After an almost two-year probe by the Federal Trade Commission (“FTC”) into whether Google Inc. used its monopoly on the Internet search market to illegally injure its rivals, on January 3, Google avoided a potentially crippling federal antitrust lawsuit. The investigation delved into allegations of “search bias,” claiming that Google had manipulated its search algorithms in order to damage vertical websites and steer Google users towards its own competing vertical products when searching on Google. “However, regarding the specific allegations that the company biased its search results to hurt competition, the evidence collected to date did not justify legal action by the Commission,” said Beth Wilkinson, outside counsel to the FTC. Ultimately, in analyzing the FTC’s conclusion it is important to recognize that anticompetitive practices are illegal, but a monopoly on its own is not illegal.
In avoiding the federal antitrust suit, Google agreed to a voluntary settlement with the FTC enabling competitors access on fair and reasonable terms to patents on popular devices such as smart phones, laptop and tablet computers, and gaming consoles. Additionally, Google will give online advertisers greater flexibility to manage ad campaigns on Google’s AdWords platform and on rival ad platforms.
While Google was forced to change some of its business practices to improve competition, dodging the lawsuit was a major victory for Google and a blow to its rivals. David Drummond, Google’s Senior Vice President and Chief Legal Officer, said, “The conclusion is clear: Google’s services are good for users and good for competition. New York Law School professor James Grimmelmann summarized the outcome as “a giant middle finger extended in the direction of Google critics.”
Google competitors including Microsoft and Yelp had been urging the FTC to level federal antitrust charges against google for alleged “search bias” practices. Microsoft had felt especially harmed by the fact that Google blocks Microsoft from offering its customers the same access to YouTube that Android and Apple customers enjoy.
With the settlement, it appears that Google will continue to dominate the Internet search engine market. In 2012, Google accounted for 74.5% of U.S. search advertising revenues and that overwhelming number now shows no sign of diminishing with Google’s “Universal Search” capabilities intact. Thus, Internet browsers can continue to “Google” away.