Report: Google Faces US Antitrust Case By End Of Year

Google could be hit with an antitrust case in the closing months of this year by the US Federal Trade Commission (FTC) as the government continues to probe the company’s operating practices in its search business.

[Update: the French watchdog’s demands have now been published]

Four of the FTC’s commissioners “have become convinced after more than a year of investigation that Google illegally used its dominance of the search market to hurt its rivals, while one commissioner is sceptical,” according to a 13 October news report from Reuters. Citing three unnamed people familiar with the matter, Reuters reported that “the majority of top decision makers at the FTC believe that an antitrust case should be brought against Google, meaning the search giant could soon be headed into tough negotiations”.

‘Formal review’

Google was first notified of a “formal review” of its business practices in June 2011 by the FTC, after similar reviews began in Europe. At that time, the European Commission launched an investigation into the company’s search practices after vertical search engines such as Foundem, eJustice.fr and Microsoft’s Ciao complained the company favoured its own web services in search results on Google.com over theirs. They argued that this put them at a significant competitive disadvantage in the market.

Google has faced similar accusations in the United States from Texas State Attorney General Gregg Abbott, who asked for reams of info on Google’s ad pricing, shopping search and the ranking of websites in search results and ad listings.

The initial FTC review in 2011 began after the agency heard complaints from Microsoft, Expedia, TripAdvisor, Yelp and other websites that Google promotes its own web services above those of competitors.

Google denied all such allegations at that time, noting that its search algorithms analyse website quality and popularity based on links for placement as part of its PageRank system.

Court fight

The FTC declined to comment on the report, according to Reuters. “FTC Chairman Jon Leibowitz said in mid-September that he expected a decision in the case by the end of the year,” Reuters reported. “If the agency finds that Google broke the law, the FTC and Google could hammer out a settlement that resolves the issues or, if settlement negotiations fail, the matter could end up in a lengthy, expensive court fight.”

In July, Google reached a record $22.5 million (£14m) settlement with the FTC to resolve charges that Google bypassed Apple Safari browser privacy settings that blocked cookies for their users. The settlement was criticised by the Competitive Enterprise Institute, an industry group, as “a dangerously overbroad precedent that will chill Internet innovation and hurt online startups”, the Institute said in a statement at that time.

The FTC charged that for several months in 2011 and 2012, Google placed a certain advertising tracking cookie on the computers of Safari users who visited sites within Google’s DoubleClick advertising network. It charged that Google placed the cookies on consumers’ computers in many cases by circumventing the Safari browser’s default cookie-blocking setting.

Cookie controversy

Placing the cookies on the computers of Safari browsers violated the terms of an October 2011 settlement between Google and the FTC over deceptive practices related to the launch of Google Buzz, a Google’s attempt to compete with Facebook in the social media space. Google later abandoned Buzz and went to work on its successor, Google +, which launched in June 2011.

Interestingly, on the heels of the $22.5 million FTC fine, Google in August began advertising to hire a new privacy engineer for its Privacy Red Team to add an extra layer of scrutiny to its security practices.

In a posting on the Google Jobs website, Google says it is seeking a new data privacy engineer to “help ensure that our products are designed to the highest standards and are operated in a manner that protects the privacy of our users. Specifically, you will work as a member of our Privacy Red Team to independently identify, research and help resolve potential privacy risks across all of our products, services and business processes in place today.”

A “red team” in enterprise IT typically is a fast-response group that pays extra attention to security and privacy issues at every level, making sure that systems, personnel and practices are secure.

Security efforts

Whether or not the new job posting is related to July’s $22.5 million FTC fine is sheer speculation, but it is possible that Google is expanding its security and privacy efforts to help it avoid future such incidents.

In April, the Federal Communications Commission fined Google $25,000 after finding the company “deliberately impeded and delayed” an investigation into how it collected data for Google Street View, a technology featured in Google Maps and Google Earth that provides a panoramic view from positions on streets across the world.

After the FCC fine, the Electronic Privacy Information Centre (EPIC) wrote a letter to the US Attorney General’s Office requesting an investigation into Google to determine if any laws had been broken.

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Originally published on eWeek.