FTC Settled Google Antitrust Case Despite Staff Recommendation To Sue

FTC Settled Google Antitrust Case Despite Staff Recommendation To Sue
WDnetStudio / Pixabay

The staff of the Bureau of Competition of the Federal Trade Commission (FTC) recommended filing charges against Google after concluding in 2012 that the search engine giant engaged in anticompetitive practices.

The recommendation of the FTC staff was discovered by the Wall Street Journal after the commission inadvertently disclosed the staff memo and supporting documents in an open-records request.

Looking Into the Gaming Industry with VanEck’s JP Lee

Online, GamingValueWalk's Raul Panganiban interviews JP Lee, Product Managers at VanEck, and discusses the video gaming industry. Q4 2020 hedge fund letters, conferences and more The following is a computer generated transcript and may contain some errors. Interview With VanEck's JP Lee ValueWalk's ValueTalks ·

The FTC staff concluded that Google’s “conduct has resulted—and will result—in real harm to consumers and to innovation in the online search and advertising markets.”

The staff also indicated that Google is “maintaining its market share by providing the best user experience while simultaneously engaging in tactics that resulted in harm to many vertical competitors, and likely helped to entrench Google’s monopoly power over search and search advertising.”

Despite the conclusion of the FTC staff, the commissioners voted unanimously to end the antitrust investigation against Google in 2013. That raises the question if why did the FTC decide to end the investigation?

Reasons why FTC ended Google antitrust probe

Apparently, the FTC ended the antitrust investigation after Google agreed to change some of its practices. The search engine giant agreed to stop pulling down contents from competitors. It also agreed to provide its rivals more control over their advertisements. Google also agreed to consent over licensing patents.

With regard to the allegations regarding Google’s monopoly power over search advertising, the FTC explained, “the evidence does not support a claim that Google’s prominent display of its own content on its general search page was undertaken without legitimate justification.”

At the time, then FTC Chairman Jon Leibowitz also emphasized that the voluntary changes offered by Google provided “more relief for American consumers faster than any other option.”

The Wall Street Journal also noted that it is “unusual” for the FTC not to take the recommendations of the staff. However, the commissioners were “wrestling with competing recommendations” at the time. The FTC’s Economic Bureau did not favor legal action against Google.

Google’s comment

On Thursday, Google General Counsel Kent Walker issued a statement emphasizing that the FTC eventually agreed not to take legal action against the company after an exhaustive 19-month review, covering nine million pages of documents and many hours of testimony.

Walker said, “Speculation about potential consumer harm turned out to be entirely wrong. Since the investigation closed two years ago, the ways people access information online have only increased, giving consumers more choice than ever before. Our competitors are in fact thriving.”

He cited Yelp as an example since the online review company describes itself as a “de facto local search engine” and has achieved a revenue growth of more than 350% over the past four years. Walker also noted that TripAdvisor claimed that it is the “largest travel brand” online and its revenue doubled over the past four years.

No posts to display