FTC Investigation of Google Generates Strong Response

Last week, the FTC launched a broad, formal investigation into whether Google has used its dominance in Internet search to thwart competition. Here is a round-up of what legal experts and Internet analysts are saying:

• “We believe there’s a very compelling case that Google is abusing its dominant position in search to stifle competition and to extend its control over how information and commerce flows over the Internet.” – Robert Birge, Chief Marketing Officer, Kayak (FairSearch member) [NPR, 6/27/11]
• “We’ve always said that the issues we’re raising are not in any way limited to us or to Europe. They’re global issues, so it would be unnatural if (the FTC) were not to take a look.” -Adam Raff, Co-Founder, Foundem (FairSearch member) [San Francisco Chronicle, 6/26/11]
• “While anti-competitive practices stifle the business world from doing what they do best, the folks that suffer the most are consumers, who miss out on new and innovative products that will only come about from healthy competition in the marketplace.  I applaud the FTC for working to bring these issues to light and am hopeful these hearings will reveal the full extent of Google’s violations.” –U.S. Rep. John Barrow (D-GA) [Office of Rep. Barrow, 6/24/11]
• “This isn’t just a battle among companies or between Google and regulators, it is an important matter of what is in the best long-term interests of consumers who increasingly rely on Internet services in their day-to-day lives. Everyone benefits from fair competition. I urge Google to fully cooperate with the investigators and I urge the FTC to conduct a thorough investigation. That is the best way to send a clear message to everyone in the industry that fair competition will be fully enforced.” –U.S. Rep. Frank Pallone, Jr. (D-NJ) [Office of Rep. Pallone, 6/24/11]
• “Over time, complaints have increased regarding Google’s anti-competitive behavior, in particular the use of its market power in search to push consumers to its own services. The time has come to seriously look into this issue.” –U.S. Rep. Albio Sires (D-NJ) [Office of Rep. Sires, 6/23/11]
• “What is illegal is using the monopoly power to win an unfair competitive advantage in the marketplace.  I’m confident the FTC will find that is exactly what Google has been doing and will seek the necessary remedies to ensure competition and protect consumers.” –John Simpson, Consumer Watchdog [Consumer Watchdog, 6/23/11]
• “They should compete on fair terms, but they’re not subjecting their own content to the same standards by which they judge ours. They always guarantee themselves the top position with products that are largely built on other publishers’ content.” –Jay Herratti, chief executive of CityGrid Media [Wall Street Journal, 6/24/11]
• “They’re the kingmakers. If you play well on Google search then you’re going to get the advertising revenue and if you don’t then you won’t. And that kind of control makes anybody very nervous. If you’re a monopoly and you effectively control the purse strings for any competitors that might come up that could be seen as excessive control and restriction of trade.” –Rob Enderle, Principal analyst, The Enderle Group [AFP, 6/24/11]
• “They have the power to make and break companies on the Web, and many of those companies are Google competitors. That’s an enormous amount of control, and the FTC sees that as restraint of trade.” –Rob Enderle, Principal analyst, The Enderle Group [E-Commerce Times, 6/24/11]
• “Google has this enormous power, and they have the incentive to unfairly exclude competitors in a way that could harm consumers. And the FTC wants to see whether this has happened.” –Bob Lande, Director at the American Antitrust Institute [NPR, 6/27/11]
• “There have been a number of complaints by interested competitors of Google, and since fair government scrutiny is necessary for good competition policy we support an FTC investigation.” –Ed Black, Chief Executive, Computer & Communications Industry Association (CCIA) [Marketwatch, 6/24/11]
• “The allegation is that Google brings its own results up to the top of the search results, making them more visible and more valuable than competitors who actually would score higher on the normal relevance tests Google uses to rank search results.” -Gary Reback, Of Counsel, Carr & Ferrell LLP [NPR, 6/27/11]
• “I think there’s an excellent argument to be made that, given Google’s large market share, the antitrust laws require it to treat its own content on an equal basis with the content of its direct competitors.” – Jonathan Grossman, Antitrust Lawyer, Cozen O’Connor [Wall Street Journal, 6/24/11]
• “There are a lot of complainants out there. When the agencies undertake an investigation like this, it means there are some serious issues that they have. I would say look at the ITA merger deal and the remedies [the DOJ] imposed there. They set up a mechanism for other companies to complain about search bias. That’s obviously a core issue for them.” – Ted Henneberry, Partner, Antitrust and Competition Group, Orrick, Herrington, and Sutcliffe LLP [InformationWeek, 6/24/11]
• “Google’s potential market power and apparent disregard for privacy poses a real risk to consumers and small businesses given the company’s dominance of the online search and advertising markets… A healthy and competitive Internet is vital to our nation’s economy, investment, job creation and to the free flow of information.  As the dominant provider of search and search advertising, Google functions as a key Internet gatekeeper for information.  This means that members of Congress, the FTC and other agencies deserve answers about their commitment to competition, privacy and transparency.” -Steve Pociask, President, American Consumer Institute [ACI, 6/23/11]

For more on recent coverage of antitrust scrutiny of Google, click here, and for more comments about the FTC investigation, click here.