Liz Gannes

Recent Posts by Liz Gannes

Google and FTC Get Their Deal: Company Cleared on Search Bias Claims

Google won’t have to significantly change the way it does business as a result of a two-year antitrust investigation by the U.S. Federal Trade Commission.

lets-make-a-deal-featureInstead, the FTC said today that the company had agreed to two settlements, one a consent agreement over licensing patents, and the other a resolution to stop scraping content from competitors and to give advertisers more flexibility to manage their campaigns.

Starting in Europe (where settlement talks are still open), and later in the U.S., competition agencies spent the last two years looking into complaints about Google manipulating its search results to bias its own properties, scraping vertical search engine information to show directly on its results pages, and requiring exclusivity and blocking portability in search advertising.

FTC Chairman Jon Leibowitz said today at a press conference that his agency “exhaustively” reviewed nine million pages of documents related to the case, and conducted many interviews, but “the evidence does not support a claim that Google’s prominent display of its own content on its general search page was undertaken without legitimate justification.” The commission voted unanimously to clear Google of search bias claims.

“Google’s primary reason for changing the look and feel of its search results to highlight its own products was to improve the user experience,” Leibowitz said.

Google, of course, concurred. Chief Legal Officer David Drummond wrote in a blog post today, “The conclusion is clear: Google’s services are good for users and good for competition.”

A large concern about the search deal has been the fact that it is not a standard consent decree; however, Leibowitz emphasized that the settlement includes “monitoring obligations” and is “legally enforceable and binding.”

The FTC’s search investigation was eagerly participated in by competitors such as Microsoft, Yelp and TripAdvisor, and basically everyone in technology who had anything against how Google conducts business (so, everyone in technology). But because the search resolution isn’t a formal FTC complaint, there won’t be any period for competitors to formally comment now.

Over the past 19 months, the FTC started looking into other aspects of Google, like search on Android and other mobile platforms, as well as the recently pressing issue of how to handle the patents that cover the basic shared technology for smartphones.

The FTC today led with the standards-essential patent decision, which was an important issue, but a late and somewhat awkward addition to the case, given that it is totally different. Google had walked into smartphone patent licensing because it purchased Motorola. It has now agreed to a consent order that prohibits it from seeking injunctions against willing licensees.

Independent of whether you think Google was being a big, bad, anticompetitive bully, the FTC investigation was hampered by a couple things: First, U.S. antitrust laws would have to stretch to cover cases in which it’s not clear that consumers are harmed; and second, Leibowitz, who was driving the case, would like to step down from his position soon, and so won’t be around to see a lengthy legal battle through.

Leibowitz had been trying to wrap up the case by the end of 2012, and narrowly missed that window. But the past couple weeks did not significantly change the agreement that’s been voted on, despite some people’s hopes inside and outside the FTC that the agency would wait to see what happens in Europe.

At the press conference today, Leibowitz paid tribute to the political nature of the case. He was a bit prickly about the “antitrust spin zone” driven by Google’s competition, and their charges that his agency has been weak compared to the European Commission.

“Anyone that is in the business of being the chairman of the antitrust enforcement agency, you know, would like to bring ‘the big case,’” Leibowitz said. “That’s something you want to do. More important than that is to faithfully execute the law.”


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