Inside Google

Signs that Google will soon face strong antitrust action on both sides of the Atlantic are increasing with a report Thursday from Bloomberg News Service that the the Federal Trade Commission staff has recommended that the Internet giant be sued for unfairly blocking competitors’ access to smartphone-technology patents.

Bloomberg’s Sara Forden reported that a majority of the agency’s commissioners are inclined to sue.  Earlier it was reported that the FTC is considering suing Google for favoring its own services in search results.

Chairman Jon Leibowitz has said the Commission will decide by the end of the year and some have speculated a decision could come shortly after the election.

Two years ago Consumer Watchdog called for a broad antitrust action against Google seeking remedial action that could include breaking the Internet giant into separate companies.

“Such action could include breaking Google Inc. into multiple separate companies or regulating it as a public utility,” I wrote at the time. “Google exerts monopoly power over Internet searches, controlling 70 percent of the U.S. market.  For most Americans – indeed, for most people in the world – Google is the gateway to the Internet. How it tweaks its proprietary search algorithms can ensure a business’s success or doom it to failure.”

Earlier in the week the European Consumer Organization (BEUC) wrote Joaguin Almunia, vice president of the European Commission, who has been leading an antitrust probe of Google’s behavior.  He has said that he would prefer to settle the Commission’s concerns without filing a formal case.  One possible settlement that has been reported to be on the table is to require Google to label its own services as getting favorable treatment in search results.

BEUC said that would not be adequate. “Simply requiring Google to label its own vertical search services would not prevent the company from manipulating the search results and discriminating against competing services,” wrote Mononique Goyens, BEUC’s executive director.

A 2010 Consumer Watchdog study, Traffic Report: How Google is Squeezing out Competitors and Muscling Into New Markets, demonstrated how with the launch of Universal Search Google favored its own properties and services in search results to the detriment of its competitors. One stark example was the dramatic drop-off in traffic that occurred on Mapquest’s site after Google placed its Google Maps at the top of Universal Search.

Goyens letter continued:”

“We expect the European Commission to take a strong stance and protect consumers by exercising its powers under the treaties to sanction dominate companies who abuse the dominance to the detriment of consumer welfare. Net and search neutrality are the guiding principles that must be preserved in order to protect the open Internet.“

I couldn’t agree more and there are increasing signs that the FTC on this side of the Atlantic is coming to that point of view as well.