Google Reaches Deal with FTC, Ending Antitrust Investigation

1:04 PM PST 01/03/2013 by Eriq Gardner
Google

U.S. government's competition regulator gives the Web giant a passing grade on search.

Google has successfully navigated one of the bigger antitrust clouds hanging over its business.

The Federal Trade Commission announced on Thursday the result of an investigation that will cause the web giant to modify some of its practices. But in a big win for Google, the FTC said that the company hadn't unfairly manipulated its web search product to favor its own services.

"The evidence the FTC uncovered through this intensive investigation prompted us to require significant changes in Google’s business practices," said Beth Wilkinson, outside counsel to the Commission in a statement. "Undoubtedly, Google took aggressive actions to gain advantage over rival search providers. However, the FTC’s mission is to protect competition, and not individual competitors. The evidence did not demonstrate that Google’s actions in this area stifled competition in violation of U.S. law.”

In June, 2011, Google disclosed that it had received notification that the FTC had opened up an investigation. The company then attempted to mollify regulator concerns. In a letter of commitment to the Commission, Google has agreed to some changes in its practices, including allowing more flexibility in giving online advertisers the ability to simultaneously manage ad campaigns on Google’s AdWords platform and on rival ad platforms. Google also committed to not scraping online content from “vertical” shopping and travel websites for its own offerings.

FTC Chairman Jon Leibowitz  has also outlined the terms of a settlement agreement that Google has agreed upon.

One of the biggest concerns for the FTC was Google's $12.5 billion acquisition of Motorola Mobility, which included the company’s portfolio of over 24,000 patents and patent applications. The patents were seen as essential to wireless and internet-related standards allowing for interoperability, but the Commission noted that setting a standard can have the effect of giving market power to the owner of a patent. This was a concern since some of the technologies were integral to the development of smart phones, gaming systems, and tablet computers.

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“We are especially glad to see that Google will live up to its commitments to license its standard-essential patents, which will ensure that companies willing to license these patents can compete in the market for wireless devices,” said Leibowitz.

Google officials were pleased with the development.

In a blog post, Google's chief legal officer David Drummond wrote, "We’ve always accepted that with success comes regulatory scrutiny. But we’re pleased that the FTC and the other authorities that have looked at Google's business practices...have concluded that we should be free to combine direct answers with web results. So we head into 2013 excited about our ability to innovate for the benefit of users everywhere."

Google is still facing action from the European Union's own antitrust regulators, but has recently made progress on resolving that front as well.

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Not everyone will be happy with the settlement.

In advance of Thursday's announcement, Dave Heiner, Microsoft’s deputy general counsel, wrote in a blog post, "Hopefully, Google will wake up to a new year with a resolution to change its ways and start to conform with the antitrust laws. If not, then 2013 hopefully will be the year when antitrust enforcers display the resolve that Google continues to lack."

E-mail: eriq.gardner@thr.com; Twitter: @eriqgardner

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