Google may dodge antitrust fine

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IOL BR GOOGLE 175 (30755518) Bloomberg Tom Fitzgerald demonstrates upload speeds using GoogleEarth. The company is reportedly promising not to copy content from rival websites without permission in order to avoid any penalties to settle a US antitrust probe. Photo: Bloomberg.

Google was poised to offer voluntary concessions that would end a 20-month US antitrust probe of its business practices without any enforcement action being taken, two people familiar with the matter said yesterday.

Google, which has been under investigation by the Federal Trade Commission (FTC), was preparing a letter promising not to copy content from rival websites without permission and to allow advertisers to compare data from ad campaigns with their performance on other internet search engines, one of the people said.

That would bring the antitrust investigation to a close without a lawsuit or settlement, the sources, who asked not to be identified, said.

An end to the probe without enforcement action would be a blow to competitors including Microsoft, Yelp and Expedia.

An alliance of such e-commerce and web-search firms have pressed the agency to act, claiming Google’s dominance of internet search combined with favouring its own services in answers to queries violated antitrust laws.

Google spokesman Adam Kovacevich declined to comment on whether Google was preparing to announce concessions in the case or whether the FTC was preparing to close the matter without taking action.

FTC spokeswoman Cecelia Prewett also declined to comment.

“We continue to work co-operatively with the FTC and are happy to answer any questions they may have,” Kovacevich said.

Google has been engaged in settlement talks with the FTC for about two weeks.

The company has resisted the FTC’s efforts to reach a formal settlement agreement over allegations that it skews search results to favour its services, saying such an agreement may hurt its business prospects.

“Enforcement authorities should not allow Google to retain an unfair advantage in the market gained through years of anti-competitive behaviour,” Fairsearch.org, the alliance that includes Microsoft, said in a statement.

“If the FTC fails to take meaningful action after a nearly two-year investigation, Google will only be emboldened to act in ways that are more harmful to consumers and innovators.”

Fairsearch.org claims that Google puts its own restaurant reviews, maps and shopping services at the top of the results page and that the first three answers to a query garner 88 percent of users’ clicks.

“At a minimum, if the government is going to concede that the practice isn’t unlawful, it should make it clear that Google is favouring its own services,” said Gary Reback, an antitrust lawyer representing firms that have complained about Google’s practices.

Google’s position, made publicly by executive chairman Eric Schmidt during a Senate judiciary antitrust hearing in September last year, is that its rankings help consumers who seek the best direct answer to a query rather than links to other information sources.

“Our challenge is to return the most relevant answers first,” Schmidt said. “This means that not every website can come on top.”

Reback criticised the FTC’s investigation, saying many of his clients, which include NexTag and other shopping-comparison websites, received no follow-up questions, including about the anticompetitive effects of Google’s practices.

The agency has been under pressure to extract concessions from Google after winning a battle with the US Justice Department’s antitrust division over which regulator would probe the world’s most popular search engine.

Google is also in discussions with EU officials to resolve their antitrust concerns. Those include Google ranking its services higher than rivals’ offerings in search results, copying competitors’ web content, and making agreements with websites and developers that stifle competition in the advertising industry.

The attorneys-general of some states, including Texas, California, New York and Ohio, have also been investigating Google’s practices in internet search. – Sara Forden from Bloomberg


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