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    FTC’s Antitrust Investigation of Google Ends With Little Cost to Internet Services Giant

    The Federal Trade Commission has been investigating Google on antitrust and anti-competition issues for about two years, and the agency’s investigation has ended in what can only be called a victory for the Internet services giant. The FTC says that it has a reached a settlement with Google where the company “has agreed to change some of its business practices to resolve Federal Trade Commission concerns that those practices could stifle competition in the markets for popular devices such as smart phones, tablets and gaming consoles, as well as the market for online search advertising.” But the changes are minimal and fall far short of what critics say Google should be required to do. And the agency has ruled that Google has not violated antitrust or anti-competition rules with its Web search results, which highlight Google’s services. The FTC says:

    Under a settlement reached with the FTC, Google will meet its prior commitments to allow competitors access – on fair, reasonable, and non-discriminatory terms – to patents on critical standardized technologies needed to make popular devices such as smart phones, laptop and tablet computers, and gaming consoles. In a separate letter of commitment to the Commission, Google has agreed to give online advertisers more flexibility to simultaneously manage ad campaigns on Google’s AdWords platform and on rival ad platforms; and to refrain from misappropriating online content from so-called “vertical” websites that focus on specific categories such as shopping or travel for use in its own vertical offerings.

    In its reporting of the settlement, the New York Times notes: “By allowing Google to continue to present search results that highlight its own services, the F.T.C. decision could enable Google to further strengthen its already dominant position on the Internet. […] Web search has become vital to the success of many businesses. Being ranked higher in search results can mean a great deal more traffic and revenue; being ranked lower can hurt both. Google has long claimed that it uses a neutral algorithm for search queries, something that competitors disputed.”

    The Washington Post points to vagueness in consumer harm standards, which it says affected the FTC’s decision on Google: 

    The murky standards for establishing consumer harm ultimately undermined the case for forceful action on the most serious charges — that Google was manipulating search results to benefit its own products while hurting competitors and limiting choice.

    That drained energy from what once appeared to be an aggressive FTC push against Google, leading to modest concessions that are unlikely to be noticed by most of the search engine’s hundreds of millions of users. Consumer groups, Google’s rivals and some legal analysts say the company now will be emboldened to enhance the visibility of its own products for travel, shopping and other lucrative services in ways that will make it harder for people to find other offerings and will lead to higher prices.

    The Wall Street Journal also notes the difficulty of defining consumer harm in its reporting on the FTC decision: “The Mountain View, Calif., company agreed to make voluntary and nonbinding changes to some aspects of its search business, in what has been widely hailed as a victory for the Internet behemoth. People familiar with the FTC’s probe said both staff and several commissioners felt that Google engaged in questionable behavior, but they struggled to come up with a convincing theory of how consumers, and not just competitors, were harmed.”
    Google is still under investigation in Europe, however, and the New York Times reports that the company may face stronger sanctions in that investigation:

    The Google case underscores a basic difference between the approaches to monopoly power in Europe and the United States. American antitrust regulators tend to focus on whether a company’s dominance harms consumers; the European system seeks to keep competitors in the market. [European competition commissioner, Joaquín Almunia,] has vowed to restore competition to the Internet search business in Europe. […]

    The company will make a detailed set of proposed remedies in January. The European Commission will then allow the complainants to review them in a period of what is known as “market testing.” Antitrust lawyers say a final denouement could arrive by spring, depending on how hostile Google’s rivals are to the proposed remedies.

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