of all queries, had not violated antitrust or anticompetition statutes, reports The New York Times. Here's what you should know about the FTC's decision:
What was the FTC after Google for?
Google pretty much has a stranglehold on the search market, but the company also competes in a number of other business arenas, including but not limited to: Maps, restaurant reviews, travel bookings, social networking, email, and more. Appearing higher in Google's search rankings can make or break an online business in terms of web traffic and revenue, and competitors accuse Google of unfairly spotlighting its own services on the first page of results. Microsoft, one of Google's most outspoken competitors, says Google was using its "monopolistic position to thwart rivals," hurting the business of Microsoft-owned properties like Bing and Outlook (formerly Hotmail). Google was also accused of lifting content from websites like Yelp to display information directly in its search results, thereby negating a user's need to leave Google.com.
And what did the FTC decide?
Jon Leibowitz, chairman of the FTC, says that Google's practices, save for a few small infractions, aren't really doing anything to hurt other businesses and aren't damaging enough to warrant further charges. "While not everything Google did was beneficial, on balance we did not believe that the evidence supported an FTC challenge to this aspect of Google's business under American law," he said. Not only does Google get to skip a long and expensive legal war, but the company will also retain the competitive advantage of being able to highlight products like Google+, Maps, Zagat, shopping, Gmail, etc. (For example: A search for "social networks" could place Google+ higher than, say, Facebook.)
Is anything going to change when I visit Google.com?
Nothing too major, at least when it comes to the everyday user experience. To its credit, the company is implementing a new system that allows websites to opt out of having their content "scraped" and displayed in search rankings, as in the aforementioned case of Yelp content. Another small change is Google will now have to license a few of its hardware and software patents it acquired from Motorola Mobility to other phone makers (like Microsoft).
What do tech experts think of the ruling?
Depends on who you ask, but opinions range from Google made out "pretty well" to "this is highway robbery." Tony Romm at Politico says Google escaped with not much more than a "slap on the wrist." Casey Newton at CNET echoes the sentiment while also declaring it a "major victory." In an op-ed for Gizmodo, Scott Cleland slams the ruling as egregious, and say the FTC "screwed up" the investigation completely. "If promising 240 million American consumers unbiased search when routinely and opaquely providing them with biased search is not a deceptive business practice, what is?" asks Cleland. "Is the FTC setting a new precedent here that misrepresentation actually can be net-good for consumers if accompanied with enough ancillary innovation and consumer benefits?"
So clearly Google's competition isn't happy, right?
Not at all. FairSearch.org — a coalition that includes Kayak, Microsoft, Expedia, and a number of other companies — said in a statement that "the FTC's inaction on the core question of search bias will only embolden Google to act more aggressively to misuse its monopoly power to harm other innovators." Yelp, another vocal critic, says the FTC missed an opportunity "to protect innovation in the internet economy, and the consumers and businesses that rely on it."
Does this affect the E.U.'s Google investigation?
Nope. "We have taken note of the FTC decision, but we don't see that it has any direct implications for our investigation, for our discussions with Google, which are ongoing," said Michael Jennings, a spokesman for the European Commission.
How exactly did Google pull out this win anyway?
Essentially, by studying how Microsoft lost its own antitrust probe in the 1990s and vowing not to make the same mistakes. Rather than sit by idly as the FTC carried out its investigation, Google spent $25 million out of pocket to fly its people to Washington and lobby lawmakers. Politico reports:
Instead of ignoring Washington — as rival Microsoft did before its costly monopolization trial in the 1990s — Google spent about $25 million in lobbying, made an effort to cozy up to the Obama administration and hired influential Republicans and former regulators. The company even consulted with the late Robert Bork and The Heritage Foundation and met with senators like John Kerry to make its case. In other words, these traditional outsiders worked the system from the inside.