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FTC To Recommend Antitrust Case Against Google

NeutronCowboy writes with news that a majority of top staff members from the U.S. Federal Trade Commission have become convinced that Google "illegally used its dominance of the search market to hurt its rivals." The FTC is now drafting a memo that recommends the U.S. government begin an antitrust case against Google. "The agency’s central focus is whether Google manipulates search results to favor its own products, and makes it harder for competitors and their products to appear prominently on a results page. ... The memo is still being edited and changes could be made, but these are mostly fine-tuning and will not alter the broad conclusions reached after an inquiry that began more than a year ago, said these people, who spoke on the condition that they not be identified. ... The FTC staff memo does not mean that the government will sue Google for antitrust violations. Next, the vote of three of the five FTC commissioners would be required. And each step is a further prod for Google to make concessions to reach a settlement before going to court. Last month, Jon Leibowitz, chairman of the FTC, said a final decision on whether to sue Google would be made before the end of this year.

33 of 195 comments (clear)

  1. What? by Anonymous Coward · · Score: 2, Insightful

    If you were in the business of advertising...

    Wouldnt it be 100% your control AND your business to do exactly this? determine which ads to put where and why to get the best result?

    Google is being investigated for doing their job... lol

    1. Re:What? by aliquis · · Score: 2

      Rather seems like if (from the summary, I don't read articles ..) say I search for smartphones Google may give me an Android hit rather than an iPhone hit first?

      As in since most people use their search engine they can also make it so people choose their products because they get a better place.

      (I search for mail and gmail shows up and so on.)

      I can kinda get that point. But if they put their own hits in "recommended" (maybe not), sponsored or Google products bubbles separate from the other hits I think that should be ok.

    2. Re:What? by bhagwad · · Score: 2

      Shouldn't a complaint from at least one customer be a basis for an anti trust suit given that this is meant to prevent harm to consumers? I'm getting the feeling here that the only people doing the complaining are the competitors.

    3. Re:What? by the_B0fh · · Score: 2, Informative

      you can decide what is the best search result (for example, you search for phone upgrade from an android and it sends to to an android comparison site, and if you search from an iphone it sends you to apple), but you cannot manipulate the results so that the best result is what helps your *OTHER* businesses, such as a search for a review on a local restaurant goes to your places site instead of other more popular sources.

      This will be interesting. Microsoft was crucified for giving away a browser for free, to kill the Netscape browser, to kill the Netscape web server, so that Microsoft can maintain it's Windows monopoly.

      Google gave away Android for free... What is the difference?

    4. Re:What? by bhagwad · · Score: 2

      There was nothing wrong with Microsoft giving away IE free per se. The problem what that it unfairly gave IE advantages that other browsers couldn't take advantage of. From the Wikipedia page:

      "It was further alleged that this restricted the market for competing web browsers (such as Netscape Navigator or Opera) that were slow to download over a modem or had to be purchased at a store. Underlying these disputes were questions over whether Microsoft altered or manipulated its application programming interfaces (APIs) to favor Internet Explorer over third party web browsers, Microsoft's conduct in forming restrictive licensing agreements with original equipment manufacturers (OEMs), and Microsoft's intent in its course of conduct."

      This is worlds apart from Google giving away stuff for free. Competitors are a click of the mouse away - there's no lock in. Only one person decides whether to use Android/Google or not the customer. No other forces make that decision.

    5. Re:What? by larry+bagina · · Score: 2

      Google's customers are advertisers. Some of them are complaining.

      --
      Do you even lift?

      These aren't the 'roids you're looking for.

    6. Re:What? by graffatcolmingov · · Score: 2

      Using your example, I searched for mail. The top 3 results (in order) were: 1 mail.com, 2 Yahoo! Mail, 3 GMail. Maps bring Google up first, but that's logical because they've spent so much money on their maps service. XMPP, brings up Wikipedia first, while Talk brings up talk.google.com first. None of them show up in recommended, but at the same time, in the last case there are no competitors (that I'm aware of) so that isn't exactly anti-competitive. In the second case, that might be anti-competitive but IANAL.

    7. Re:What? by nschubach · · Score: 3, Informative

      Hell, I searched for Smartphone and I got a wiki article on smartphones, CNET review of smartphones, and an AT&T site that lists iPhone first. On the side bar "Shop by Brand", in this order, Blackberry, Samsung, Apple, HTC, Nokia. If they were "stuffing the ballot", wouldn't Nexus be at least front page?

      --
      Every time I start to have faith in humanity, I ruin it by driving to work between 7 and 8 am.
    8. Re:What? by CrashNBrn · · Score: 2

      Except, back then (2001) Opera (v5) was only a 2.2MB download ... on the other hand Mozilla was what 20-25MB and took 2-5 hours to download on dialup.

      Of course now-adays, Firefox and Chrome have reamed their user-interface, IE has too to some extent ... Opera while still as customizable as ever has gotten more and more unstable version after version - starting around v9.

    9. Re:What? by Insanity+Defense · · Score: 2

      Not quite. Microsoft used its existing Windows monopoly to create a browser monopoly and in that they convicted themselves. How is Google using its search monopoly to create a mobile monopoly? How does Google Search push Android and exclude competitors? Showing competitors lower down the page isn't the same as not showing competitors.

    10. Re:What? by Anonymous Coward · · Score: 2, Interesting

      They end up promoting things that they have a lot of data about (there was a realtime search that searched twitter, it was awesome. Twitter ended the agreement and it went away). Facebook and twitter have thrown fits and actively blocked googlebot from their sites for a lot of things, and even if they didn't, that site (www.facebook.com/ladygaga) when I fetch it with wget returns a crapton of javascript (referring to 'bootloader' and stuff like that) and no actual information - to index the visible content of the page, google would likely have to run a web browser and execute the javascript (and this assumes that the javascript doesn't pull stuff from the sites blocked to Googlebot by robots.txt). I don't think they tend to do that.. Curl won't even grab it.

  2. Really? by dreamchaser · · Score: 4, Insightful

    Nobody forces anyone to use Google to search. They don't sell search. I fail to see a case, but IANAL.

    1. Re:Really? by JobyOne · · Score: 5, Interesting

      I'm inclined to agree with you.

      I'm as entrenched as anyone could possibly be in the Google ecosystem, and it's not because they're force-feeding me their products. I frequently try alternatives when comes to stuff like online calendars, documents, email, whatever.

      The reason my attempts to use other services never stick is simple: they're just not as good as Google's offerings.

      I can kind of see where they're coming from if Google is in fact promoting their own services in their search, but I suspect that their own algorithms are picking out their own services because the most people use and talk about them...again because they're just the best offering.

      Personally it's tough to sell me on the idea of a provider of free web services getting into antitrust territory, because a different search engine is always one different URL away. The same goes for all their other services. It's tough to even call them out on vendor lock-in, because thanks to the data liberation front they're one of the best companies I've ever seen on the internet when it comes to avoiding lock-in.

      I'm dubious.

      --
      Porquoi?
    2. Re:Really? by boaworm · · Score: 4, Interesting

      No but they sell ads. And people want to put their ads where people will see them. So it isn't much of a stretch to claim that they sell search.

      They also sell sponsored results in their search results.

      --
      Probable impossibilities are to be preferred to improbable possibilities.
      Aristotele
    3. Re:Really? by dreamchaser · · Score: 2

      But they do not force anyone to use their search. I can use whatever search engine I want ever from my Asus Transformer Prime.

    4. Re:Really? by squiggleslash · · Score: 4, Insightful

      OK, but at least in theory the site that attracts the most visitors (that you want to advertise on) is also the one that's the easiest to compete with.

      Search itself isn't hard. That is to say someone with a VPS can probably build and run an Altavista clone and make a profit from ads if they want to. Not enough to give up the day job, but enough to cover the running costs.

      Good search of course is harder, but Google's search has gone through phases where it's very good, followed by very awful, followed by OK, followed by (... etc, you get the idea), enough times.

      Why does Google have a "monopoly" on search, and does it have a monopoly on search? The nearest I can think of, to be honest, is that they own the word "Google". People go to Google because it's good enough and they know it's good enough, and don't know enough about Bing or Yahoo search to feel that'd be less of a waste of their time. So Google has immense market share, but it's hard to believe it has market power - if it was signficantly worse than its rivals, people would get frustrated and switch, they would lose their trust in "Google" pretty quickly and have no reason to stay.

      And I know that because I've done the same thing. I've switched from Google when it's been awful - when it's gone over the top in ignoring words in my search criteria and bringing up useless results, or when clicking in the wrong place causes my browser to hang for five seconds because Google's JS has decided to load an entirely unnecessary preview of a search result's color scheme (WTF? I'm glad they fixed that.) I've generally switched back because its competitors are for the most part lousy clones of Google that aren't better.

      This is not like Windows, where people went to Windows because Microsoft was able to control the DOS market from 1981 onwards, and used its power as the controller of the "standard platform" to make it expensive for OEMs to bundle competitor's products. (This is not to say early Windows wasn't an improvement on, say, GEM, but the reason why we have Windows on home computers in 2012 is not because Windows 1.x or 2.x was a more sophisticated, powerful, system in 1987 than GEM or DesqView.)

      Disclaimer: I don't actually have a disclaimer. Last month I sold my sole share in GOOG because my new kid means I need the cash right now. ;-) Boy did I pick the right time, I can't imagine this announcement is going to help the stock price...

      --
      You are not alone. This is not normal. None of this is normal.
    5. Re:Really? by NeutronCowboy · · Score: 4, Interesting

      To me, it looks like the lobbying by various competitors (hi, Microsoft, Expedia!) has finally paid off. There is no stickyness to Google services, outside of their quality. Switching is a click away, especially when it comes to search and maps. The complaints I've read? Nothing but sour grapes that Google didn't completely shaft their UI and search algorithm, just so that every competitor has the same or better page position (note that I didn't say search position) as any Google service listed on any of Google's pages.

      If this goes through, it's the end of search algorithms: if someone is upset they aren't high-placed on the dominant search engine du jour (and there will ALWAYS be one), they can just sue for extra income.

      Let me rephrase that: it will be the end of search engines in the US. China, I'm sure, will be happy to supply quality search engines that give a big middle finger to shenanigans like these.

      --
      Those who can, do. Those who can't, sue.
    6. Re:Really? by alexmipego · · Score: 2

      I totally agree with you although I don't think you need to sell something to change the "moral" here.

      For instance, if Google advertising their own products on their own services makes for an anti-trust case, then perhaps TV channels should also be forced to advertise the competion's schedule? No one forces you to use/watch either services and some channels are paid, so I fail to see the distinction here.

    7. Re:Really? by aztracker1 · · Score: 2

      Yes, but for OEMs to compete/thrive they did *HAVE* to buy windows licenses, which included provisions to *NOT* install competing browsers out of the box... the users/consumers didn't know any better and were hurt as a result.

      --
      Michael J. Ryan - tracker1.info
    8. Re:Really? by swillden · · Score: 4, Insightful

      This is exactly what is being claimed Google is doing: leveraging their dominant position in the search market to gain unfair advantages in other, unrelated markets. If they really are doing this, it certainly is worthy of investigation.

      What will be really interesting is if, as I strongly suspect, Google does not give its own products any extra "boost" in search results, or even in ads -- but Google's products come out on top because they're what Google's algorithms predict is of most interest to the searchers.

      What then? Is that unfair dealing? Should Google be obligated to artificially lower the visibility of its own products in search?

      In case it isn't clear to some how algorithms could be deciding the placement of Google's products in ads, keep in mind that all Google ad-views are a result of a real-time auction in which tens of thousands of candidate ads "compete" for the spot. Google's algorithms select the winning ad based on a combination of factors including the ad's observed effectiveness and the price the advertiser bids. So, if the Google Chrome team, for example, decides to run ads on Google and submits their ads along with a bid, and the normal algorithms are then applied to decide when to show that ad... is there any way that Google can be accused of anti-competitive use of its search dominance?

      I mean, Google effectively even has to pay for the advertising space given to its own products on its site. There may or may not be any transfer of money between divisions, but if Google's algorithms decide that the Chrome team's bid beats out some other advertiser's bid for a given ad spot, Google is foregoing the revenue from that other advertiser, so there is a real financial cost to the decision to display the Chrome ad. Actually, that would be true even if Google were artificially boosting the placement of its own products, rather than just using high bids (though given the ability to use the bid as a handle to tweak visibility, I can't think why anyone would feel the need to introduce a different boosting parameter into the algorithm).

      Where it gets a little fuzzier is when we look at Google's decision to build specialized search engines like Maps and Shopping, which have their own specialized search competitors, and then to give the results of those engines prominent placement in the general web search page. Is that leveraging Google's general-search dominance to gain share in other markets? Or is it a logical extension to general search, to provide more useful results to general query? I think the latter, but others might disagree.

      (Disclaimer: I work for Google, but I don't have anything to do with ads, or search, and don't know anything about how Google decides to handle ads for its own products.)

      --
      Note to ACs: I usually delete AC replies without reading them. If you want to talk to me, log in.
  3. "Lobby" more, like Apple by gelfling · · Score: 2

    You get the government you pay for.

    1. Re:"Lobby" more, like Apple by GPierce · · Score: 5, Insightful

      That used to be true. Today I get the government someone else pays for.

      --

      When you are dancing with wolves, never limp
  4. I can save them a lot of trouble by Anonymous Coward · · Score: 2, Funny

    The agencyâ(TM)s central focus is whether Google manipulates search results to favor its own products, and makes it harder for competitors and their products to appear prominently on a results page.

    If I go to Google and search for "web browser" the results are:

    1. Wikipedia
    2. Opera
    3. Opera again
    4. Mozilla
    5. News for web browser
    6. Chrome
    7. Safari
    8. Webopedia (of all things)
    9. Maxthon
    10. Flock
    11. docs.python.org

    Those bastards!

    1. Re:I can save them a lot of trouble by Cinder6 · · Score: 2

      I don't use Google anymore, precisely because of the "search bubble". My Google result just now was:
      1. Wikipedia
      2. Firefox
      3. Opera
      4. Chrome

      Somewhat interesting, given that I don't use Firefox or Opera. My DuckDuckGo search gives me a bunch of web browser definitions, reviews, comparisons...and Firefox. So I guess some things are the same. It's all a plot by Mozilla.

      --
      If you can't convince them, convict them.
  5. so is everyone else by Anonymous Coward · · Score: 2, Insightful

    I wouldn't go to the same extremes you do in describing google. I do agree that google's business model is built on exploiting consumer's habit for profit, but the issue with the FTC, is that the other creepy uncles of the world are demanding their chance to go through your things. Getting the FTC involved will only make things worse.

  6. Re:Google is like a creepy long-lost uncle by Elbereth · · Score: 2

    The analogy that I prefer is that of a creepy, too-friendly neighbor who hires a private detective to thoroughly investigate you, so that it knows what kind of housewarming gift to give you.

    I'm not sure that Google has plans to go all Big Brother on us (that seems more like an Apple or Microsoft thing). Google strikes me as more like an awkward, autistic person who just doesn't realize how creepy his behavior is. He means well, but he's just to damn creepy for me to be comfortable around him.

  7. Re:Google is like a creepy long-lost uncle by tmosley · · Score: 2

    Ri~ght, because the internet is totally closed and there is no price competition there. Also, everyone only buys the things they see in ads.

    I have noticed that those who defend government intrusion into both the private lives of citizens and into the market come up with the wildest, most asinine examples to justify their intrusion. When bad things happen as a result of thier intrusion, they then use those to justify more intrusion. There is a disgusting metaphor that is apt here, but I will leave it be. Needless to say, the practice utterly disgusts me.

  8. Re:Crazy government and the cheering crowd by Laxori666 · · Score: 2

    Mod parent up. How does it help business for the government to set the example of: "Oh, if you become too successful, we'll sue the shit out of you. Because it's unfair to your competitors that you did a better job than they did. Unless, of course, you've donated sufficiently to some of our campaigns; then we'll probably leave you alone."

  9. PJ from Groklaw comments by walterbyrd · · Score: 4, Informative

    Are they kidding? How about looking into Microsoft and Nokia and Apple and MOSAID and fill-in-the-blank-patent-trolls and all Microsoft's little FairSearch helpers in a conspiracy to use patents to destroy Android? Who started the patent smartphone wars, after all? It wasn't Google. By the way, have you written a nice, polite letter or email to the FTC about this? Here's their general contact page; here's the antitrust page, with an email contact. Note they state that if you wish your expressions to be kept confidential, don't email. Send a regular letter marked confidential.

  10. Re:Comcast advertises it's own pay-per-view by aztracker1 · · Score: 2

    I'm pretty sure I've seen HBO ads on all the major broadcast networks... If NBC was willing to buy ad space on CBS, I'm pretty sure CBS would allow it. If CBS wanted to charge NBC more for that slot than say ShamWow, there might be a problem.

    --
    Michael J. Ryan - tracker1.info
  11. Re:Comcast advertises it's own pay-per-view by reve_etrange · · Score: 2

    Google has about 2/3 of the search market, while Comcast has about 1/3 of the connectivity market. Now zoom in a little bit and you get a bunch of regions where Comcast has 100% market share, because they are the only provider.

    There's nowhere in the world where Google has 100% market share, or where users do not have a choice but to use Google.

    --
    .: Semper Absurda :.
  12. Why am i not surprised? by nurb432 · · Score: 2

    Sounds like typical status quo for this administration: punish those that succeed.

    --
    ---- Booth was a patriot ----
  13. Hardest case they will ever try... by rahvin112 · · Score: 2

    This will be the hardest case the FTC has ever attempted.

    In a normal anti-trust case you have a company that has and established product with barriers to entry to the market that typically include:

    1. Cost of replacement products (Microsoft is an example of this because the cost of replacement was significant to the cost of the computer).
    2. Difficult interoperability (Microsoft again is a good example because the software market made it difficult if not impossible for competitors).
    3. Difficult customer access (AT&T is a perfect example of this, building out a last mile telecom network is a huge undertaking, even long distance competitors couldn't access their customers without government intervention).
    4. Business collusion and exclusion that prevented competition (almost every FTC case involved this because it's a necessary aspect of enforcement of the sherman-anti trust rules, in the case of MS it was contracts and such that involved the punishing and rewarding of other companies in the business that worked with the competitor).

    The FTC might be able to prove that Google is putting their results at the front but they are going to have a hell of time given the facts. No one, not a single soul is forced to use google products. Not only that but the startup costs and difficulty in creating competitive products is nearly non-existent. There are dozens of competing products in almost every single category Google works in and the only reason they haven't been replaced is that they continue to innovate their core products. I really don't think they have case against Google in any of their core markets. Now I do think that what Google did with maps pro (don't jump to conclusions, if you don't know what I'm talking about don't reply) was a dirty evil act right ouf of Microsoft's play-book but I don't think outside that the government even has a case. Everyone could decide to use a different search engine, advertising, maps, calendar, email, phone (android open source doesn't require Google products) tomorrow and there is absolutely nothing stopping people from doing so other than the fact that Google generally offers the better product. With the exception of the maps pro incident Google has none of the barriers to entry that the government hung their hat on during other anti-trust cases.

    Personally, I don't think the government will win and I pray Google doesn't just give in.