Original Story: engadget.com
Google might have avoided going to court over antitrust charges in the US, but it could still face a lawsuit in Europe. According to the Wall Street Journal, the European Commission has started asking companies that filed complaints against Google's practices for permission to publish the details in those documents. A Brussels lawyer representing one of Mountain View's competitors said: "The fact that the commission has been seeking fuller [information] from complainants, against short deadlines [of] a couple of days, shows it is in the final stages of getting a statement of objections together. It's part of the choreography you always see."
Most of the companies involved in the case run shopping, travel and local websites. If that sounds like deja vu, that's because the complaints Google is facing in the EU are similar in nature to the ones filed against it stateside. European companies also accuse the tech giant of gaming search results, placing its own products such as Google Shopping or Local in more prominent positions in the list, as well as burying competitors' websites. The commission is also investigating whether Mountain View really scrapes content from its rivals' websites to use as its own.
The European Union's antitrust authority has been looking into these supposed unfair practices since 2010. Google and EC's previous chief made numerous attempts to settle over the years, but they all ended up in failure. The new boss, Margrethe Vestager, isn't one for settlements, though, and has been very vocal about her preference for court proceedings. Mountain View, by the bye, continues to deny any wrongdoing. Just last week, general counsel Kent Walker listed a number of failed products (including Google+) during an event in Berlin, which he said serves as proof that his company plays by the book.
If the commission does file charges, Google will only have three months to convince the court that it didn't do anything to violate laws in the region. It could also try to come up with settlement terms politicians and corporations in the EU will finally agree to. If it fails to do so, it might have to pay an exceptionally hefty sum, seeing as Microsoft was fined $1.35 billion for antitrust charges a few years ago.
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Showing posts with label antitrust lawsuit. Show all posts
Showing posts with label antitrust lawsuit. Show all posts
Wednesday, April 08, 2015
Monday, January 07, 2013
Critics of Google Antitrust Ruling Fault the Focus
originally appeared in The New York Times:
One of the more surprising conclusions drawn by the Federal Trade Commission when it dropped its nearly two-year antitrust investigation into Google last week was that Google, far from harming consumers, had actually helped them.
But some critics of the inquiry now contend that the commission found no harm in Google’s actions because it was looking at the wrong thing.
Instead of considering harm to people who come to Google to search for information, Google’s competitors and their supporters say that the government should have been looking at whether Google’s actions harmed its real customers — the companies that pay billions of dollars each year to advertise on Google’s site.
In its reports, the F.T.C. did not detail how it defined harm or what quantitative measures it had used to determine that Google users were better off.
But interviews with people on all sides of the investigation — government officials, Google supporters, advocates for Microsoft and other competitors, and antitrust experts and economists — show that many of the yardsticks the commission used to measure its outcomes were remarkably similar to Google’s own. Not surprisingly, they cast Google in a favorable light.
At issue were changes that Google made in recent years to its popular search page. Google makes frequent adjustments to the formulas that determine what results are generated when a user enters a search. Currently, it makes more than 500 changes a year, or more than one each day.
Users rarely notice the changes in the formulas, or algorithms, that generate search results, but businesses do. If a change in the formulas causes a business to rank lower in the order of results generated by a search, it is likely to miss potential customers.
What customers are now seeing reflects changes in the format of Google results. For certain categories of searches — travel information, shopping comparisons and financial data, for example — Google has begun presenting links to its own related services.
People close to the investigation said that Google had presented the F.T.C. with the results of tests with focus groups hired by an outside firm to review different versions of a Google search results page. After Google acquired ITA, a travel search business, in 2011, it began testing a new way to display flight results.
The company asked test users to compare side-by-side examples of a results page with just the familiar 10 blue links to specialty travel sites with a page that had at the top a box containing direct links to airlines and fares.
People who reviewed the Google data said tests with hundreds of people showed that fewer than one in five users preferred the page with links only. Users said they liked the box of flight results, so Google reasoned that making the change was better for the consumer.
There is a deep science to search evaluation, according to a senior vice president who oversees Google’s search operation, said in an interview on Friday. A lot of work goes into every change we make.
But the changes were not better for companies or alternative travel sites that were pushed off the first page of results by Google’s flight box and associated links. By pushing links to competing sites lower, Google might be making things easier for people who come to it for free search. But it also is having a negative effect on competitors, shutting off traffic for those sites.
Drawing fewer customers as a result of Google’s free links, those competitors are forced to advertise more to draw traffic. And advertisers who aren’t competitors have fewer places to go to reach consumers, meaning Google can use its market power to raise advertising prices.
There might be no consumer harm if Google eliminates Yelp, said one Microsoft advocate, who spoke on the condition of anonymity because of the likelihood of further interactions with the F.T.C. But advertisers certainly are harmed.
Google’s suggestion that the correct way to measure the benefit of a design change was through user appreciation seemed to strike a chord with the commission. In its statement explaining why it took no action against Google on search bias, the F.T.C. said that the documents, testimony and qualitative evidence the commission examined are largely consistent with the conclusion that Google likely benefited consumers by prominently displaying its vertical content on its search results page.
F.T.C. officials said they considered data from a wide range of sources — those with interests aligned with Google as well as against it. The officials also bought quantitative data about Internet usage and conducted interviews with experts who were independent of all sides.
None of the data was taken strictly at face value, according to the director of the F.T.C.’s Bureau of Economics, said in an interview. We kick the tires hard on all of the data we receive.
While some of Google’s competitors might have suffered when Google made changes to the way it generated and displayed search results, the F.T.C. said, the totality of the evidence showed that any negative impact on actual or potential competitors was incidental.
The five commissioners at the F.T.C. voted unanimously not to pursue a case accusing Google of using unfair competition to enhance its search business. One of those commissioners, however, warned that there was little to prevent Google from misrepresenting the value of the changes it made to its search methods.
That commissioner, a Republican who criticized the F.T.C.’s decision not to seek a court order preventing Google from certain actions, said, Nothing in this ‘settlement’ prevents Google from telling ‘half truths’ — for example, that its gathering of information about the characteristics of a consumer is done solely for the consumer’s benefit, instead of also to maintain a monopoly or near monopoly position.
Google’s interest in maintaining its market dominance — it accounts for about 70 percent of all searches in the United States — goes beyond its dedication to improving the experience for users, of course.
The F.T.C. chairman, said that while some evidence suggested that Google was trying to eliminate competition, that was not necessarily illegal. Some may believe the commission should have done more in this case, because they are locked in hand-to-hand combat with Google around the world and have the mistaken belief that criticizing us will influence the outcome in other jurisdictions, he said.
The commissioners also appeared to view Google’s changes to its results pages as a design issue as much as an antitrust one. Product design is an important dimension of competition, the commission wrote, and condemning legitimate product improvements risks harming consumers.
One of the more surprising conclusions drawn by the Federal Trade Commission when it dropped its nearly two-year antitrust investigation into Google last week was that Google, far from harming consumers, had actually helped them.
But some critics of the inquiry now contend that the commission found no harm in Google’s actions because it was looking at the wrong thing.
Instead of considering harm to people who come to Google to search for information, Google’s competitors and their supporters say that the government should have been looking at whether Google’s actions harmed its real customers — the companies that pay billions of dollars each year to advertise on Google’s site.
In its reports, the F.T.C. did not detail how it defined harm or what quantitative measures it had used to determine that Google users were better off.
But interviews with people on all sides of the investigation — government officials, Google supporters, advocates for Microsoft and other competitors, and antitrust experts and economists — show that many of the yardsticks the commission used to measure its outcomes were remarkably similar to Google’s own. Not surprisingly, they cast Google in a favorable light.
At issue were changes that Google made in recent years to its popular search page. Google makes frequent adjustments to the formulas that determine what results are generated when a user enters a search. Currently, it makes more than 500 changes a year, or more than one each day.
Users rarely notice the changes in the formulas, or algorithms, that generate search results, but businesses do. If a change in the formulas causes a business to rank lower in the order of results generated by a search, it is likely to miss potential customers.
What customers are now seeing reflects changes in the format of Google results. For certain categories of searches — travel information, shopping comparisons and financial data, for example — Google has begun presenting links to its own related services.
People close to the investigation said that Google had presented the F.T.C. with the results of tests with focus groups hired by an outside firm to review different versions of a Google search results page. After Google acquired ITA, a travel search business, in 2011, it began testing a new way to display flight results.
The company asked test users to compare side-by-side examples of a results page with just the familiar 10 blue links to specialty travel sites with a page that had at the top a box containing direct links to airlines and fares.
People who reviewed the Google data said tests with hundreds of people showed that fewer than one in five users preferred the page with links only. Users said they liked the box of flight results, so Google reasoned that making the change was better for the consumer.
There is a deep science to search evaluation, according to a senior vice president who oversees Google’s search operation, said in an interview on Friday. A lot of work goes into every change we make.
But the changes were not better for companies or alternative travel sites that were pushed off the first page of results by Google’s flight box and associated links. By pushing links to competing sites lower, Google might be making things easier for people who come to it for free search. But it also is having a negative effect on competitors, shutting off traffic for those sites.
Drawing fewer customers as a result of Google’s free links, those competitors are forced to advertise more to draw traffic. And advertisers who aren’t competitors have fewer places to go to reach consumers, meaning Google can use its market power to raise advertising prices.
There might be no consumer harm if Google eliminates Yelp, said one Microsoft advocate, who spoke on the condition of anonymity because of the likelihood of further interactions with the F.T.C. But advertisers certainly are harmed.
Google’s suggestion that the correct way to measure the benefit of a design change was through user appreciation seemed to strike a chord with the commission. In its statement explaining why it took no action against Google on search bias, the F.T.C. said that the documents, testimony and qualitative evidence the commission examined are largely consistent with the conclusion that Google likely benefited consumers by prominently displaying its vertical content on its search results page.
F.T.C. officials said they considered data from a wide range of sources — those with interests aligned with Google as well as against it. The officials also bought quantitative data about Internet usage and conducted interviews with experts who were independent of all sides.
None of the data was taken strictly at face value, according to the director of the F.T.C.’s Bureau of Economics, said in an interview. We kick the tires hard on all of the data we receive.
While some of Google’s competitors might have suffered when Google made changes to the way it generated and displayed search results, the F.T.C. said, the totality of the evidence showed that any negative impact on actual or potential competitors was incidental.
The five commissioners at the F.T.C. voted unanimously not to pursue a case accusing Google of using unfair competition to enhance its search business. One of those commissioners, however, warned that there was little to prevent Google from misrepresenting the value of the changes it made to its search methods.
That commissioner, a Republican who criticized the F.T.C.’s decision not to seek a court order preventing Google from certain actions, said, Nothing in this ‘settlement’ prevents Google from telling ‘half truths’ — for example, that its gathering of information about the characteristics of a consumer is done solely for the consumer’s benefit, instead of also to maintain a monopoly or near monopoly position.
Google’s interest in maintaining its market dominance — it accounts for about 70 percent of all searches in the United States — goes beyond its dedication to improving the experience for users, of course.
The F.T.C. chairman, said that while some evidence suggested that Google was trying to eliminate competition, that was not necessarily illegal. Some may believe the commission should have done more in this case, because they are locked in hand-to-hand combat with Google around the world and have the mistaken belief that criticizing us will influence the outcome in other jurisdictions, he said.
The commissioners also appeared to view Google’s changes to its results pages as a design issue as much as an antitrust one. Product design is an important dimension of competition, the commission wrote, and condemning legitimate product improvements risks harming consumers.
In Google Patent Case, F.T.C. Set Rules of Engagement for Battles
originally appeared in The New York Times:
The Federal Trade Commission’s antitrust investigation of Google focused mainly on the company’s lucrative search business, while its inquiry into the tech giant’s handling of patents seemed an afterthought.
Yet even as Google made only a few voluntary promises on search, it agreed to a legal settlement on patents that the commission chairman, called a landmark enforcement action that applies to huge high-tech markets like smartphones and tablet computers.
The commission action by no means spells the end of the smartphone patent wars, a global conflict in which major corporations including Apple, Samsung and Google have spent billions amassing patent portfolios and then suing and countersuing one another in courts around the world. But legal experts say Google’s settlement with the F.T.C. signals progress in clarifying the rules of engagement in high-tech patent battles, and thus could ease them.
The agreement represents a significant stride forward in reducing the confusion and uncertainty that currently surrounds how these patents can be used, according to a patent expert at the Santa Clara University School of Law.
The commission’s settlement with Google, announced on Thursday, focused on patents covering communications and data transmission technologies that are crucial for the basic operation of smartphones and tablets — what are known as standard-essential patents. (There are many other patents in mobile devices, covering physical design and software features.) The legal gamesmanship of the epic smartphone patent battles, according to economists and technology experts, consumes time and investment that could be better used to develop new products. In his comments on Thursday, the commission chairman pointed to those concerns. Today’s commission action, he said, will also relieve companies of some of the costly and inefficient burden of hoarding patents for purely defensive purposes, savings that we hope can be invested in job-creating research and development.
Under the settlement, Google agreed to license its standard-essential patents to other companies on “fair and reasonable” terms. It also agreed not to seek court injunctions to halt the shipment of smartphones, tablets and other devices that use its standard patents.
The issue arose from Google’s $12.5 billion purchase of Motorola Mobility, announced in 2011 and completed last year. Google acquired Motorola partly to defend itself and the smartphone makers that use its Android software after rivals had already loaded up on patents.
With the acquisition, Google picked up 17,000 patents, including many relating to wireless devices that Motorola, a pioneer in the wireless phone business, had pledged to license on reasonable terms. Those commitments were made to technology standards organizations, intended to assure that basic technical innovations are widely available, stimulating growth in the industry.
Over the years, according to the commission chairman, companies took Motorola at its word and developed products assuming they could routinely license Motorola’s patents. But Motorola later refused to license its standard-essential patents and sought court injunctions to stop shipment of rival products.
After Google purchased Motorola, he said, it continued these same abusive practices.
In recent months, the F.T.C. has issued position papers and filed friend-of-the-court briefs, opposing the motions for injunctions using standard patents. The Justice Department and European regulators have echoed the commission’s stance.
Regulators around the world have become increasingly sensitive to just how important technical standards and standards-setting bodies are to the modern system of economic innovation, according to an economist at Harvard Business School.
The threat of court injunctions to stop shipment of products, economists say, is the factor that drives up the cost of patent wars. Because an injunction could be devastating, companies will pay dearly to remove that risk, settling with a plaintiff or spending on patents to build a defensive arsenal.
Some courts have recently resisted granting injunctions based on standard patents. Google’s settlement with the F.T.C., according to a former chief economist in the Justice Department’s antitrust division, helps solidify the move to stop injunctions in standard-essential patent cases, which is great.
A professor at the University of California, Berkeley, said that courts had also been more hesitant recently to grant injunctions in cases that did not involve standard patents. In suits involving smartphones and tablets — amalgams of hardware, software and telecommunications technologies covered by many thousands of patents — judges are sometimes less likely to halt the shipment of a device based on a few infringing patents.
Last month, for example, a Federal District Court judge in San Jose, Calif., denied Apple’s motion for an injunction against Samsung products. In August, a jury in that court found that Samsung products infringed on a handful of Apple design and software patents, and awarded Apple $1.05 billion in damages.
The judge declined to grant Apple’s motion for injunction, essentially saying that Apple’s claim was outweighed by the public interest in keeping Samsung shipments flowing. Apple is appealing the ruling.
The courts seem to be moving toward taking a dimmer view of injunctions generally, he said. That’s a big deal.
The Federal Trade Commission’s antitrust investigation of Google focused mainly on the company’s lucrative search business, while its inquiry into the tech giant’s handling of patents seemed an afterthought.
Yet even as Google made only a few voluntary promises on search, it agreed to a legal settlement on patents that the commission chairman, called a landmark enforcement action that applies to huge high-tech markets like smartphones and tablet computers.
The commission action by no means spells the end of the smartphone patent wars, a global conflict in which major corporations including Apple, Samsung and Google have spent billions amassing patent portfolios and then suing and countersuing one another in courts around the world. But legal experts say Google’s settlement with the F.T.C. signals progress in clarifying the rules of engagement in high-tech patent battles, and thus could ease them.
The agreement represents a significant stride forward in reducing the confusion and uncertainty that currently surrounds how these patents can be used, according to a patent expert at the Santa Clara University School of Law.
The commission’s settlement with Google, announced on Thursday, focused on patents covering communications and data transmission technologies that are crucial for the basic operation of smartphones and tablets — what are known as standard-essential patents. (There are many other patents in mobile devices, covering physical design and software features.) The legal gamesmanship of the epic smartphone patent battles, according to economists and technology experts, consumes time and investment that could be better used to develop new products. In his comments on Thursday, the commission chairman pointed to those concerns. Today’s commission action, he said, will also relieve companies of some of the costly and inefficient burden of hoarding patents for purely defensive purposes, savings that we hope can be invested in job-creating research and development.
Under the settlement, Google agreed to license its standard-essential patents to other companies on “fair and reasonable” terms. It also agreed not to seek court injunctions to halt the shipment of smartphones, tablets and other devices that use its standard patents.
The issue arose from Google’s $12.5 billion purchase of Motorola Mobility, announced in 2011 and completed last year. Google acquired Motorola partly to defend itself and the smartphone makers that use its Android software after rivals had already loaded up on patents.
With the acquisition, Google picked up 17,000 patents, including many relating to wireless devices that Motorola, a pioneer in the wireless phone business, had pledged to license on reasonable terms. Those commitments were made to technology standards organizations, intended to assure that basic technical innovations are widely available, stimulating growth in the industry.
Over the years, according to the commission chairman, companies took Motorola at its word and developed products assuming they could routinely license Motorola’s patents. But Motorola later refused to license its standard-essential patents and sought court injunctions to stop shipment of rival products.
After Google purchased Motorola, he said, it continued these same abusive practices.
In recent months, the F.T.C. has issued position papers and filed friend-of-the-court briefs, opposing the motions for injunctions using standard patents. The Justice Department and European regulators have echoed the commission’s stance.
Regulators around the world have become increasingly sensitive to just how important technical standards and standards-setting bodies are to the modern system of economic innovation, according to an economist at Harvard Business School.
The threat of court injunctions to stop shipment of products, economists say, is the factor that drives up the cost of patent wars. Because an injunction could be devastating, companies will pay dearly to remove that risk, settling with a plaintiff or spending on patents to build a defensive arsenal.
Some courts have recently resisted granting injunctions based on standard patents. Google’s settlement with the F.T.C., according to a former chief economist in the Justice Department’s antitrust division, helps solidify the move to stop injunctions in standard-essential patent cases, which is great.
A professor at the University of California, Berkeley, said that courts had also been more hesitant recently to grant injunctions in cases that did not involve standard patents. In suits involving smartphones and tablets — amalgams of hardware, software and telecommunications technologies covered by many thousands of patents — judges are sometimes less likely to halt the shipment of a device based on a few infringing patents.
Last month, for example, a Federal District Court judge in San Jose, Calif., denied Apple’s motion for an injunction against Samsung products. In August, a jury in that court found that Samsung products infringed on a handful of Apple design and software patents, and awarded Apple $1.05 billion in damages.
The judge declined to grant Apple’s motion for injunction, essentially saying that Apple’s claim was outweighed by the public interest in keeping Samsung shipments flowing. Apple is appealing the ruling.
The courts seem to be moving toward taking a dimmer view of injunctions generally, he said. That’s a big deal.
Europe Likely to Be Harder on Google Over Search
originally appeared in The New York Times:
By some accounts, the United States let Google off the hook when it found that the technology giant had not abused its dominance in the Internet search market.
Few expect the European antitrust watchdog to be as lenient.
The Federal Trade Commission ruled on Thursday that Google had not broken antitrust laws, after a 19-month inquiry into how it operated its search engine. But the European Commission, which is pursuing claims that the company rigs results to favor its own businesses, operates under a different standard.
The agreement with the American authorities, analysts and competition lawyers say, is unlikely to alter the demands of European regulators, led by the competition commissioner, Joaquín Almunia.
We have taken note of the F.T.C. decision, but we don’t see that it has any direct implications for our investigation, for our discussions with Google, which are ongoing, according to a spokesman for the European Commission in Brussels.
Faced with nearly $4 billion in possible penalties and restrictions on its business in Europe, Google submitted proposals in July to remedy the concerns of the European Commission, which covered four areas. In its deal with the F.T.C., Google made concessions in two of those areas but was not required to do so in the rest.
A Google spokesman declined to comment on the content of the company’s proposals to Mr. Almunia but said the company would continue to work cooperatively with the European Commission.
The Google case underscores a basic difference between the approaches to monopoly power in Europe and the United States. American antitrust regulators tend to focus on whether a company’s dominance harms consumers; the European system seeks to keep competitors in the market. The Google spokesman has vowed to restore competition to the Internet search business in Europe.
History shows that competition law is applied to monopoly power more stringently in the E.U. than in the U.S., according to the head of the competition practice at Avisa Partners, a consultancy in Brussels, who brought one of the original complaints against Google. Whether the E.U. is right or not is a different question.
He has some expertise in the matter. He is the former head of corporate affairs at Microsoft Europe and watched as that company did battle with regulators over its dominant computer operating system. Microsoft won a lenient settlement with the Justice Department in October 2001, he said, only to be slapped with nearly 1.6 billion euros, or $2.1 billion, in fines and penalties from the European Union from 2004 to 2008.
Google learned from Microsoft’s mistakes. It worked with authorities in both the United States and Europe to reach a deal rather than fight a desperate legal action. That approach appears to have paid off: last month, after a meeting with Eric E. Schmidt, Google’s executive chairman, the head of the competition practice said that the sides had substantially reduced our differences.
In its deal with the F.T.C., Google agreed to make concessions in two areas that concerned European regulators. In one, it will allow rivals to opt out of allowing Google to “scrape,” or copy, text from their sites. Google will probably offer the same concession to European authorities.
But in a second area of European concern — whether Google deliberately favors its own content in search results — the F.T.C. did not require changes.
The head of the competition practice has also demanded that Google put fewer restrictions on advertising distribution deals, an area his American counterparts did not explore.
The company will make a detailed set of proposed remedies in January. The European Commission will then allow the complainants to review them in a period of what is known as “market testing.” Antitrust lawyers say a final denouement could arrive by spring, depending on how hostile Google’s rivals are to the proposed remedies.
FairSearch, an alliance of Google rivals, accused the F.T.C. of rushing its decision. It said in a statement that closing the F.T.C. investigation with only voluntary commitments from Google is disappointing and premature.
The outcome in Europe may also be affected by Google’s dominance there. Google’s share of the United States search market was 67 percent in November, according to comScore, a digital analytics company, while its share in Europe was 83 percent that month.
By some accounts, the United States let Google off the hook when it found that the technology giant had not abused its dominance in the Internet search market.
Few expect the European antitrust watchdog to be as lenient.
The Federal Trade Commission ruled on Thursday that Google had not broken antitrust laws, after a 19-month inquiry into how it operated its search engine. But the European Commission, which is pursuing claims that the company rigs results to favor its own businesses, operates under a different standard.
The agreement with the American authorities, analysts and competition lawyers say, is unlikely to alter the demands of European regulators, led by the competition commissioner, Joaquín Almunia.
We have taken note of the F.T.C. decision, but we don’t see that it has any direct implications for our investigation, for our discussions with Google, which are ongoing, according to a spokesman for the European Commission in Brussels.
Faced with nearly $4 billion in possible penalties and restrictions on its business in Europe, Google submitted proposals in July to remedy the concerns of the European Commission, which covered four areas. In its deal with the F.T.C., Google made concessions in two of those areas but was not required to do so in the rest.
A Google spokesman declined to comment on the content of the company’s proposals to Mr. Almunia but said the company would continue to work cooperatively with the European Commission.
The Google case underscores a basic difference between the approaches to monopoly power in Europe and the United States. American antitrust regulators tend to focus on whether a company’s dominance harms consumers; the European system seeks to keep competitors in the market. The Google spokesman has vowed to restore competition to the Internet search business in Europe.
History shows that competition law is applied to monopoly power more stringently in the E.U. than in the U.S., according to the head of the competition practice at Avisa Partners, a consultancy in Brussels, who brought one of the original complaints against Google. Whether the E.U. is right or not is a different question.
He has some expertise in the matter. He is the former head of corporate affairs at Microsoft Europe and watched as that company did battle with regulators over its dominant computer operating system. Microsoft won a lenient settlement with the Justice Department in October 2001, he said, only to be slapped with nearly 1.6 billion euros, or $2.1 billion, in fines and penalties from the European Union from 2004 to 2008.
Google learned from Microsoft’s mistakes. It worked with authorities in both the United States and Europe to reach a deal rather than fight a desperate legal action. That approach appears to have paid off: last month, after a meeting with Eric E. Schmidt, Google’s executive chairman, the head of the competition practice said that the sides had substantially reduced our differences.
In its deal with the F.T.C., Google agreed to make concessions in two areas that concerned European regulators. In one, it will allow rivals to opt out of allowing Google to “scrape,” or copy, text from their sites. Google will probably offer the same concession to European authorities.
But in a second area of European concern — whether Google deliberately favors its own content in search results — the F.T.C. did not require changes.
The head of the competition practice has also demanded that Google put fewer restrictions on advertising distribution deals, an area his American counterparts did not explore.
The company will make a detailed set of proposed remedies in January. The European Commission will then allow the complainants to review them in a period of what is known as “market testing.” Antitrust lawyers say a final denouement could arrive by spring, depending on how hostile Google’s rivals are to the proposed remedies.
FairSearch, an alliance of Google rivals, accused the F.T.C. of rushing its decision. It said in a statement that closing the F.T.C. investigation with only voluntary commitments from Google is disappointing and premature.
The outcome in Europe may also be affected by Google’s dominance there. Google’s share of the United States search market was 67 percent in November, according to comScore, a digital analytics company, while its share in Europe was 83 percent that month.
Monday, June 11, 2012
Google Under Investigation by FTC
The Google Inc. co-founders are slated for questioning by U.S. antitrust regulators and hired a top Washington law firm to help them prepare for their interviews, two people familiar with the matter said.
The Google executives retained Williams & Connolly LLP, the Washington law firm that has represented President Bill Clinton, former Federal Reserve Chairman Alan Greenspan and the late Senator Edward Kennedy, as counsel for the depositions, said the people, who didn’t want to be identified because they weren’t authorized to speak publicly about the matter. They didn’t know when the interviews are scheduled to take place.
The Google Chairman was questioned by the FTC June 5, another person familiar with the matter said.
Plans for the depositions come as the Federal Trade Commission speeds up its antitrust probe of operator of the world’s most popular Internet search engine. The agency’s chairman, said June 6 that he expects to complete the investigation by the end of the year. The FTC will then decide whether to sue Google.
Google disclosed on June 24 that the FTC had begun a review of its business practices. The FTC is focusing on whether Google unfairly ranks search results to favor its own businesses and increases advertising rates for competitors, people familiar with the investigation have said.
Answer Questions
Google states that they are happy to explain our business to regulators and answer any questions they may have.
In April, the FTC hired a Washington litigator to run the antitrust investigation, signaling that the agency may be building a case against Google.
The Google executives retained Williams & Connolly LLP, the Washington law firm that has represented President Bill Clinton, former Federal Reserve Chairman Alan Greenspan and the late Senator Edward Kennedy, as counsel for the depositions, said the people, who didn’t want to be identified because they weren’t authorized to speak publicly about the matter. They didn’t know when the interviews are scheduled to take place.
The Google Chairman was questioned by the FTC June 5, another person familiar with the matter said.
Plans for the depositions come as the Federal Trade Commission speeds up its antitrust probe of operator of the world’s most popular Internet search engine. The agency’s chairman, said June 6 that he expects to complete the investigation by the end of the year. The FTC will then decide whether to sue Google.
Google disclosed on June 24 that the FTC had begun a review of its business practices. The FTC is focusing on whether Google unfairly ranks search results to favor its own businesses and increases advertising rates for competitors, people familiar with the investigation have said.
Answer Questions
Google states that they are happy to explain our business to regulators and answer any questions they may have.
In April, the FTC hired a Washington litigator to run the antitrust investigation, signaling that the agency may be building a case against Google.
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Tuesday, June 05, 2012
FTC Has Lunch with Google Exec
Story first appeared in Bloomberg Businessweek.
The U.S. Federal Trade Commission Chairman took time away from a Southern California technology conference to dine with a senior executive at Google Inc., the subject of an intensifying government antitrust probe.
The FTC chairman had lunch yesterday with Google’s senior vice president of advertising, at Catalina Kitchen at the Terranea Resort in Rancho Palos Verdes. The pair were attending the D10 conference, put on by technology blog AllThingsD.
Google's senior VP of advertising spearheaded Google’s $3.1 billion acquisition of DoubleClick Inc., an Internet-advertising company, and was involved in Google’s purchase of AdMob Inc., which specializes in mobile ads. Google’s advertising practices are part of the FTC’s antitrust investigation.
The agency is examining whether the company unfairly increases ad rates for competitors, people familiar with the matter have said. FTC officials have also asked rival shopping and review websites whether Google sells them prime advertising space on search results pages, people with knowledge of the matter said earlier this month.
The FTC is seeking to determine whether Google is using its dominance to thwart competition among Internet companies. Google was used in 67 percent of U.S. searches in April, according to ComScore Inc., a Reston, Virginia-based market researcher.
There are certainly allegations that the search results have changed or evolved over the years. The FTC is trying to figure out if the evidence is there and what the theories are.
Investigation Intensifies
In a separate interview yesterday with Bloomberg, Leibowitz said he recently held meetings with executives at Square Inc., Reputation.com Inc., Zynga Inc. and Mozilla Corp. to discuss online privacy.
It’s valuable to keep lines of communication open” with leaders in the technology industry.
The investigation of Mountain View, California-based Google has intensified in recent weeks as agency lawyers prepare to question the company’s chairman and its chief defender against antitrust charges.
The agency in April hired a top Washington litigator, to run the antitrust investigation. The FTC CHairman states that when presented the opportunity to get someone of her stature and abilities, you would always want to take her up on it. It doesn’t mean that we’ve decided to bring a case at all, it just means that we have very competent counsel who can go toe-to-toe with Google's very competent counsel.
Google Shopping
Google said in a blog post yesterday that it’s starting a product-search service Google Shopping and will require retailers to pay for inclusion in the listings. Google rivals have criticized the company for giving preference to Google product listings in search results.
The charges to manufacturers and retailers represent a change in Google’s practices, an Internet search analyst, said in a column this week on the Marketing Land blog. In its 2004 initial public offering letter, Google said the company wouldn’t accept payment for including specific search results.
The U.S. Federal Trade Commission Chairman took time away from a Southern California technology conference to dine with a senior executive at Google Inc., the subject of an intensifying government antitrust probe.
The FTC chairman had lunch yesterday with Google’s senior vice president of advertising, at Catalina Kitchen at the Terranea Resort in Rancho Palos Verdes. The pair were attending the D10 conference, put on by technology blog AllThingsD.
Google's senior VP of advertising spearheaded Google’s $3.1 billion acquisition of DoubleClick Inc., an Internet-advertising company, and was involved in Google’s purchase of AdMob Inc., which specializes in mobile ads. Google’s advertising practices are part of the FTC’s antitrust investigation.
The agency is examining whether the company unfairly increases ad rates for competitors, people familiar with the matter have said. FTC officials have also asked rival shopping and review websites whether Google sells them prime advertising space on search results pages, people with knowledge of the matter said earlier this month.
The FTC is seeking to determine whether Google is using its dominance to thwart competition among Internet companies. Google was used in 67 percent of U.S. searches in April, according to ComScore Inc., a Reston, Virginia-based market researcher.
There are certainly allegations that the search results have changed or evolved over the years. The FTC is trying to figure out if the evidence is there and what the theories are.
Investigation Intensifies
In a separate interview yesterday with Bloomberg, Leibowitz said he recently held meetings with executives at Square Inc., Reputation.com Inc., Zynga Inc. and Mozilla Corp. to discuss online privacy.
It’s valuable to keep lines of communication open” with leaders in the technology industry.
The investigation of Mountain View, California-based Google has intensified in recent weeks as agency lawyers prepare to question the company’s chairman and its chief defender against antitrust charges.
The agency in April hired a top Washington litigator, to run the antitrust investigation. The FTC CHairman states that when presented the opportunity to get someone of her stature and abilities, you would always want to take her up on it. It doesn’t mean that we’ve decided to bring a case at all, it just means that we have very competent counsel who can go toe-to-toe with Google's very competent counsel.
Google Shopping
Google said in a blog post yesterday that it’s starting a product-search service Google Shopping and will require retailers to pay for inclusion in the listings. Google rivals have criticized the company for giving preference to Google product listings in search results.
The charges to manufacturers and retailers represent a change in Google’s practices, an Internet search analyst, said in a column this week on the Marketing Land blog. In its 2004 initial public offering letter, Google said the company wouldn’t accept payment for including specific search results.
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Monday, September 20, 2010
U.S. Tech Probe Nears End
The Wall Street Journal
Several of the U.S.'s largest technology companies are in advanced talks with the Justice Department to avoid a court battle over whether they colluded to hold down wages by agreeing not to poach each other's employees.
The companies, which include Google Inc., Apple Inc., Intel Corp., Adobe Systems Inc., Intuit Inc. and Walt Disney Co. unit Pixar Animation, are in the final stages of negotiations with the government, according to people familiar with the matter.
The talks are still fluid, these people said, with some companies more willing to settle to avoid an antitrust case than others. If negotiations falter, both sides could be headed for a defining court battle that could help decide the legality of such arrangements throughout the U.S. economy.
Still, there are powerful incentives for both sides to settle the potential civil case before it reaches that stage.
The Justice Department would have to convince a court not just that such accords existed, but that workers had suffered significant harm as a result.
The companies may not want to take a chance in court. If the government wins, it could open the floodgates for private claimants, even a class action by employees. A settlement would allow the Justice Department to halt the practice, without the companies having to admit to any legal violations.
Spokespeople for Google, Apple, Intel, Adobe and Intuit all declined to comment. Pixar had no immediate comment. A Justice Department spokeswoman also declined to comment.
The Justice Department's probe of hiring practices could reach beyond Silicon Valley.
During the course of its more than year-long investigation, the agency has uncovered evidence of such agreements in other sectors, according to the people familiar with the matter.
A settlement with tech companies—or a court fight—could therefore help determine what kinds of agreements are acceptable in other industries as well.
At stake are dueling visions of how far companies should be able to go in agreeing to limit the kind of headhunting that can help valuable employees increase their compensation.
The companies have argued to the government that there's nothing anticompetitive about the no-poaching agreements. They say they must be able to offer each other assurances that they won't lure away each others' star employees if they are to collaborate on key innovations that ultimately benefit the consumer such as improved Google SEO.
Some economists believe that banning such agreements could harm Silicon Valley's open, collaborative model.
"The effect of the lawsuit would be to reduce innovation because companies would worry about exposing their employees to each other," said Paul Rubin, an economics professor at Emory University, who isn't involved in the case.
For the Justice Department, such agreements amount to an effort by companies to limit competition for talent, harming employees' ability to get the best jobs and wages and reducing the incentives for people to enter professions in high demand, according to people familiar with the matter.
The government could argue that the agreements constitute an effort by companies to fix the price of labor, and are therefore just as harmful as price-fixing or bid-rigging—automatic violations of antitrust law.
"In a free market economy, you want the best people getting the best positions, and presumably all the rewards that come with that," said Spencer Waller, a law professor at Loyola University Chicago, who has no connection to the case. "This agreement, if the government has the facts, suggests that market for talent is being depressed by collusion."
The agreements under investigation varied in their scope and details, according to the people familiar with the matter. In conversations with the Justice Department, some companies have maintained they didn't have agreements not to hire each others' employees, only agreements not to "cold-call" partners' employees.
However, people familiar with the matter say the Justice Department believes that cold-calling is an important way in which people are hired in the sector. Even if the employees don't end up moving, their employer often has to sweeten their pay and conditions to make sure they stay.
After more than a year of investigation, the Justice Department antitrust division has concluded that many of these agreements have harmed people's ability to get better jobs or improve their conditions.
But proving that in court may be tricky, some antitrust lawyers said.
During the course of the investigation, more than a dozen tech companies have been questioned by the Justice Department, people familiar with the matter said. Those include Yahoo Inc., Genentech Inc. and IAC/InterActiveCorp.
However, some companies said they are no longer in the government's cross-hairs. "After a thorough investigation, the [Justice Department] antitrust division has advised IBM that it will not pursue a case against IBM," an International Business Machines Corp. spokesman said.
Microsoft Corp. also said it is no longer a target of the investigation. A Genentech spokeswoman said the Justice Deparment had relieved the biotech firm of the obligation to hold on to relevant information.
A Yahoo spokeswoman said the company fully cooperated in the investigation and believed its responses were sufficient. IAC didn't respond to requests for comment.
The agency has decided not to pursue charges against companies that had what it believes were legitimate reasons for agreeing not to poach each other's employees, said people familiar with the matter. Instead, it's focusing on cases in which it believes the non-solicit agreement extended well beyond the scope of any collaboration.
The companies, which include Google Inc., Apple Inc., Intel Corp., Adobe Systems Inc., Intuit Inc. and Walt Disney Co. unit Pixar Animation, are in the final stages of negotiations with the government, according to people familiar with the matter.
The talks are still fluid, these people said, with some companies more willing to settle to avoid an antitrust case than others. If negotiations falter, both sides could be headed for a defining court battle that could help decide the legality of such arrangements throughout the U.S. economy.
Still, there are powerful incentives for both sides to settle the potential civil case before it reaches that stage.
The Justice Department would have to convince a court not just that such accords existed, but that workers had suffered significant harm as a result.
The companies may not want to take a chance in court. If the government wins, it could open the floodgates for private claimants, even a class action by employees. A settlement would allow the Justice Department to halt the practice, without the companies having to admit to any legal violations.
Spokespeople for Google, Apple, Intel, Adobe and Intuit all declined to comment. Pixar had no immediate comment. A Justice Department spokeswoman also declined to comment.
The Justice Department's probe of hiring practices could reach beyond Silicon Valley.
During the course of its more than year-long investigation, the agency has uncovered evidence of such agreements in other sectors, according to the people familiar with the matter.
A settlement with tech companies—or a court fight—could therefore help determine what kinds of agreements are acceptable in other industries as well.
At stake are dueling visions of how far companies should be able to go in agreeing to limit the kind of headhunting that can help valuable employees increase their compensation.
The companies have argued to the government that there's nothing anticompetitive about the no-poaching agreements. They say they must be able to offer each other assurances that they won't lure away each others' star employees if they are to collaborate on key innovations that ultimately benefit the consumer such as improved Google SEO.
Some economists believe that banning such agreements could harm Silicon Valley's open, collaborative model.
"The effect of the lawsuit would be to reduce innovation because companies would worry about exposing their employees to each other," said Paul Rubin, an economics professor at Emory University, who isn't involved in the case.
For the Justice Department, such agreements amount to an effort by companies to limit competition for talent, harming employees' ability to get the best jobs and wages and reducing the incentives for people to enter professions in high demand, according to people familiar with the matter.
The government could argue that the agreements constitute an effort by companies to fix the price of labor, and are therefore just as harmful as price-fixing or bid-rigging—automatic violations of antitrust law.
"In a free market economy, you want the best people getting the best positions, and presumably all the rewards that come with that," said Spencer Waller, a law professor at Loyola University Chicago, who has no connection to the case. "This agreement, if the government has the facts, suggests that market for talent is being depressed by collusion."
The agreements under investigation varied in their scope and details, according to the people familiar with the matter. In conversations with the Justice Department, some companies have maintained they didn't have agreements not to hire each others' employees, only agreements not to "cold-call" partners' employees.
However, people familiar with the matter say the Justice Department believes that cold-calling is an important way in which people are hired in the sector. Even if the employees don't end up moving, their employer often has to sweeten their pay and conditions to make sure they stay.
After more than a year of investigation, the Justice Department antitrust division has concluded that many of these agreements have harmed people's ability to get better jobs or improve their conditions.
But proving that in court may be tricky, some antitrust lawyers said.
During the course of the investigation, more than a dozen tech companies have been questioned by the Justice Department, people familiar with the matter said. Those include Yahoo Inc., Genentech Inc. and IAC/InterActiveCorp.
However, some companies said they are no longer in the government's cross-hairs. "After a thorough investigation, the [Justice Department] antitrust division has advised IBM that it will not pursue a case against IBM," an International Business Machines Corp. spokesman said.
Microsoft Corp. also said it is no longer a target of the investigation. A Genentech spokeswoman said the Justice Deparment had relieved the biotech firm of the obligation to hold on to relevant information.
A Yahoo spokeswoman said the company fully cooperated in the investigation and believed its responses were sufficient. IAC didn't respond to requests for comment.
The agency has decided not to pursue charges against companies that had what it believes were legitimate reasons for agreeing not to poach each other's employees, said people familiar with the matter. Instead, it's focusing on cases in which it believes the non-solicit agreement extended well beyond the scope of any collaboration.
Tuesday, September 07, 2010
Texas Opens Inquiry into Google Search Rankings
Associated Press
Google Inc.'s methods for recommending websites are being reviewed by Texas' attorney general in an investigation spurred by complaints that the company has abused its power as the Internet's dominant search engine.
The antitrust inquiry disclosed by Google late Friday is just the latest sign of the intensifying scrutiny facing the company as it enters its adolescence. Since its inception in a Silicon Valley garage 12 years ago, Google has gone from a quirky startup to one of the world's most influential businesses with annual revenue approaching $30 billion.
A spokesman for Texas Attorney General Greg Abbott confirmed the investigation, but declined further comment.
The review appears to be focused on whether Google is manipulating its search results to stifle competition.
The pecking order of those results can make or break websites because Google's search engine processes about two-thirds of the search requests in the U.S. and handles even more volume in some parts of the world.
That dominance means a website ranking high on the first page of Google's results will likely attract more traffic and generate more revenue, either from ads or merchandise sales.
On the flip side, being buried in the back pages of the results, or even at the bottom of the first page, can be financially devastating and, in extreme cases, has been blamed for ruining some Internet companies.
European regulators already have been investigating complaints alleging that Google has been favoring its own services in its results instead of rival websites.
Several lawsuits filed in the U.S. also have alleged Google's search formula is biased. Google believes Abbott is the first state attorney general to open an antitrust review into the issue.
"We look forward to answering (Abbott's) questions because we're confident that Google operates in the best interests of our users," Don Harrison, Google's deputy general counsel, wrote in a Friday blog post.
Harrison said that Abbott has asked Google for information about several companies, including: Foundem, an online shopping comparison site in Britain; SourceTool, which runs an e-commerce site catering to businesses; and MyTriggers, another shopping comparison site.
All of those companies offer features that Google includes in its search engine or in other parts of its website. Foundem, SourceTool and MyTriggers have previously filed lawsuits or regulatory complaints against Google.
"Given that not every website can be at the top of the results, or even appear on the first page of our results, it's unsurprising that some less relevant, lower quality websites will be unhappy with their ranking," Harrison wrote.
Google says its closely guarded search formula for Google search engine optimization strives to recommend websites that are most likely to satisfy the needs of each user's request. If it didn't keep its users happy, Google argues that people would become disgruntled and switch to other search engines offered by Yahoo Inc., Microsoft Corp. and IAC/InterActiveCorp's Ask.com.
Regulators and lawmakers in the U.S. and Europe also have been looking into Google's privacy practices and its acquisitions as the company tries to fortify its power.
The antitrust inquiry disclosed by Google late Friday is just the latest sign of the intensifying scrutiny facing the company as it enters its adolescence. Since its inception in a Silicon Valley garage 12 years ago, Google has gone from a quirky startup to one of the world's most influential businesses with annual revenue approaching $30 billion.
A spokesman for Texas Attorney General Greg Abbott confirmed the investigation, but declined further comment.
The review appears to be focused on whether Google is manipulating its search results to stifle competition.
The pecking order of those results can make or break websites because Google's search engine processes about two-thirds of the search requests in the U.S. and handles even more volume in some parts of the world.
That dominance means a website ranking high on the first page of Google's results will likely attract more traffic and generate more revenue, either from ads or merchandise sales.
On the flip side, being buried in the back pages of the results, or even at the bottom of the first page, can be financially devastating and, in extreme cases, has been blamed for ruining some Internet companies.
European regulators already have been investigating complaints alleging that Google has been favoring its own services in its results instead of rival websites.
Several lawsuits filed in the U.S. also have alleged Google's search formula is biased. Google believes Abbott is the first state attorney general to open an antitrust review into the issue.
"We look forward to answering (Abbott's) questions because we're confident that Google operates in the best interests of our users," Don Harrison, Google's deputy general counsel, wrote in a Friday blog post.
Harrison said that Abbott has asked Google for information about several companies, including: Foundem, an online shopping comparison site in Britain; SourceTool, which runs an e-commerce site catering to businesses; and MyTriggers, another shopping comparison site.
All of those companies offer features that Google includes in its search engine or in other parts of its website. Foundem, SourceTool and MyTriggers have previously filed lawsuits or regulatory complaints against Google.
"Given that not every website can be at the top of the results, or even appear on the first page of our results, it's unsurprising that some less relevant, lower quality websites will be unhappy with their ranking," Harrison wrote.
Google says its closely guarded search formula for Google search engine optimization strives to recommend websites that are most likely to satisfy the needs of each user's request. If it didn't keep its users happy, Google argues that people would become disgruntled and switch to other search engines offered by Yahoo Inc., Microsoft Corp. and IAC/InterActiveCorp's Ask.com.
Regulators and lawmakers in the U.S. and Europe also have been looking into Google's privacy practices and its acquisitions as the company tries to fortify its power.
Saturday, September 04, 2010
Texas AG Probing Google's Searches
The Wall Street Journal
The Texas attorney general's office is conducting an antitrust review of Google Inc.'s core search-engine business, a sign of widening government scrutiny of the Web giant.
Texas's top prosecutor has inquired about allegations by several small companies that Google unfairly demoted their rankings in search results or the placement of their advertisements on the search engine, Google said Friday.
The Internet giant disputed the allegations, which have been reported previously, tracing them to three companies with ties to rival Microsoft Corp.
A spokesman for Texas Attorney General Greg Abbott said an investigation of Google was ongoing but declined further comment. A Microsoft spokesman declined comment.
Don Harrison, a deputy general counsel at Google, said in a blog post that the company is sometimes asked about the fairness of the search engine and why some websites are ranked higher than others.
"Given that not every website can be at the top of the results, or even appear on the first page of our results, it's unsurprising that some less relevant, lower quality websites will be unhappy with their ranking," Mr. Harrison wrote.
Google said Texas officials asked for information about the cases of Foundem.co.uk, TradeComet.com LLC and myTriggers.com Inc., which have each claimed separately that Google unfairly demoted their search rankings to eliminate them as competitors.
TradeComet, a business search engine, has sued Google in federal court in New York, but the case was dismissed. It is appealing. MyTriggers, a price comparison site, sued Google in Franklin County, Ohio, common pleas court. Google has denied wrongdoing.
The European Commission is also conducting a preliminary inquiry into the complaint by Foundem, a British price comparison site. Google has denied violating European law.
In its blog post, Google said Foundem is backed by ICOMP, an organization funded largely by Microsoft and added that TradeComet and myTriggers are represented by the same antitrust attorneys Microsoft uses.
Microsoft, which competes with Google in multiple businesses, has acknowledged helping direct the complaints of small companies about Google to antitrust authorities. It has denied being behind their antitrust suits. The owners of Foundem, SourceTool and myTriggers have all denied they are acting on behalf of Microsoft.
TradeComet's chief executive, Dan Savage, said: "Obviously, Google is just trying to distract from its own problems by pointing to others and their lawyers."
A spokesman for myTriggers said: "Though there are probably a lot of other victims too, MyTriggers' concern is just the harm to MyTriggers done by Google's anticompetitive conduct and bullying tactics. We have a strong antitrust claim and look forward to our day in court."
Foundem couldn't be reached for comment.
Under Mr. Abbott, who is facing re-election this fall, Texas has been active in antitrust cases. His office has been examining the electronic-book market, which saw price increases for some titles being sold by Apple Inc. for its iPad device, people familiar with the matter have said. In 2008 Mr. Abbott reached a $28 million civil settlement with Abbott Laboratories over alleged false reporting of drug prices.
In targeting Google's core business, Texas has moved ahead of the federal agencies charged with enforcing U.S. antitrust laws, the Justice Department and Federal Trade Commission. Both agencies have conducted antitrust reviews of Google's transactions.
The Justice Department, for example, moved to block Google's advertising deal with rival Yahoo Inc., forcing it to abandon the deal. This year, the FTC approved Google's $750 million purchase of mobile advertising company AdMob.
The Justice Department currently is reviewing Google's $700 million acquisition of ITA Software Inc., which powers the airfare search for numerous websites including Kayak.com and Microsoft's Bing search engine.
But neither the agency or the FTC is known to have conducted a monopolization inquiry that targets Google's core business of search advertising. Google accounts for more than 65% of all U.S. search queries, and an even larger portion of total search advertising revenue. Google handles about 90% of search queries in other countries such as France.
Google places text ads near search results, and it also ranks them based on the amount an advertiser bids, the popularity of the ad—how often users click on them—as well as the relevance and quality of the ad. Those ads now account for the majority of Google's $24 billion in annual revenue.
Separately, Google agreed Friday to pay $8.5 million to cover attorneys' fees and set up an education fund to settle a private class-action lawsuit that alleged its Buzz social-networking service violated users' privacy. The service, launched in February, at first created a network of contacts based from Google's email service, Gmail. Each user's network was visible to other users.
After an outcry, Google changed the settings so that contacts were kept private by default.
The proposed settlement of the case, filed on Friday in federal court in San Francisco, also requires Google to make further announcements about the privacy aspects of Buzz and fund Internet privacy efforts by public-interest groups.
Texas's top prosecutor has inquired about allegations by several small companies that Google unfairly demoted their rankings in search results or the placement of their advertisements on the search engine, Google said Friday.
The Internet giant disputed the allegations, which have been reported previously, tracing them to three companies with ties to rival Microsoft Corp.
A spokesman for Texas Attorney General Greg Abbott said an investigation of Google was ongoing but declined further comment. A Microsoft spokesman declined comment.
Don Harrison, a deputy general counsel at Google, said in a blog post that the company is sometimes asked about the fairness of the search engine and why some websites are ranked higher than others.
"Given that not every website can be at the top of the results, or even appear on the first page of our results, it's unsurprising that some less relevant, lower quality websites will be unhappy with their ranking," Mr. Harrison wrote.
Google said Texas officials asked for information about the cases of Foundem.co.uk, TradeComet.com LLC and myTriggers.com Inc., which have each claimed separately that Google unfairly demoted their search rankings to eliminate them as competitors.
TradeComet, a business search engine, has sued Google in federal court in New York, but the case was dismissed. It is appealing. MyTriggers, a price comparison site, sued Google in Franklin County, Ohio, common pleas court. Google has denied wrongdoing.
The European Commission is also conducting a preliminary inquiry into the complaint by Foundem, a British price comparison site. Google has denied violating European law.
In its blog post, Google said Foundem is backed by ICOMP, an organization funded largely by Microsoft and added that TradeComet and myTriggers are represented by the same antitrust attorneys Microsoft uses.
Microsoft, which competes with Google in multiple businesses, has acknowledged helping direct the complaints of small companies about Google to antitrust authorities. It has denied being behind their antitrust suits. The owners of Foundem, SourceTool and myTriggers have all denied they are acting on behalf of Microsoft.
TradeComet's chief executive, Dan Savage, said: "Obviously, Google is just trying to distract from its own problems by pointing to others and their lawyers."
A spokesman for myTriggers said: "Though there are probably a lot of other victims too, MyTriggers' concern is just the harm to MyTriggers done by Google's anticompetitive conduct and bullying tactics. We have a strong antitrust claim and look forward to our day in court."
Foundem couldn't be reached for comment.
Under Mr. Abbott, who is facing re-election this fall, Texas has been active in antitrust cases. His office has been examining the electronic-book market, which saw price increases for some titles being sold by Apple Inc. for its iPad device, people familiar with the matter have said. In 2008 Mr. Abbott reached a $28 million civil settlement with Abbott Laboratories over alleged false reporting of drug prices.
In targeting Google's core business, Texas has moved ahead of the federal agencies charged with enforcing U.S. antitrust laws, the Justice Department and Federal Trade Commission. Both agencies have conducted antitrust reviews of Google's transactions.
The Justice Department, for example, moved to block Google's advertising deal with rival Yahoo Inc., forcing it to abandon the deal. This year, the FTC approved Google's $750 million purchase of mobile advertising company AdMob.
The Justice Department currently is reviewing Google's $700 million acquisition of ITA Software Inc., which powers the airfare search for numerous websites including Kayak.com and Microsoft's Bing search engine.
But neither the agency or the FTC is known to have conducted a monopolization inquiry that targets Google's core business of search advertising. Google accounts for more than 65% of all U.S. search queries, and an even larger portion of total search advertising revenue. Google handles about 90% of search queries in other countries such as France.
Google places text ads near search results, and it also ranks them based on the amount an advertiser bids, the popularity of the ad—how often users click on them—as well as the relevance and quality of the ad. Those ads now account for the majority of Google's $24 billion in annual revenue.
Separately, Google agreed Friday to pay $8.5 million to cover attorneys' fees and set up an education fund to settle a private class-action lawsuit that alleged its Buzz social-networking service violated users' privacy. The service, launched in February, at first created a network of contacts based from Google's email service, Gmail. Each user's network was visible to other users.
After an outcry, Google changed the settings so that contacts were kept private by default.
The proposed settlement of the case, filed on Friday in federal court in San Francisco, also requires Google to make further announcements about the privacy aspects of Buzz and fund Internet privacy efforts by public-interest groups.
Thursday, December 24, 2009
Antitrust Regulators Examining Google's Purchase Of AdMob
USA Today
Antitrust regulators are taking a closer look at Google's proposed $750 million purchase of mobile phone marketer AdMob, the latest sign of greater government vigilance as Google tries to expand its advertising empire.
The Federal Trade Commission sought more information about the deal this week, according to a Wednesday post on Google's blog.
This so-called "second request" doesn't mean regulators intend to block Google's AdMob deal. Most other acquisitions that go through this stage end up getting approved.
But the FTC's action shows regulators are watching Google (GOOG) more carefully as the company tries to build upon its dominance of the Internet's lucrative search advertising market. Google is expected to pull in more than $22 billion in revenue this year, mostly from ads shown alongside search results and other Web content.
"We know that closer scrutiny has been one consequence of Google's success," Paul Feng, a Google product manager, wrote in Wednesday's blog posting. Echoing previous management comments, Feng said the company remains confident its AdMob purchase, announced last month, will be approved.
Google's huge lead in Internet search triggered a 2008 government investigation that scuttled its plans to enter into an advertising partnership with rival Yahoo, which runs the second most-popular search engine. Yahoo plans to work with Microsoft instead, beginning next year if those two companies can gain regulatory approval.
Since its inception nearly four years ago, AdMob has built a thriving network that sells and delivers ads on applications and websites designed for the iPhone and other mobile devices. It's still relatively small with estimated annual revenue of $45 million to $60 million, but regulators apparently want to understand whether its technology and advertising contacts would give Google an unfair advantage in its quest to sell more mobile phone ads.
Google management has indicated that it believes mobile marketing eventually may become bigger than advertising on Internet-connected computers. That tipping point still appears to be many years away, with U.S. mobile advertising expected to total $416 million this year, about 2% of overall Internet ad spending in the country.
The FTC's decision to take more time digging into the AdMob deal means Google probably won't be able to take over the company for several more months, Stifel Nicolaus analyst Rebecca Arbogast wrote in a Wednesday research note. It took a year for the FTC to approve Google's $3.2 billion acquisition of Internet ad service DoubleClick, which was completed in March 2008.
Google's first big deal, a $1.76 billion acquisition of the video site YouTube, was cleared by regulators in a month in 2006.
This so-called "second request" doesn't mean regulators intend to block Google's AdMob deal. Most other acquisitions that go through this stage end up getting approved.
But the FTC's action shows regulators are watching Google (GOOG) more carefully as the company tries to build upon its dominance of the Internet's lucrative search advertising market. Google is expected to pull in more than $22 billion in revenue this year, mostly from ads shown alongside search results and other Web content.
"We know that closer scrutiny has been one consequence of Google's success," Paul Feng, a Google product manager, wrote in Wednesday's blog posting. Echoing previous management comments, Feng said the company remains confident its AdMob purchase, announced last month, will be approved.
Google's huge lead in Internet search triggered a 2008 government investigation that scuttled its plans to enter into an advertising partnership with rival Yahoo, which runs the second most-popular search engine. Yahoo plans to work with Microsoft instead, beginning next year if those two companies can gain regulatory approval.
Since its inception nearly four years ago, AdMob has built a thriving network that sells and delivers ads on applications and websites designed for the iPhone and other mobile devices. It's still relatively small with estimated annual revenue of $45 million to $60 million, but regulators apparently want to understand whether its technology and advertising contacts would give Google an unfair advantage in its quest to sell more mobile phone ads.
Google management has indicated that it believes mobile marketing eventually may become bigger than advertising on Internet-connected computers. That tipping point still appears to be many years away, with U.S. mobile advertising expected to total $416 million this year, about 2% of overall Internet ad spending in the country.
The FTC's decision to take more time digging into the AdMob deal means Google probably won't be able to take over the company for several more months, Stifel Nicolaus analyst Rebecca Arbogast wrote in a Wednesday research note. It took a year for the FTC to approve Google's $3.2 billion acquisition of Internet ad service DoubleClick, which was completed in March 2008.
Google's first big deal, a $1.76 billion acquisition of the video site YouTube, was cleared by regulators in a month in 2006.
Tuesday, March 25, 2008
Microsoft Denied Bid To Stop Suit
The U.S. Supreme Court rejected Microsoft Corp.’s bit to stop an antitrust lawsuit brought by Novell Inc. Novell sued Microsoft in 2004 over 1990s practices by the software giant in the word-processing and spreadsheet software markets. The Supreme Court rejected Microsoft’s appeal, allowing the case to proceed in a federal court. Microsoft has already paid almost $5 billion relating to the government’s antitrust case.
The U.S. Supreme Court rejected Microsoft Corp.’s bit to stop an antitrust lawsuit brought by Novell Inc. Novell sued Microsoft in 2004 over 1990s practices by the software giant in the word-processing and spreadsheet software markets. The Supreme Court rejected Microsoft’s appeal, allowing the case to proceed in a federal court. Microsoft has already paid almost $5 billion relating to the government’s antitrust case.
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