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TECHNOLOGY

Google Defends Practices as FTC Launches Antitrust Probe

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Google acknowledges that it's being investigated by the Federal Trade Commission.(Richard A. Bloom)

Google confirmed Friday that the Federal Trade Commission has launched an antitrust investigation of the company, but posted an elaborate defense of its business practices.

"Yesterday, we received formal notification from the U.S. Federal Trade Commission that it has begun a review of our business," Google said in a blog post.

 

"We respect the FTC’s process and will be working with them (as we have with other agencies) over the coming months to answer questions about Google and our services," the post said.

On Thursday, Google filed documents with the FTC acknowledging that is had been subpoenaed by the agency. According to the document, the investigation will review “Google’s business practices, including search and advertising.”

Google is no stranger to antitrust investigations. In March, the Internet giant settled with the FTC over complaints that it violated consumers’ privacy with last year's rollout of its social-networking service Buzz. This latest probe, however, is likely to target Google's core search business.

 

In the blog post, Google fellow Amit Singhal defended the company and pointed out that no one is forced to use Google.

“It’s still unclear exactly what the FTC’s concerns are, but we’re clear about where we stand,” he wrote. “Since the beginning, we have been guided by the idea that, if we focus on the user, all else will follow. Using Google is a choice — and there are lots of other choices available to you for getting information: other general-interest search engines, specialized search engines, direct navigation to websites, mobile applications, social networks, and more.”

The Computer and Communications Industry Association, which counts Google as one of its members, said it supports an examination of complaints against Google but that the FTC should not engage in a "fishing expedition."

"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 to ensure compliance with the antitrust laws," CCIA President Ed Black said in a statement.

 

"We have not yet seen the type of credible evidence that would support a charge of abuse of market power, so the investigation should be helpful in identifying actual abuse or, as Google claims, in dispelling accusations designed to harass or distract the company as it competes," Black's statement said.

The group called on the FTC to stick to a “targeted investigation.”

Meanwhile, Consumer Watchdog, which has long criticized Google, sent a letter to the White House suggesting that administration officials avoid contact with company officials while the FTC conducts several investigations of Google’s practices.

"It is clear that hardworking dedicated federal employees are pursing significant investigations into Google’s activities. Unfortunately when top Administration officials entertain Google executives, it undercuts those investigations by sending the implicit message that the Administration supports Google," the the consumer advocacy group wrote.

Some legal experts were skeptical of the FTC’s efforts. Geoffrey Manne, senior adjunct fellow at think tank TechFreedom and lecturer in law at Lewis & Clark Law School, and Joshua Wright, professor of law & economics at George Mason University School of Law, said the case seemed to be based on the concerns of Google’s competitors.

“Google today is not the Microsoft of 1998, and even if it were, subsequent history has demonstrated that consumers are better served by letting rapid technological change play out in digital markets than by heavy-handed antitrust remedies,” they said in a statement released by TechFreedom. “The fact that Google's rivals -- including Microsoft itself -- are complaining about the company suggests, ironically, that Google's practices are in fact pro-competitive and thus pro-consumer.”

This article appears in the June 24, 2011 edition of National Journal Daily PM Update.

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