Frager Factor

Friday, January 04, 2013

Google Beat Back Antitrust: Does Not Favor Itself Or Others In Results


"FTC Chairman Jon Leibowitz said the main reason Google changed its web-search results to highlight Google's own products was to improve the experience of its users."

 Eric Schmidt praised the FTC ruling saying 'Google's services are good for users and good for competition'





Google Beats the Feds; Dodges Antitrust Hit: Google spent millions in lobbying and hired influential Republicans and former regulators.

Said the folks on Rick's board in 2007, "Type-ins will continue for a while, but long term I just don't see it. Not generic type-ins. I see the internet as like moving to a new city. You try a lot of different restaurants, stores, clubs, theaters, whatever you're in to then over time you pretty much have your established favorites and that's what you go to. When you want to buy a book or see a show or get some groceries, you know where to go.

This is a dangerous road to walk. It may be all needed to get google to go that route. I bet some major players are paying close attention to these blog posts.

If they tried a .GOOG, I'd bet the anti-trust forces (within U.S. gov't) would rise up against them like they did against MSFT, and make their perfect world into a living hell.

You get TOO big, and they do to you what they did to AT&T and MSFT."

WRONG!

U.S. antitrust regulators who spent nearly two years probing Google Inc.'s GOOG +1.10% business practices came up virtually empty-handed, preserving the company's dominant Web-search business and dealing a blow to competitors such as Microsoft Corp. 

The FTC's five commissioners voted unanimously to close without action on the core investigation into whether Google used a practice that its detractors called "search bias." The commission said it would "remain vigilant and continue to monitor Google for conduct that may harm competition and consumers."


The Federal Trade Commission did, however, win promises from Google that it would end the practice of 'scraping' reviews and other data from rivals' websites for its own products, and to allow advertisers to export data to independently evaluate advertising campaigns, the FTC said on Thursday.

Google also agreed to no longer request sales bans when suing companies which infringe on patents that are essential to ensuring interoperability, also known as standard essential patents.

But the FTC declined to pursue Google on the subject of search bias. Smaller companies have accused Google of putting its own products high up in results for lucrative searches like 'hotels' and giving competitors a lower ranking so customers cannot find them.

At a press conference, FTC Chairman Jon Leibowitz, anticipating criticism, noted that the agency had looked hard at the issue. 'Even though people would like us to bring a big search bias case, the facts aren't there,' Leibowitz said.


Overall, "this is a huge win for Google, which closed a dangerous investigation with minimal consequences," said Eric Goldman, a law professor at Santa Clara University who specializes in Internet law.

Google, whose shares were nearly flat after the FTC announcement, was upbeat. "The conclusion is clear: Google's services are good for users and good for competition," said David Drummond, Google's chief legal officer, in a post on the company's blog.

Google still faces antitrust investigations by European regulators and by some U.S. state attorneys general. But Thursday's long-awaited decision means the company can continue with its $40 billion-a-year online-ad business unfettered and intact.

Google handles more than two thirds of all Web searches in the U.S. and has captured around 75% of the lucrative search-advertising market, according to eMarketer Inc. and other research firms. The business allows Google to fund multiple other initiatives that have broadened the company's reach into everything from tablet computers to self-driving cars to high-speed Internet.

Google increasingly has posted links in search results that steer users to its own specialized sites, such as its business listings, travel-search site or shopping-search site.

Detractors including business-review site Yelp Inc. YELP +2.48% and travel sites TripAdvisor Inc. TRIP -0.81% and Expedia Inc. EXPE +1.34% alleged that Google was hogging more and more Web traffic for itself in a bid to snag more online-advertising dollars. Yelp and others also complained that Google took content from their sites in order to populate Google's business-listings pages and other specialized sites.

Google had maintained that it was merely trying to provide the most relevant answers to consumers' search queries and that it had free-speech rights to show links to its own websites.
Google escaped from a nearly two-year federal antitrust probe with only a few scratches by proving that the best defense is a good offense.

Instead of ignoring Washington — as rival Microsoft did before its costly monopolization trial in the 1990s — Google spent about $25 million in lobbying, made an effort to cozy up to the Obama administration and hired influential Republicans and former regulators. The company even consulted with the late Robert Bork and The Heritage Foundation and met with senators like John Kerry to make its case. In other words, these traditional outsiders worked the system from the inside.


But the FTC declined to pursue Google on the subject of search bias. Smaller companies have accused Google of putting its own products high up in results for lucrative searches like 'hotels' and giving competitors a lower ranking so customers cannot find them.

At a press conference, FTC Chairman Jon Leibowitz, anticipating criticism, noted that the agency had looked hard at the issue. 'Even though people would like us to bring a big search bias case, the facts aren't there,' Leibowitz said.

The commission voted 4 to 1 to settle the patent investigation into Google's injunction requests. It voted 5 to 0 to end the probe of Google's search practices.

With reporting from Wall Street Journal, Daily Mail and Politico







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