For many observers, it's hard to take the news about the Federal Trade Commission's probe of Google's policies without the words "slap on the wrist" coming to mind. The government watchdog declined to fault the way Google lists search results, saying there was no evidence of anti-competitive practices, while winning some concessions on patents and the practice of "misappropriating online content."
The two-year probe by the five-member commission ended with no sanctions against Google, unlike a separate case ending in November in which a $22.5 million penalty was levied against the company for tinkering with Apple's Safari browser to make it easier to track users' activity via ads.
According to a statement on the FTC's Web site, the agreement means Google will stop "misappropriating online content from so-called 'vertical' Web sites that focus on specific categories such as shopping or travel for use in its own vertical offerings."
Google also agreed to meet prior commitments to let rivals use its patents on critical standardized technologies needed to make smartphones, laptops, tablets, and gaming consoles and "to give online advertisers more flexibility to simultaneously manage ad campaigns on Google's AdWords platform and on rival ad platforms."
"The changes Google has agreed to make will ensure that consumers continue to reap the benefits of competition in the online marketplace and in the market for innovative wireless devices they enjoy," said FTC Chairman Jon Leibowitz. "This was an incredibly thorough and careful investigation by the Commission, and the outcome is a strong and enforceable set of agreements."
The FTC said it would remain vigilant, but at a news conference Leibowitz said there was no antitrust case to be made. "Although some evidence suggested that Google was trying to eliminate competition, Google's primary reason for changing the look and feel of its search results to highlight its own products was to improve the user experience," The Wall Street Journal quoted the chairman as saying.
Microsoft, which competes against Google with its Bing search engine as well as in the smartphone operating-system market, reacted to news that the FTC would likely end the probe with only voluntary commitments from Google in a disappointed post on its issues blog Wednesday.
"You might think that Google would be on its best behavior given it's under the bright lights of regulatory scrutiny on two continents, particularly as it seeks to assure antitrust enforcers in the U.S. and Europe that it can be trusted on the basis of non-binding assurances that it will not abuse its market position further," wrote Dave Heiner, vice president and deputy general counsel at Microsoft.
Heiner said the investigation was important not just to Microsoft but to "thousands of smaller companies whose businesses depend on a competitive search marketplace."
As evidence of unfair competitive practices, Heiner noted that "Google continues to prevent Microsoft from offering consumers a fully featured YouTube app for the Windows Phone," despite complaints to the European Commission and the FTC.
Protesting Too Much?
Charles King, principal analyst at Pund-IT, said he was surprised at the FTC outcome.
"Apparently the agency was convinced by Google's implementation plan and its arguments against revealing its proprietary code and algorithms," King told us. "Competitors' melodramatic howls of outrage are also unsurprising and, in the case of Microsoft anyway, ironic in the extreme."
Microsoft was the subject of a far larger antitrust investigation and litigation.
"But the broader context of the ruling -- particularly the fact that it came during an administration which is far friendlier to regulation than we've seen for the better part of two decades -- is more important," King said. "That the FTC is willing to face a significant fire of public criticism suggests that the ruling is probably fundamentally right."