Inside Google

Federal Trade Commission Chairman Jon Leibowitz has given Google what Bloomberg News Service describes as an ultimatum to settle the agency’s antitrust investigation in the next few days or face a lawsuit.

Citing unidentified sources, Bloomberg reporter Sara Forden wrote:

“Google has been in discussions with the agency for about two weeks and hasn’t put any remedy proposals on the table, said the people, who declined to be identified because the negotiations are private.”

FTC staff have been investigating whether the Google has been abusing its dominance of the Internet for more than a year.  The staff has reportedly recommended issuing a complaint focused on Google’s search practices and also for misusing its patents to block rivals smartphones.

The FTC has told Google it won’t accept a resolution short of a consent decree, Bloomberg’s Forden wrote,  and is prepared to take action in the next week or two.

Google is continuing its usual happy-face spin. “We continue to work cooperatively with the Federal Trade Commission and are happy to answer any questions they may have,” Google Spokesman Adam Kovacevich told Bloomberg.

At first blush the idea that the FTC is holding out for a consent decree may sound reassuring.  For what it’s worth though, I’m a little concerned that a settlement  might not do enough.

Chairman Leibowitz is expected to step down from the agency soon.  There is speculation that in a nod toward his legacy, he might be willing to agree to a less than adequate settlement, just to be able to say the FTC got the Internet giant on his watch.

Franky, there is a similar concern among privacy advocates that there could be a willingness to accept a weak Do Not Track standard for the same reason.

If the Commission files a lawsuit, the FTC could proceed in its own administrative court or in federal court.  No decision has been made about the venue.

Meanwhile there was a development over the summer that might give Google pause.  The Commission has changed its policy and can now seek “disgorgement” — forcing a firm to surrounded profits as an antitrust penalty.  If the FTC goes that route, it might really concentrate the minds of the geeks in Mountain View.

And don’t forget the other side of the Atlantic.  The EU is pressing Google to resolve its antitrust concerns or face a formal complaint.  That, too, could come in a matter of weeks.