Justice Department meets with firms seeking Google antitrust probe
By Craig Timberg,
Companies are pleading with the Justice Department to investigate Google as they lose faith that the Federal Trade Commission will act forcefully on their complaints that the company illegally skews its search results, said people familiar with the matter.
Senior officials from the Justice Department, which shares with the FTC the responsibility of policing allegations of monopolistic behavior, have met with at least two companies in recent weeks, said these people, who spoke on the condition of anonymity to describe private conversations.
The meetings come amid reports that the FTC may resolve its nearly two-year-old investigation of Google without dealing directly with complaints that the company uses its power over the search market to gain an edge over rivals.
Those familiar with the meetings with Justice Department officials say that they were of a preliminary nature and that it was not clear whether they would lead to any action. The department considered launching an antitrust investigation before the FTC claimed the case last year.
The Justice Department took over the high-profile antitrust investigation of Microsoft in the 1990s after the FTC, which is overseen by a bipartisan, five-member commission, deadlocked over complaints from Microsoft’s rivals that it was using its dominance of the market for operating systems to seek advantage in other businesses. The landmark showdown between Microsoft and the Justice Department is often cited as a potential analogy by Google’s critics.The FTC, the Justice Department and Google declined to comment.
Congress has taken a keen interest in the Google antitrust case and may welcome intervention by the Justice Department should the FTC not act on allegations of search bias.
“In past investigations, the Department of Justice has been more aggressive in enforcing the antitrust laws to protect competition in cases when the Federal Trade Commission would not act,” said Sen. Richard Blumenthal (D-Conn.), who sits on the Judiciary Committee and was Connecticut’s attorney general when the Justice Department sued Microsoft with the backing of many states. “The same potential opportunity exists here.”
He said he would not comment on whether the department should step in until the FTC makes a final determination in the Google case, which many expect this month. Blumenthal added, “I’m concerned because of the serious and credible claims about anti-competitive activity that certainly warrant investigation.”
The FTC, led by Chairman Jon Leibowitz, is weeks into intense settlement negotiations with Google. While the agency is demanding remedies to some allegations of monopolistic behavior, such as the alleged misuse of patents to hurt rivals, it is not clear that it has the votes on the commission to act on the most serious allegations of search bias. Google has offered some concessions but is resisting a binding decree that might limit its business practices, according to those familiar with the talks.
Rival companies say Google favors advertisers and its own specialized results when users search for travel services or products; those with other services say their links get demoted. Google recently changed all of its shopping queries to show results paid for by advertisers, prompting Microsoft, which operates the Bing search engine, to launch a high-profile ad campaign complaining that consumers were being “Scroogled” by Google.
The companies that have complained about Google — which were not identified by the people familiar with the meetings — have met with Scott A. Scheele, chief of the Justice Department antitrust division’s telecommunications and media enforcement section. If the department decided to pursue a case against Google, it would not happen until after the FTC makes a final decision on its case, and a different section at the department might take the lead.
Such a case probably would take months if not years to develop. Though the FTC has extensive documentation from its investigation, the antitrust division at the Justice Department has an interim head, complicating such a major initiative. It also could prove complex to pursue allegations of search bias if the FTC decides not to act on them.
Law professor Geoffrey A. Manne, who has been critical of the antitrust claims against Google, said it would be natural for companies frustrated by the FTC to go “forum shopping” in favor of a different potential outcome. Reports of the meetings with the Justice Department could increase pressure on the FTC to act, but Manne said that would be unlikely to change the outcome of the case, which has proceeded amid an unusual level of publicity because it pits some of the world’s most prominent technology companies against each other.
“I can’t image any agency having more incentives to bring that case if it could,” said Manne, executive director of the International Center for Law and Economics, which receives funding from Google.
The Justice Department has investigated Google several times on antitrust issues. Last year, it approved Google’s takeover of a provider of travel search software after getting assurances that the software would be made available to other travel companies through licensing deals. In 2008, the department blocked a proposed alliance between Google and Yahoo out of concern that it would lead to a monopoly within the search market.
Several state attorneys general and the European Union also are investigating Google on allegations of search bias.
Also Wednesday, the FTC filed a court brief reiterating its opposition to allowing companies to use what are called “standards-essential patents” to block other companies from bringing products to market. Google, through its Motorola Mobility unit, sued Apple to keep it from selling iPhones and iPads, arguing that they infringed on patented technology.
Many critics have said the move by Google violated the spirit of a patent process intended to encourage companies to share standards in ways that help consumers easily use products from a variety of manufacturers. Google’s legal move against Apple is among the issues the FTC is reviewing in its antitrust investigation and probably will lead to a concession in which Google promises to not use standards-essential patents in this way, say those familiar with talks between the FTC and the company.