The Federal Trade Commission (FTC), after investigating the allegations related to anti-competitive behavior, issued a list of changes to Google, regarding its practices, especially for search protocols. The FTC, in a 4-1 vote, ordered the search engine giant to change a number of its current business strategies, which the FTC will “vigorously monitor.” As per the ruling, FTC wants Google Inc (NASDAQ:GOOG) to stop using patents that relate to “standardized technologies”, which it bought from Motorola Mobility, to kill competition. Instead, the FTC wants such patents to be used fairly and on and non-discriminatory (FRAND) terms.
The FTC also ordered Google to stop “scraping” the content of rival companies for its own benefit. Other issues raised by competitors, including Microsoft, was the restrictions placed on AdWords. However, Google Inc (NASDAQ:GOOG) has now agreed to do away with these restrictions.
Dave Heiner, the Vice President & Deputy General Counsel at Microsoft Corporation (NASDAQ:MSFT), unhappy with the ruling, posted a lengthy complaint on a blog: “The FTC took steps today to address some of Google’s improper business practices. We find it troubling that the agency did not adhere to its own standard procedures that call for the agency to obtain industry input on proposed relief and secure it through an enforceable consent decree. The FTC’s overall resolution of this matter is weak and — frankly– unusual. We are concerned that the FTC may not have obtained adequate relief even on the few subjects that Google has agreed to address.”
Another issue Heiner raises is “Google has long said that it merely aims to offer customers the most relevant answer to their query, and the FTC Commissioners accepted that view. Yet we know that Google routinely and systematically heavily promotes its own services in search results. Is Google+ really more relevant than Facebook? Are Google’s travel results better than those offered by Expedia, Kayak and others?”
By a unanimous vote, it is clear that Google Inc (NASDAQ:GOOG) did not bias its search results, and thus it faces no meaningful regulation or fine (in the US). As per a report from Jefferies, the outcome is positive for the search engine giant, it resolves one of the largest overhangs for the stock. However, Google did negotiate minor concessions, including licensing certain standard-essential MMI patents on a fair, reasonable & non-discriminatory basis.