Google Antitrust Investigation May Be On FTC’s Agenda

    April 5, 2011
    Chris Crum

Google’s proposed acquisition of ITA Software, and whether or not the Department of Justice approves it, may have additional ramifications for Google and government regulations.

According to a report from Bloomberg, the company is being considered for a “broad antitrust investigation” by the Federal Trade Commission, but before moving forward, the FTC is waiting to see what the DoJ does.

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The report suggests that such an investigation by the FTC could be on par with the famous Microsoft probe from a decade ago, which is widely thought to have greatly held Microsoft back in many areas of tech (which ironically, could have helped Google become the giant it has become).

Microsoft is part of the FairSearch Coalition, an organization mainly made up of travel sites that have banded together to push for the ITA Software acquisition to be blocked.

Last week, Microsoft SVP and General Counsel Brad Smith wrote on an official Microsoft Blog, a lengthy spiel about the company’s “concerns about search in Europe,” as it filed a complaint with the European Commission. He wrote:

At the outset, we should be among the first to compliment Google for its genuine innovations, of which there have been many over the past decade.  As the only viable search competitor to Google in the U.S. and much of Europe, we respect their engineering prowess and competitive drive.  Google has done much to advance its laudable mission to “organize the world’s information,” but we’re concerned by a broadening pattern of conduct aimed at stopping anyone else from creating a competitive alternative.

We’ve therefore decided to join a large and growing number of companies registering their concerns about the European search market. By the European Commission’s own reckoning, Google has about 95 percent of the search market in Europe.  This contrasts with the United States, where Microsoft serves about a quarter of Americans’ search needs either directly through Bing or through our partnership with Yahoo!.

At Microsoft we’ve shown that we’re prepared to work hard and invest literally billions of dollars annually to offer Bing, a search service that many now regard as the most innovative available.  But, hard work and innovation need a fair and competitive marketplace in which to thrive, and twice the Department of Justice has intervened to thwart Google’s unlawful conduct from impeding fair competition.  In 2008 the DOJ moved to file suit against Google for its unlawful attempt to tie up and set search advertising prices at Yahoo!, causing Google to back down.  And last year the DOJ formally objected to Google’s efforts to monopolize book content, a position affirmed by a federal district court in New York just last week.  Unfortunately, even this has not stopped the spread by Google of new and disconcerting practices in the United States.

He went on to say that the situation is worse in Europe than it is in the U.S.

Interestingly enough, Microsoft actually continues to gain search market share with each passing month. Bing has a ways to go before it gets to Google’s level, but Bing has said that its market share has actually grown every month since its launch. Bing also powers search on Yahoo and Facebook, two of Google’s other big competitors.

A decision from the DoJ on Google’s acquisition of ITA Software is expected soon. Meanwhile, Google is hardly slowing down in its offerings.

Last week, Google announced the +1 button, which would appear to be the company’s version of the Facebook “like” button. As you know, Facebook has basically managed to take over the web in some regards with this button and other social plugins. If the +1 button sees similar success, it could only help to keep people using Google for search.

Of course it remains to be seen if the +1 button will be a success or a bust, but you have to wonder if Bing’s plotting a “Bing it” button or something.

Is Google playing fair? Is Microsoft right? Tell us what you think.