Google free to extend its dominance of web search

20-month US inquiry ends by finding firm does not skew search results to favour its products

PUBLISHED : Saturday, 05 January, 2013, 12:00am
UPDATED : Saturday, 05 January, 2013, 5:02am

Google is free to extend its dominance of the US$50 billion internet search market after US regulators ended an investigation into whether the company unfairly skewed search results to disadvantage competitors.

The Federal Trade Commission (FTC) concluded after a 20-month antitrust probe that Google was motivated more by wanting to improve its search results and user experience than by a desire to stifle competition, said chairman Jon Leibowitz, who drew a distinction between dominating a market and doing so unfairly.

The FTC's decision clears the way for Google to continue adding features that have helped it beat back Microsoft and Yahoo to become the world's top search provider and most valuable internet company.

"Nothing in the decision is a serious blow to any of Google's ambitions," said Whit Andrews, an analyst for technology research firm Gartner. The FTC didn't get into the question of "where the boundaries are going to get drawn" in the search business, he said.

Google, which makes money by selling advertising next to search results, should grab 76 per cent of the US search market this year, up from 75 per cent last year. Microsoft should get 9 per cent while Yahoo may land 6 per cent, according to EMarketer.

The global internet search market is expected to grow to more than US$50 billion this year, an increase of 15 per cent compared with the same period a year ago, ZenithOptimedia, an advertising research unit of Paris-based Publicis, said in a report.

However, the decision by US regulators will not affect the European Union's examination of the company.

"We have taken note of the FTC decision, but we don't see that it has any direct implications for our investigation, for our discussions with Google, which are ongoing," said Michael Jennings, a spokesman for the European Commission, the EU's executive arm.

The European Commission has for the past two years been investigating complaints against Google, including claims that it unfairly favoured its own services in its search results.

Google presented informal settlement proposals to the commission in July.

On December 18 the commission gave the company a month to come up with detailed proposals to resolve the investigation.

If it fails to address the complaints and is then found guilty, Google could eventually be fined up to 10 per cent of its revenue - a fine of up to US$4 billion.

Bloomberg, Reuters