On Wednesday, The Wall Street Journal published an inflammatory report under the title "Google Makes Most of Close Ties to White House," which attempts to make the case that Google was able to sway the outcome of the FTC's antitrust investigation into the company in 2012.
The publication recently published a leaked document from the investigation, which appeared to suggest the FTC would take action against the company months before it ultimately settled with Google making a few voluntary concessions. The new report cites numerous meetings between Google execs and top White House and FTC officials as well as Google's history with the Obama administration and lobbying efforts. The narrative in the report suggests that Google was able to utilize its Washington clout and spending to get itself off the hook.
The report is certainly worth a read, and does illustrate just how frequently Google is talking to top Washington officials. For example, it says Google employees have visited the White House for meetings with senior officials about 230 times (or about once a week) since the Obama administration has been in office, while one Google lobbyist alone has had over 60 meetings. It compares this to Comcast having only visited the White House about 20 times during that period.
The FTC is dismissing the report as "misleading" and says it doesn't contain facts that actually support the case it's trying to make. When all is said and done, there aren't really any smoking guns in it. There are a lot of interesting facts, and they don't look particularly good, but there's really no proof that shows any of this had a direct influence on the outcome of the antitrust probe. Another interesting tidbit from the report is that Microsoft, the company with the most to gain from antitrust action taken against Google, was the only company that contributed more in campaign donations to Obama's re-election campaign than Google. The report seems to use campaign donations to support its case that Google was able to buy its way out of FTC action.
The FTC put out a press release in response to the new media attention the probe is getting, which all stems from Wall Street Journal reports. Here's what it says:
The Federal Trade Commission conducted an exhaustive investigation of Google’s internet search practices during 2011 and 2012. Based on a comprehensive review of the voluminous record and extensive internal analysis, of which the inadvertently disclosed memo is only a fraction, all five Commissioners (three Democrats and two Republicans) agreed that there was no legal basis for action with respect to the main focus of the investigation – search. As we stated when the investigation was closed, the Commission concluded that Google’s search practices were not, “on balance, demonstrably anticompetitive.”
Contrary to recent press reports, the Commission’s decision on the search allegations was in accord with the recommendations of the FTC’s Bureau of Competition, Bureau of Economics, and Office of General Counsel.
Some of the FTC’s staff attorneys on the search investigation raised concerns about several other Google practices. In response, the Commission obtained commitments from Google regarding certain of those practices. Over the last two years, Google has abided by those commitments.
The Commission works vigorously to protect consumers and promote competition in the marketplace and does not hesitate to act on behalf of consumers when the facts warrant an enforcement action. In fact, on the same day that it closed the search investigation, the Commission settled a complaint alleging that Google’s conduct with regard to certain standard essential patents constituted unfair methods of competition under the FTC Act.
Today’s Wall Street Journal article “Google Makes Most of Close Ties to White House” makes a number of misleading inferences and suggestions about the integrity of the FTC’s investigation. The article suggests that a series of disparate and unrelated meetings involving FTC officials and executive branch officials or Google representatives somehow affected the Commission’s decision to close the search investigation in early 2013. Not a single fact is offered to substantiate this misleading narrative.
Finally, we regret the inadvertent disclosure of confidential documents and information in response to a Freedom of Information Act request. The Commission takes seriously its obligation to maintain the confidentiality of business and other sensitive information provided to the agency by all parties involved in our investigations. We are taking additional steps to ensure that such a disclosure does not occur in the future.
Note: Neither Commissioner Joshua D. Wright nor Commissioner Terrell McSweeny were at the Commission at the time of the decision on the Google search investigation.
The WSJ report also includes statements from Google, the FTC, and the White House, as well as Jon Leibowitz, the FTC chairman at the time of the settlement.
Google said: “We think it is important to have a strong voice in the debate and help policy makers understand our business and the work we do to keep the Internet open, to build great products, and to fuel economic growth."
Regarding the FTC document that leaked, Google said: "We understand that what was sent to the Wall Street Journal represents 50% of one document written by 50% of the FTC case teams. Ultimately both case teams (100%) concluded that no action was needed on search display and ranking. Speculation about consumer or competitor harm turned out to be entirely wrong. On the other issues raised, we quickly made changes as agreed with the FTC."
The White House said the FTC “is an independent agency and we respect their independent decision-making," and that "White House officials meet with business executives on a range of issues on a regular basis. These meetings help keep the White House apprised of outside perspectives on important policy issues. Our staff is cognizant that it is inappropriate to discuss issues relating to regulatory enforcement.”
Leibowitz said he “would never discuss any investigative matter with anyone at the White House, including the Google investigation," and that, “The FTC is an independent agency and Commissioners take their obligations of independence and confidentiality very seriously."
Greg Sterling, who has been reporting on Google antitrust matters for years, writes: "The Rupert Murdoch-owned, editorially conservative Wall Street Journal may have its own reasons for pushing a “conspiracy theory” against the Obama Administration. However, the combination of the internal FTC report and the disclosure of the White House meetings does create at least an appearance of a politically driven outcome."
There's no doubt that many will look to the Journal's report as a sign that Google can get away with whatever it wants in the U.S. Whether or not that's actually true is another matter. But like I said before, it doesn't exactly look good.
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