Google facing wide-ranging US antitrust probe

Jun 23, 2011
The US Federal Trade Commission is poised to open a formal antitrust probe into whether Internet search giant Google has abused its dominance on the Web, The Wall Street Journal reported Thursday.

The US Federal Trade Commission is poised to open a formal antitrust probe into whether Internet search giant Google has abused its dominance on the Web, The Wall Street Journal reported Thursday.

The newspaper, citing "people familiar with the matter," said the FTC is preparing to serve Google with civil subpoenas "signaling the start of a wide-ranging, formal antitrust investigation."

The Journal said the five-member commission will send Google the formal demands for information "within days" and other companies were likely to receive requests for information about their dealings with Google.

The FTC declined to comment on the report and there was no immediate response to a request for comment from the Mountain View, California-based Google.

Google, which controls around 65 percent of the lucrative US Internet search market, has been the target of numerous antitrust investigations by the FTC and the US Department of Justice in recent years.

But the Journal said the FTC's probe "is the most serious to date" in the United States because it will examine "fundamental issues relating to Google's core search advertising business."

The newspaper said the FTC probe is expected to take a year or more to unfold and "won't necessarily lead to any federal allegations of wrongdoing against the company."

Google makes most of its money from search-related advertising.

According to digital marketing firm eMarketer, Google's share of net US search advertising revenue will grow 38.9 percent this year to $10.92 billion, giving Google a 75.9 percent share of overall US search revenue.

The Journal said the probe will look at whether Google "unfairly channels users to its own growing network of services at the expense of rivals."

European Union competition watchdogs opened an investigation into similar allegations in November and the US state of Texas is also conducting a probe into whether Google abused its power in the online search advertising arena.

Two US senators, Herb Kohl of Wisconsin and Michael Lee of Utah, wrote to Google earlier this month asking that chief executive Larry Page or executive chairman Eric Schmidt attend a hearing in Washington on competition issues in Internet search.

Google proposed that chief legal officer David Drummond testify instead but the senators said in a letter to Google obtained by AFP that they would "strongly prefer" for Page or Schmidt attend the hearing.

"A hearing on this important topic would be incomplete without the direct perspective and views from one of Google's top two executives," they said.

The Senate panel could issue a subpoena compelling Page or Schmidt to testify but the senators said they would "very much prefer to work this out by agreement rather than needing to resort to more formal procedures."

Google has faced increasing scrutiny from US and European regulators as it has grown over the years from a scrappy startup into an Internet powerhouse.

According to The Wall Street Journal, the Justice Department is currently conducting an antitrust review of Google's recent $400 million acquisition of Internet advertising company Admeld.

In April, US Justice Department approved Google's entry into the online travel sector with its $700 million purchase of flight data firm ITA Software but it insisted on a number of concessions from Google.

Several online travel sites, including Expedia, Kayak and Travelocity, had sought to block the Google-ITA deal, claiming it would give Google too much control over the lucrative online travel market and lead to higher prices.

In late March, the FTC reached a settlement with Google over Google Buzz, the social networking tool rolled out last year which spawned a slew of privacy complaints.

Under the settlement announced by the US regulator, Google is required to implement a comprehensive privacy program and will be subject to independent privacy audits every two years for the next 20 years.

Also in March, a US judge dealt a setback to Google's plans for a vast digital library and online bookstore, rejecting a copyright settlement hammered out by the Internet giant with authors and publishers.

In 2008, Google abandoned a plan to forge a joint search advertising partnership with Yahoo!, citing a desire to avert a "protracted legal battle" with US regulators.

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User comments : 12

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Tenche
3.9 / 5 (7) Jun 23, 2011
I trust Google more than I trust my own government.
Shelgeyr
1 / 5 (1) Jun 23, 2011
I'll admit to being more than just a little surprised.

Google has been such a strong supporter of the current administration that I'm astonished the FTC was allowed to go after them.

I'm going to shy away from taking sides on this one, at least for now. I am, however, tempted to quote Mercutio (Romeo and Juliet) on the matter.
erikreinertsen
4 / 5 (8) Jun 23, 2011
Google's been way more useful than any other entity, industry rival or government, to the average consumer.
Telekinetic
1 / 5 (2) Jun 23, 2011
Google should just bankroll a few "competitors", cut their connections with them and keep sailing along.
BillFox
2.7 / 5 (3) Jun 23, 2011
Google simply has too much technical how-to and financial support to not take advantage of some lucrative possibilities. Look how they take every oportunity to gather and sort data, some of which has gotten them in trouble in the past (streetview vehicles gathered up all unencrypted wireless traffic until they got caught.) Remember the privacy outcry with google buzz? What about all the people who's email was compromised by the NSA backdoor into gmail by some hackers? Google is only BIG, not necessarily the most ethical business. Data is money to them, and already proven in the past they will skim extra data/money when given a chance, then lie about it being a malfunction. Sure google is the greatest thing ever and they do some truly innovative things, but keep in mind business products and business ethics don't usually provide a good measure of the other.
NANOBRAIN
not rated yet Jun 23, 2011
Who ever controls the internet controls the world!
blazingspark
5 / 5 (1) Jun 23, 2011
Meh, I get sceptical when I hear about stuff like this. I wonder what is really going on in the background.

Theres always a larger game being played that the public don't get to see. No - I'm not talking about some crazy nwo conspiracy. Mostly just simple human greed and political power plays.

When elephants dance; the grass gets trampled.
BrusierTDS
1 / 5 (1) Jun 24, 2011
I agree with the first comment. I trust Google more than my own government as well. It seems as though most everyone in the government and most agencies are corrupt.

I don't understand how we can let our government step in because a company was so successful that they took over a majority of the market. Congratulations to them is what I say!
PS3
1 / 5 (1) Jun 24, 2011
This is just Microshaft being jelly.
KomMaelstrom
not rated yet Jun 24, 2011
I'm not exactly worried about my privacy. I would suppose most of their reasons for gaining monetary power is for collecting the world's intelligent and advancing technology. Aside from technology, what good is money anyway?
I would also trust Google's motives far more than my governments.
jimseo
not rated yet Jun 24, 2011
Internet the the future of the world. There is no surprise if we see Google offices across every single nook and corner of this country.
abhishekbt
not rated yet Jun 27, 2011
I know they all have their dark sides, but when it comes to Privacy I trust Google more than any other site, even Facebook.

The image that Google has maintained and so many people mentioned before me as trustworhty is something you cannot get in a day.

I bet Google wouldn't do anything so drastic so as to throw away this trust.