Benton RSS Feed

[Commentary] Now that the Federal Trade Commission has completed a settlement with Google, the search company's competitors who precipitated the FTC's investigation are crying foul that their shameless attempt at rent-seeking fell short. Unable to out-innovate and out-compete, rivals of Google such as Microsoft formed FairSearch, a lobbying group that first demanded the FTC look into Google and then tried to influence the agency throughout its nearly two-year-long investigation. Now that a settlement has been announced—which preserves competition and protects consumers but is short of the "death penalty" that Google's detractors had demanded—FairSearch is threatening to take its case to the Justice Department for a second round. As a former FTC chairman, I don't believe that we should give any credence to these complaints. The agency spent countless hours and resources prying into every aspect of Google's business, with the company's competitors urging them on every step of the way. I know that if the FTC had found a sustainable antitrust violation, the commission would absolutely have pursued it after investing so much effort. But the FTC is not going to bring a case it cannot win and in the process squander resources it might have used to protect competition and consumers—and all the while risk eroding its enforcement power for years to come.

The Federal Trade Commission’s search settlement with Google “creates very bad precedent and may lead to the impression that well-heeled firms such as Google will receive special treatment at the Commission,” wrote Commissioner J. Thomas Rosch in a dissenting statement.

That’s both because he doesn’t think Google violated antitrust laws and because he doesn’t think the non-binding search agreement Google made has any teeth. Rosch’s pithy take: “In other words, after promising an elephant more than a year ago, the Commission instead has brought forth a couple of mice.” Commissioner Rosch, a Republican who is known as a bit of a lone-wolf thinker, is on his second-to-last day at the agency, as his replacement was confirmed earlier this week. Commissioner Rosch voted along with the rest of the five commissioners to close their search investigation and with the majority to discipline Google on standards-essential patents. But he abstained from voting for Google’s voluntary settlement agreement and a statement on the patent matter. By stretching to catch Google on something — anything — the FTC reached too far, Commissioner Rosch argued. The two issues the FTC convinced Google to back down on are scraping content to display in search “snippets” and allowing AdWords users to manage their ad campaigns across multiple platforms.

Reaction was swift, and mixed, to the Federal Trade Commission's settlement with Google over allegations of anticompetitive conduct.

Ed Black, president of the Computer and Communications Industry Association, whose members include Google and Google critic and search competitor Microsoft, called the FTC's decision not to proceed with a case against Google for anticompetitive search allegations "the right call." But Black also found cause for concern, specifically Google's voluntary commitment to allow entities to opt out of its specialized results pages, which he sees as a potential threat to fair use rights.

The Progressive Policy Institute also saw the FTC decision as the right one. FairSearch.org, whose members include Google search competitors Expedia, Hotwire, Kayak -- and Microsoft -- called the FTC decision "disappointing and premature, coming just weeks before the company is expected to make a formal and detailed proposal to resolve the four abuses of dominance identified by the European Commission, first among them biased display of its own properties in search results."

[Commentary] Now that U.S. regulators have backed down from a confrontation, Google's rivals, led by Microsoft, are sure to press their case with the European Union and with attorneys general in various states. But Jan 3 was a day for Google to gloat. "The conclusion is clear: Google's services are good for users and good for competition," David Drummond, Google's chief legal officer, wrote on the company's official blog. The Federal Trade Commission did obtain some concessions from Google: the company will license important mobile technology patents on "fair, reasonable and non discriminatory terms;" it will allow businesses to easily take their advertising campaigns from Google to rival search engines; and it will voluntarily agree to some changes in its relationship with "vertical" search engines like Yelp. But as some analysts noted, those concessions, especially on ads and vertical search, were merely tactical. Google held firm on these issues until now with one goal: give something to the FTC so it could close the search bias case and save face.