FTC Probe Focused on Google Practices for Search & Android

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The Federal Trade Commission told reporters Wednesday that a probe the commission launched against Google in June is focusing its investigation into the company’s search practices and the way that it ties Android devices to its own services.

Citing unnamed sources, The Wall Street Journal reported that the FTC has been questioning Google about whether or not the company prevents its hardware licensees from using services from other companies that compete with Google’s own services.

This is a curious question in that Google makes Android available for free for the sole purpose of moving its own products and the company’s lucrative search business into the mobile space in order to avoid being locked out in the future by other companies, such as Apple, Microsoft, or even RIM.

The “free” part of Android is paid for by the presence of those Google services, and Google has worked hard to make sure that its OEMs don’t sub out Google search for, say, Microsoft’s Bing search engine.

Be that as it may, as The Mac Observer reported in June, FTC attorneys have also been looking into the company’s search engine practices. Specifically, they have been interested in whether or not Google is granting its own services preferential treatment at the expense of competing services.

For instance, Yelp has complained that Google not only lists 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.

Google Search Screenshot

Screenshot of Google search results
(Click the image to see a larger, more readable version)

For its part, Google said that it was cooperating with FTC investigators. In a statement, the company said, “We understand that with success comes scrutiny. We’re happy to answer any questions they have about our business.”

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And cue Google whining like a spoiled child in 5, 4, 3, 2, 1. . . .

Seriously. I can’t imagine what, other than the most epic hubris imaginable, could make them think other companies wouldn’t defend themselves. I just have no respect for this company and it irks me because I have to use Bing. Bastids. wink


The two big concerns for Google here are:  (1)  If the FTC determines that Google restrains, through its license for Android, the ability of other services (search, email, etc.) to compete to get on Android devices, it may file suit void those aspects of Android’s license, and (2) If the FTC finds that Google has been biasing its search service to favor its listings and its other services over competitors’ listing and/or services, the FTC may also file suit to prevent and regulate how Google ranks the results in its search services.  In addition, there is the issue of scraping reviews and other info off competing websites and using that scrapped info to compete against those very websites. 

The focus of the FTC’s investigation is dangerous, because if the FTC breaks the link between Google’s service and orthodox Android devices, that will impair, if not destroy the revenue stream from Android so that it could no longer make sense for Google to do Android.  And if Google is made to operate its search under regulatory orders to prevent anti-competitive conduct, Google’s revenues from search, while they almost certainly will still be luxurious, will be also be impaired. 

However, the FTC’s investigation is in its earliest stages, so it may well be that the FTC will not find grounds for any type of enforcement action.  But this, supra, along with the legion of infringement lawsuit against Google for Android and/or against Google’s Android OEMS is beginning to show me the pattern of a company, Google, that has not merely failed to not do evil but has manifest some of the worst anti-competitive and otherwise abusive and unfair conduct of any company in high tech in the past 35 years.

And perhaps, in the delusion that it actually doesn’t do evil, Google always finds that its troubles are someone else’s fault or are the result of some evil conspiracy, for without even waiting to see the results of the FTC’s investigation—or perhaps Google already knows it will be found to have done wrong—Google has already declared itself the victim of an evil conspiracy that seeks to block its competitive success:

“Google denies that it engages in unfair or illegal competitive practices. The company has suggested the growing number of antitrust investigations have been spurred by rivals unsettled by its aggressive push into new business sectors.”

From the WSJ story that Bryan cites in his report, supra.  Bruce Sewell, Apple’s General Counsel, must have gotten a kick out that quote, as he though of how quickly Google sicced the antitrust regulator on Apple’s Rockstar Bidco consortium that won the bidding for the Nortel patents. 

One thing that I like and that I think other people like about Steve Jobs is that, while he will occasionally bullshit others, he doesn’t bullshit himself, and when he screws up or Apple screws up, as it or he has on occasion, neither he or Apple blame their troubles on others.  It is time for Sergy and Larry to grow up, learn something about the golden rule of reciprocity, and perhaps have someone from Stanford Law School or from Berkeley’s Boalt Hall School of Law come to Mountain View to teach them the basics of intellectual property and of what a firm’s obligations are under the U.S. regime of IP law.

It is time for less whining and more not doing evil.

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