Anti-trust case building up against Google in US

Washington: The US Federal Trade Commission (FTC) is considering a broad anti-trust investigation into Google's dominance of the internet-search industry, two people familiar with the matter said. Before proceeding with any probe, the FTC is awaiting a decision by the Justice Department on whether it will challenge Google's planned acquisition of ITA Software as a threat to competition in the travel-information search business.

An FTC investigation of Google "could be on par" with the scope of the Justice Department's probe of Microsoft a decade ago, said Keith Hylton, an anti-trust law professor at Boston University School of Law. Google "could fight the FTC, but that's going to cost a lot of money and time".

Decision expected soon

The FTC and Justice Department share responsibility for oversight of anti-trust enforcement, and the outcome of the ITA deal may determine whether the two agencies will vie for control of a broader probe of Google, the people said. The two agencies sometimes negotiate which will handle major anti-trust investigations, with the decision turning on their respective expertise.

The Justice Department may soon announce its decision on Google's purchase of ITA, said the people familiar with the matter.

FTC commissioner Thomas Rosch said in an interview he supported a probe of the dominant players in the internet-search industry, without specifying which companies. Rosch, one of two Republicans on the five-member commission, is the only commissioner to say publicly that such an investigation is in order.

The people familiar with the matter said any investigation of the search industry should concentrate on Google. If consumers don't like what the company is doing, they can switch to another search engine, said Adam Kovacevich, a Google spokesman. "Since competition is one click away on the internet, we work hard to put our users' interests first and give them the best, most relevant answers to their queries," he said in an e-mail. "We built Google for users, not websites."

Cecelia Prewett, a spokeswoman at the FTC, and Gina Talamona, a Justice Department spokeswoman, declined to comment.

Growing pressure

Officials in Texas and the European Commission have started investigations into Google's search dominance, while Ohio attorney-general Mike DeWine is considering such a probe. The EU probe is examining whether Google discriminated against other services in search results and stopped websites from accepting rival ads. A complaint from Microsoft last month may expand the investigation to on-line video and mobile phones.

The state of Wisconsin is weighing an examination of Google's bid to buy ITA, which provides data for airline ticket fares to online travel sites, according to a person familiar with the matter.

Lawmakers including senator Mike Lee, an Utah Republican, and senator Richard Blumenthal, a Connecticut Democrat, have urged the Senate Judiciary subcommittee on anti-trust to hold a hearing on Google's dominance of internet businesses. Herb Kohl, the Wisconsin Democrat who heads the panel, has said he's examining Google.

"An investigation is long overdue," said Gary Reback, an anti-trust lawyer with Carr and Ferrell, who represents companies that have complained about Google to regulators here and in Europe. "Every day there are companies who are being hurt by Google's anticompetitive behaviour and we still have arm-wrestling going on in Washington," he said in an interview.

It isn't known whether the Justice Department or the FTC would handle such an investigation because both agencies could claim experience in reviewing Google's businesses, said Robert Lande, a law professor at the University of Baltimore.

The FTC gained knowledge of Google's inner workings during its review of the company's $750 million (Dh2.75 billion) purchase of AdMob, a mobile ad service. The agency approved that acquisition last year.

In 2007, the agency approved Google's acquisition of DoubleClick, an on-line advertising company.

The FTC has been bolstering its expertise in technology and the internet. Chairman Jonathan Leibowitz appointed Edward Felten, a Princeton professor known for cracking the music industry's digital-copyright protection code, as the agency's chief technologist in November.

Columbia Law School professor Timothy Wu, the author of Master Switch, a book about the consolidation of information industries, was appointed senior adviser in February to study consumer protection and competition issues that affect the internet and mobile markets. Wu coined the term ‘net neutrality', which advocates no restrictions on content, sites, platforms or kinds of equipment.

It's possible the FTC, which handles consumer-protection issues, could begin a probe examining allegations of deception by Google, expanding it into a broader anti-trust investigation, Lande said. On March 30, Google agreed to settle FTC claims that it used deceptive tactics and violated its own privacy policies when it introduced the Buzz social-networking service last year.