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FTC Closes Google Investigation; Google Required to Modify Business Practices #FTCantitrust

FTC.jpeg In June 2011, the Federal Trade Commission announced that it would begin examining Google for anti-competitive practices. Nearly two years later, the FTC announced what it found.
 

First Do No Harm

At the heart of the investigation is the claim that Google has been using its commanding position in the Web-search market to hurt its competitors and leverage its travel services, restaurant reviews and other products.

Before Christmas, a settlement between the FTC and Google was nearing completion, though a vote and formal announcement by the commission was delayed after others expressed concern about the parameters of the deal.

Allegations of Patent Abuse, Search Bias

Today, during a press conference, FTC Chairman Jon Leibowitz announced that their findings after a thorough examination, which included more than 9 million documents provided by Google.

Leibowitz started the briefing by saying "we stopped [Google's patent] abuse."

The move came after a four to one decision, in which the FTC found that Google must stop unfair conduct and license Motorola patents on fair and reasonable terms. As a result, Google is required to abandon claims for injunctive relief on any of its standard-essential patents.

"To avoid this problem, technology companies involved in setting a standard commit to license standard-essential patents on “fair, reasonable and non-discriminatory” terms – known as FRAND terms."

Liebowitz says FTC antitrust action today relieves companies of the burden of hoarding patents purely for defensive purposes.

In regards to the alleged claim that Google unfairly manipulated its search results, the investigation has been closed after the FTC found that the evidence did not represent misuse. According to Liebowitz, Google's prominent display of its own content in search was undertaken with legal justification.

However, Google will have to make some changes, specifically, they will have remove restrictions hampering advertisers’ management of their ad campaigns across competing ad platforms. Such restrictions may have made it more difficult for advertisers to coordinate online advertising campaigns across multiple platforms.

Overall, the FTC after considerable examination said that instead of finding that Google had manipulated its search algorithms to harm vertical websites and unfairly promote its own competing vertical properties, they concluded

that the introduction of Universal Search, as well as additional changes made to Google’s search algorithms — even those that may have had the effect of harming individual competitors — could be plausibly justified as innovations that improved Google’s product and the experience of its users."

What does this mean?

For some it means that Google is living up to its "Don't be evil" mantra. For others, they're getting away with a slap on the wrist and none of the changes required will dissuade other companies from engaging in search bias. 

When asked how the FTC will continue to monitor Google's behaviors from here on out, it was not terribly clear what type of monitoring will occur or what types of behaviors they'll be looking for. Rather, Leibowitz seemed to implied that Google was operating on a strict honor code, adding that "You don't want to get in trouble again with an agency that knows your company very well."

Will this end speculation that Google is manipulating search results? Probably not. Will Google be moved to improve its business practices? It's in their best interest to do so, for the next time the FTC is asked to investigate them, the result may not be as favorable.

 
 
 
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