Google 'to offer compromise' in antitrust probe

Search giant said to be working on changes to business practices to end 2-year investigation

PUBLISHED : Tuesday, 18 December, 2012, 12:00am
UPDATED : Tuesday, 18 December, 2012, 2:33am

Google was poised to offer voluntary concessions that would end a 20-month US antitrust probe of its business practices without any enforcement action being taken, two people familiar with the matter said.

Google, which has been under investigation by the Federal Trade Commission, was preparing a letter promising not to copy content from rival websites without permission and to allow advertisers to compare data from ad campaigns with their performance on other internet search engines, one of the people said yesterday.

That would bring the antitrust investigation to a close without a lawsuit or settlement, said the people, who asked not to be identified because the matter was not public.

An end to the probe without enforcement action would be a blow to competitors including Microsoft, Yelp, and Expedia.

An alliance of such e-commerce and web-search companies have pressed the agency to act, claiming Google's dominance of internet search combined with favouring its own services in answers to queries violates antitrust laws.

Adam Kovacevich, a Google spokesman, declined to comment on whether Google was preparing to announce concessions in the case or whether the FTC was preparing to close the matter without taking action.

Cecelia Prewett, a spokeswoman for the FTC, also declined to comment. "We continue to work co-operatively with the Federal Trade Commission and are happy to answer any questions they may have," Kovacevich said.

Google has been engaged in settlement talks with the FTC for about two weeks.

The California-based company has resisted the FTC's efforts to reach a formal settlement agreement over allegations that it skews search results to favour its services, saying such an agreement might hurt its business prospects, the people said.

"Enforcement authorities should not allow Google to retain an unfair advantage in the market gained through years of anticompetitive behaviour,", the alliance that includes Microsoft, said yesterday.

"If the FTC fails to take meaningful action after a nearly two- year investigation, Google will only be emboldened to act in ways that are more harmful to consumers and innovators." claims Google puts its own restaurant reviews, maps and shopping services at the top of the results page and that the first three answers to a query garner 88 per cent of users' clicks.

"At a minimum, if the government is going to concede that the practice isn't unlawful, it should make it clear that Google is favouring its own services," said Gary Reback, an antitrust lawyer in California who represents companies that have complained about Google's practices.

Google's position, made publicly by executive chairman Eric Schmidt during a Senate Judiciary antitrust hearing in September 2011, is that its rankings help consumers who seek the best direct answer to a query rather than links to other information sources.

"Our challenge is to return the most relevant answers first," Schmidt said at the hearing. "This means that not every website can come on top."

Reback criticised the FTC's investigation, saying that many of his clients, which include NexTag and other shopping-comparison websites, received no follow-up questions, including about the anticompetitive effects of Google's practices.

The agency has been under pressure to extract concessions from Google after winning a battle with the Department of Justice's antitrust division over which regulator would probe the world's most popular search engine.

Google also is in discussions with European Union officials to resolve their antitrust concerns. Those include Google ranking its services higher than rivals' offerings in search results, copying competitors' web content, and making agreements with websites and developers that stifle competition in the advertising industry.