Google once was seen as such a ripe target for investigation that the nation’s antitrust enforcers battled over the right to claim it as their own, as a potential high-tech pelt to be hung on the wall alongside Microsoft and AT&T.
Yet after nearly two years of a high-profile probe, Google recently reached a tentative settlement deal that many observers called a slap on the wrist. And the agency that claimed the case in 2011, the Federal Trade Commission, began facing such withering criticism that the agreement was showing signs of fraying Tuesday night, according to people following the case closely.
Some industry officials and longtime FTC observers say the agency is in danger of weakening its credibility as an antitrust enforcer and as the nation’s most ardent overseer of the multibillion-dollar technology industry whose products are an increasingly pervasive — some say intrusive — part of Americans’ lives.
“The agency raised huge expectations about this case. You get in trouble in the policy world when you set expectations in the stratosphere and you deliver something less,” William Kovacic, a former FTC chairman who is now a George Washington University law professor. “The commission has painted itself into a bit of a corner.”
Recent news reports detailing the terms of the tentative agreement unleashed a torrent of opposition from companies that had complained, state attorneys general who felt cut out of negotiations, interested lawmakers and consumer advocates. Many have long said that Google was manipulating search results to hobble competitors and gain advantage for its own offerings in shopping, travel services and other lucrative businesses — and in the process, limiting consumer choice.
The announcement of the agreement, once expected this week, now has been pushed back to at least January, according to those following the case, bending a timeline publicly set by FTC Chairman Jon Leibowitz and raising the possibility that the terms of the deal may change. The agency is now keenly watching what concessions European antitrust regulators manage to extract from Google in a parallel investigation.
The E.U.’s top antitrust official, Joaquín Almunia, met with the company’s executive chairman, Eric Schmidt, on Tuesday and issued a statement reiterating his concerns, saying Google should “come forward with a detailed commitment” next month. Among the issues listed by Almunia was alleged manipulation of search results, an issue once at the heart of the FTC’s investigation but one that was not addressed in the tentative deal Google reached with the agency.
Interagency jealousies
The FTC long has shared antitrust enforcement with the Justice Department under an uneasy arrangement that has featured fierce backroom negotiations and interagency jealousies. When the FTC’s commissioners deadlocked over pursuing the Microsoft case in 1993, the Justice Department eagerly took over what proved to be a historic case that reshaped the tech industry, leaving some at the FTC embittered by their agency’s inability to act.
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