Google, FTC said to be near deal to end probe

December 17, 2012

Google and the Federal Trade Commission are on the verge of a deal that would end a nearly two-year-old investigation into allegations of monopolistic behavior by implementing concessions that fall far short of what the company’s rivals have sought, said people familiar with the negotiations.

Under the deal, which still ­requires the approval of the five-member commission, Google would agree to new limits on its ability to use snippets of content from other Web sites and would agree to make it easier for marketers to transfer their online ads to other services. But there would no action by the FTC on persistent claims that Google uses its power over the search market to hurt rival companies and give advantage to its own online services.

The final phase of talks, which have been underway for weeks, have focused on whether Google would accept a binding agreement, called a consent decree, limiting its future business practices, said people familiar with the emerging deal who spoke on the condition of anonymity because it has not yet been made public.

Google has staunchly resisted accepting such an agreement, lobbying instead to make concessions that would be portrayed as “voluntary.” The company appears close to successfully avoiding a consent decree, in a development that would draw a furious reaction from the coalition of companies that have sought strong federal action reminiscent of the Justice Department’s legal challenge of Microsoft in the 1990s.

FTC Chairman Jon Leibowitz declined to comment Sunday, as did Google, which reiterated its long-standing public statement: “We continue to work cooperatively with the Federal Trade Commission and are happy to answer any questions they may have.”

The impending end of the FTC case will shift attention to the European Union, which has its own antitrust investigation of Google, and to the several states whose attorneys general have launched similar probes.

Companies frustrated with the FTC also have begun lobbying the Justice Department, which shares responsibility for antitrust enforcementand could eventually take up the issue. People familiar with the situation say Justice would be unlikely to open its own investigation of Google in the immediate aftermath of FTC action, even if the most serious allegations go unaddressed.

Google has nearly 70 percent of the nation’s lucrative search market and also makes Android, the most popular operating system for smartphones, which has Google search as a default, making the company well positioned to extend its position in that market.

The allegations against Google have focused on how the company generates and displays search results for consumer products, travel services and restaurants. The company has increasingly given over more space on its Web page to advertisements. The decision to make all shopping searches produce paid results prompted Mi­cro­soft, operator of the rival Bing search engine, to launch a high-profile campaign accusing Google of “Scroogling” consumers.

Microsoft, online travel companies and shopping Web sites pressed the FTC to take forceful action against Google. Several companies said that alterations to Google’s search functions had dramatically undercut their businesses while making it harder for customers to find the best deals online.

Those pushing for aggressive antitrust action had an easier time proving harm to competitors than to consumers, a key factor in determining violations.

A separate FTC investigation on how Google has sought to use patents to block rival companies from bringing products to market also is near resolution.

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Craig Timberg is a national technology reporter for The Post.
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