California Reps Caution FTC in Probe of Google

by Dan Holden | November 20, 2012

ftc

California state representatives Anna Eshoo and Zoe Lofgren, both Democrats, today sent a cautionary letter to Federal Trade Commission chairman Jon Leibowitz, saying they believe the agency stands to overreach its authority if it continues its current direction in an ongoing antitrust probe of Google.

The representatives are particularly concerned that the agency appears to be bent on expanding its Section 5 powers, which deal with unfair or deceptive practices, to include antitrust matters.

“Expanding the FTC’s Section 5 powers to include antitrust matters could lead to overbroad authority that amplifies uncertainty and stifles growth,” said the letter. “These effects may be most acutely felt among online services, a crucial engine of job creation, where technological advancement and small business innovation are rapid. If the FTC indeed intends to litigate under this interpretation of Section 5, we strongly urge the FTC to reconsider.”

The real issue appears to be concern within the FTC that it doesn’t have adequate evidence to sue Google successfully under antitrust laws for giving its own services higher ranking, thereby pushing down the offerings of other search engines.  Insiders say the agency may also have difficulty proving that consumers have been hurt.

Last week, FTC Chairman Jon Leibowitz told Google to propose a resolution to a host of antitrust concerns in the coming days.

At issue is Google’s search engine ranking algorithm, which by nature creates winners and losers. For instance, by putting its own restaurant reviews, maps and shopping services at the top of the results page, it preferentially provides those results with almost 90 percent of users’ clicks, according to Fairsearch.org.

The algorithm may override agreements to provide search services to online publishers. The FTC also is investigating allegations that Google has used customer reviews from other websites without permission.

A final vote by the agency’s commissioners on whether to file a lawsuit is expected before the end of the month.

Some observers say the commission should make Google apply its algorithm equally to its own content and that of third parties.

Previous post:

Next post: