Feds Investigate Google's Possible Search Abuses

by , Jun 24, 2011, 10:37 AM
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Google's about to get its Microsoft moment -- and that's not a good thing. According to reports, federal regulators about poised to launch a broad, formal investigation into whether the company has abused its dominance in search advertising.

"The civil probe, which has the potential to reshape how companies compete on the Internet, is the most serious legal threat yet to the 12-year-old company, though it wouldn't necessarily lead to any federal allegations of wrongdoing against Google," reports The Wall Street Journal, citing sources. To date, Google has already faced several antitrust probes, but the government has so far limited its investigations to reviews of the company's mergers and acquisitions.

By contrast, this latest would-be inquiry "will examine fundamental issues relating to Google's core search-advertising business, its biggest money maker," notes WSJ. "This is the main act," Ted Henneberry, a former trial lawyer at the Justice Department and partner at Orrick Herrington and Sutcliffe, tells The New York Times.Not surprisingly, "FairSearch.org, which includes Expedia, Microsoft and other online travel companies whose goal was to keep ITA from falling into Google's grasp, cheered the idea that the FTC is launching a broad antitrust investigation into Google's business practices," reports eWeek.

Policy watchers, meanwhile, tell WSJ that the probe could be "as much of a watershed event for antitrust policy as the Justice Department's landmark lawsuit against Microsoft Corp. in the 1990s." That said, the chances of Google being found guilty of antitrust behavior, as Microsoft was, are far smaller, according to Professor Joshua Wright of George Mason Law School. As the Guardian reports: "Wright said for the U.S. to bring a successful case against Google, it would have to prove the company was harming consumers."

"Antitrust law focuses on not whether a company has achieved a monopoly, but whether it abuses that monopoly to create monopolies in other markets," PCMag points out. "Defining what or what is not a market can be the linchpin of the investigation. The FTC's investigation, if it occurs, would be the first step in a process that could end with a formal lawsuit."

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