April 24, 2024

F.T.C. Is Said to Have Begun a New Inquiry on Google

People who have been contacted in connection with the inquiry said that the F.T.C. had begun asking questions about Google’s practices, specifically whether the company was bundling advertising services together in a way that prohibited rivals from competing for the business of advertisers.

The F.T.C. said in December 2007 that it would monitor Google’s practices in that area. At that time, the commission found that Google’s proposed acquisition of DoubleClick, an online advertising company that specialized in display ads, was “unlikely to substantially lessen competition.”

“We want to be clear, however,” the F.T.C. wrote at the time, “that we will continue to watch these markets and, should Google engage in unlawful tying or other anticompetitive conduct, the commission intends to act quickly.”

Officials at the F.T.C. and Google declined to comment Friday on the possibility of a new inquiry, which was first reported Thursday evening by Bloomberg News. One person close to the matter, who spoke on the condition of anonymity because the inquiry is in its early stages, said the F.T.C. had not yet contacted Google about a new antitrust inquiry.

Another person who has been briefed on the F.T.C.’s work said that the commissioners themselves had not approved the issuance of subpoenas or civil investigative demands, which would be part of any formal investigation.

The F.T.C. closed an antitrust investigation of Google’s search business less than five months ago, voting unanimously not to proceed with an antitrust case after months of pressure from Google’s rivals.

That investigation focused on how Google’s search engine presented results of consumer queries, and whether the company purposely gave higher rankings and more prominent display to results that featured its own businesses.

In the new inquiry, according to a person in the advertising business who said he was contacted by the F.T.C., commission staff members asked about Google’s practices in providing, or serving, advertisements to customers’ Web sites and about the practices of its Ad Exchange, where companies bid on opportunities to aim at certain consumers with ads.

F.T.C. officials were interested in whether Google was tying one application to another by offering below-cost pricing in exchange for a customer’s guarantee not to buy ads through Google’s competitors, the person said.

At the time it approved the DoubleClick deal, the F.T.C. said it also would monitor issues concerning consumer privacy, including whether the collection of information from one part of Google’s business — for example, its search operation — was being used in its other units to unfairly exploit its size and drive rivals from the market.

Article source: http://www.nytimes.com/2013/05/25/technology/ftc-said-to-have-begun-new-inquiry-on-google.html?partner=rss&emc=rss

F.T.C. Is Said Near a Move on Google

For several months, lawyers at the commission have gathered information about Google’s search and advertising business and whether the way it orders search results and related advertising constitutes illegal anticompetitive behavior.

This month, commissioners privately debated whether to authorize its Bureau of Competition to issue subpoenas to Google and are close to moving forward. As of Thursday afternoon, commission formalities remained before the investigation is officially started, but two people with knowledge of the matter said a final decision to issue the subpoenas was imminent in a matter of days. They agreed to speak only on the condition of anonymity because the action was not yet final and because it could be postponed if the commission required additional information.

The commission’s action was first reported online by The Wall Street Journal on Thursday. Spokesmen for Google and the Federal Trade Commission declined to comment.

Google has been the subject of repeated antitrust inquiries in recent years, most of them involving proposed acquisitions. In the United States, the Federal Trade Commission and the Justice Department have conducted reviews of Google’s acquisitions of the Internet advertising companies DoubleClick and AdMob.

More recently, the Justice Department reviewed Google’s purchase of ITA Software, a travel services company. In that case, the government cleared the merger only after Google agreed to conditions and continuing government monitoring. Just this month, the Justice Department began an investigation into Google’s $400 million acquisition of Admeld, which provides advertising services to publishers.

In 2008, the Justice Department also blocked a proposed advertising pact between Google and Yahoo because of concerns about its effect on competition. Last year, it also opposed a sweeping court settlement between Google and publishers and authors, in part because the agreement would have given Google too much power over the market for digital books.

But unlike those cases, which affected only small portions of Google’s business, the current investigation focuses on Google’s main business: Internet search and advertising. If it leads to charges against the company, its impact could be more far reaching, according to antitrust experts.

“This is the main act,” said Ted Henneberry, a former trial lawyer at the Justice Department and partner at Orrick Herrington and Sutcliffe.

If Google is found to have abused its dominant position in Internet search and advertising, the F.T.C. would not levy fines. But it has the authority to issue cease-and-desist orders for violations of the trade commission act, and it can also file a lawsuit seeking a preliminary injunction against certain behaviors. The Justice Department and the F.T.C. share jurisdiction over antitrust issues. But as a matter of practice they alternate as to which agency takes the lead in an investigation.

Critics of Google have been pushing for a broad antitrust investigation into the company’s search business, where it controls about two-thirds of the market in the United States. In the past, company executives have said that the increased scrutiny from regulators is a normal byproduct of its success.

Addressing its search results specifically, company officials say that its ranking decisions are made to benefit users and that, as with any ranking system, some parties will be unhappy with their placing.

The company’s market share has remained steady in recent years. According to the research firm comScore, Google controlled 65.5 percent of the market in May; Yahoo had 16 percent and Bing had 14 percent.

Last year, the European Commission opened its own antitrust investigation into Google’s search business, after complaints from smaller companies, which claimed that Google downgraded their sites in its search results while giving favor to its own Web services. That investigation is pending.

By making a site more or less likely to rise to the top of its search results, Google theoretically could affect how much traffic a Web site got and therefore how much it could charge for advertising. If another company’s Web site for, say, a travel service, competes with an ancillary business of Google’s, manipulation of search results could be considered anticompetitive.

Google’s main search-advertising business accounts for most of the company’s revenue, which totaled $29.3 billion last year.

FairSearch.org, an organization that represents several of Google’s critics including the Web sites Expedia, Travelocity, Kayak and Microsoft, said it was encouraged by reports of the F.T.C. inquiry.

“Google engages in anticompetitive behavior across many vertical categories of search that harms consumers,” the organization said in a statement. “The result of Google’s anticompetitive practices is to curb innovation and investment in new technologies by other companies.”

According to comScore, Google in May became the first company to have one billion unique visitors to its site in one month, a rate that was up 8 percent over a year earlier. Google’s share price is down 19 percent since the beginning of the year.

Edward Wyatt reported from Washington, and Miguel Helft from San Francisco.

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