Regulators eye Google in Argentina, South Korea

Apr 29, 2012
Google makes most of its money from search-related advertising
Google has confirmed that its online search and advertising services are under scrutiny by regulators in Argentina and South Korea.

Google's online search and advertising services are under scrutiny by regulators in Argentina and South Korea, the company has confirmed.

Word of the probes came a day after the US Federal Trade Commission revealed it hired former Justice Department prosecutor Beth Wilkinson to head an investigation into whether Google abused its dominance in online search.

"We are delighted to have someone of her caliber helping us on such an important matter for the Commission," FTC bureau of competition director Richard Feinstein told AFP.

Wilkinson's formidable legal track record includes being a lead prosecutor on the team that convicted Timothy McVeigh in connection with the 1995 bombing of a federal building in Oklahoma City.

Last year, US regulators launched a probe into Google's lucrative search and advertising business in a move that could pose the most serious legal challenge yet to the Internet giant.

The Mountain View, California-based company confirmed the FTC inquiry in a blog post at the time and expressed confidence it could withstand the scrutiny.

A line in Google's most recent quarterly report stated that Argentina's National Commission for the Defense of Competition and South Korea's Fair Trade Commission have opened investigations "into certain business practices."

The inquiry focused on Google in South Korea started last year, the company said, adding that it continues to cooperate with regulators there.

"The Argentinian Competition Commission notified us that they are conducting a preliminary inquiry into our search and search advertising services, and we are of course happy to answer their questions," Google said.

"Because competition on the Internet is just one click away and since using Google is a choice, we work hard to put our users' interests first."

As it has grown from a scrappy startup into an Internet titan, Google has branched out into various businesses, including online mapping, shopping, travel and providing operating systems for mobile phones and tablet computers.

But Google makes most of its money from search-related advertising and that is why investigations targeting its core business are seen by analysts as a potentially serious risk to the company.

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

Earlier this month, US government telecom regulators ended an investigation into Google's "Street View" online mapping service gathering data from private wireless hotspots.

The Federal Communication Commission (FCC) enforcement bureau called for Google to pay a $25,000 penalty for stalling the probe but said that it could not accuse the Internet giant of breaking US law.

"We worked in good faith to answer the FCC's questions throughout the inquiry, and we're pleased that they have concluded that we complied with the law," Google spokesperson Niki Fenwick said.

The FCC began the investigation in late 2010 after Google announced that Street View cars taking photographs of cities in more than 30 countries had inadvertently gathered data sent over unsecured Wi-Fi systems.

Information sucked up by passing Street View cars included passwords, emails, and other data that was being transmitted wirelessly over unprotected routers, according to the FCC.

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