FTC Edges Closer to Antitrust Case Against Google

The U.S. Federal Trade Commission has moved closer towards charging Google of violating antitrust laws, according to an exclusive report from Reuters. The news organization reported that four of the five commissioners who comprise the FTC believe that Google has used its market dominance in search to harm its competitors, though the fifth member remains skeptical.

Companies like Yelp and Nextag have long accused Google of rigging its results to favor Google's own products and services over those rivals. This isn't necessarily illegal in and of itself, but if Google is determined to have monopoly power in the search engine market in the U.S., the company could be subject to antitrust regulations that prohibit companies with monopoly power in one market from leveraging that power to gain share in other markets.

To date, no regulatory body or a U.S. court has declared Google to have monopoly power, and it remains to be seen if that will happen. A look at September's market share for U.S. search business, however, does show that Google is, at the very least, dominant.

Search Engine Market Share

Chart by The Mac Observer from NetMarketshare Data

The data represented in the chart above could be why the FTC has been examining Google for the last year. For instance, in 2011 Yelp complained that Google not only listed results for its own Places service above Yelp’s, but that it even uses information from Yelp while doing so. The screenshot below is an example of just such a complaint.

2011 Search

Google Search Results from 2011
(Click the image for a larger version)

Google has consistently claimed that it was doing nothing wrong or illegal. Google Chairman Eric Schmidt told a congressional hearing in 2011, "May I simply say that I can assure you we've not cooked anything."

Be that as it may, the company has since changed the way it displays results for searches such as the one above. In the screenshot below of the same search conducted on Friday, you get very different results:

2012 Search

The Same Search on Friday, October 12th, 2012

Note that Yelp is now the second result, while Google's own products—the company currently owns Zagat—have been moved to a sidebar placement. Note, too, that Yelp information is not included in the Google product placement.

One would think that these kinds of changes would satisfy antitrust concerns—they certainly appear to address Yelp's 2011 complaints—but we aren't privy to the investigation that the FTC has been undertaking for the last year. It's certainly possible that other Google practices unrelated to Yelp's complaints are the focus of the four commissioners' concerns.

Reuters also noted that a "long list of companies has been complaining to the FTC, arguing that the agency should crack down on Google."

The FTC should come to a decision on whether to proceed with its case by November or December of 2012. If it does, the it's possible that Google and the FTC could come to a settlement. If not, the two could find themselves in the kind of court fight we last saw between the U.S. Department of Justice and Microsoft a decade ago.