Google Inc. will change some of its business practices to resolve Federal Trade Commission concerns that those practices could stifle competition in the markets for popular devices such as smart phones, tablets and gaming consoles, as well as the market for online search advertising.
Under a settlement reached with the FTC, Google will meet its prior commitments to allow competitors access – on fair, reasonable, and non-discriminatory terms – to patents on critical standardized technologies needed to make popular devices such as smart phones, laptop and tablet computers, and gaming consoles.
In a separate letter of commitment to the Commission, Google has agreed to give online advertisers more flexibility to simultaneously manage ad campaigns on Google’s AdWords platform and on rival ad platforms – and to refrain from misappropriating online content from so-called “vertical” websites that focus on specific categories such as shopping or travel for use in its own vertical offerings.
Albert Foer, president of the American Antitrust Institute, said that “issues relating to search manipulation allegations are complex, not only with respect to pinning down a theory of antitrust liability but also with respect to determining an effective remedy once liability has been determined.”
“While we would have preferred to see a consent order that binds Google, it is nevertheless significant that Google has made commitments that deal with many of the most important allegations,” Foer said. “We believe the result will be more transparency for the user, more flexibility for advertisers to leave Google, and fewer complaints about screen scraping. The FTC must monitor on-going activities to ensure that these commitments are adequate.”
Jane Hamsher at Firedoglake was not so kind to FTC and its outgoing chairman, Jon Leibowitz.
“European consumers have a much more vigilant watchdog guarding their interests,” Hamsher wrote. “Why Leibowitz rushed this decision before seeing what Google offers to the EU in a few days is anybody’s guess. But as he exits the FTC, he’ll be carrying his ass — because (Google CEO) Eric Schmidt just handed it to him.”
Leibowitz said that the changes Google agreed to make will ensure that consumers continue to reap the benefits of competition in the online marketplace and in the market for innovative wireless devices they enjoy.
“This was an incredibly thorough and careful investigation by the Commission, and the outcome is a strong and enforceable set of agreements,” Leibowitz said.
“We are especially glad to see that Google will live up to its commitments to license its standard-essential patents, which will ensure that companies willing to license these patents can compete in the market for wireless devices,” Leibowitz added. “This decision strengthens the standard-setting process that is at the heart of innovation in today’s technology markets.”
Google is a global technology company with more than 32,000 employees and annual revenues of nearly $38 billion. The FTC also conducted an extensive investigation into allegations that Google biased its search results to disadvantage certain vertical websites; and that Google entered into anticompetitive exclusive agreements for the distribution of Google Search on both desktop and in the mobile arena. The agency decided not to take action in connection with these allegations.
“The evidence the FTC uncovered through this intensive investigation prompted us to require significant changes in Google’s business practices. 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 Commission.
“Undoubtedly, Google took aggressive actions to gain advantage over rival search providers. However, the FTC’s mission is to protect competition, and not individual competitors. The evidence did not demonstrate that Google’s actions in this area stifled competition in violation of U.S. law.”