Google reaches agreement with US regulators

Google has avoided legal action in the US by reaching a settlement agreement with regulators to change some business practices

Google has avoided legal action in the US by reaching a settlement agreement with regulators to change the way it presents some search results and runs its search advertising.

The agreement ends the Federal Trade Commission’s (FTC) 19-month investigation into Google’s business practices.

FTC chairman Jon Leibowitz said there were two aspects to the settlement. “The first involves Google’s misuse of patent protection to prevent competition. We stopped that abuse," he says.

“The second concerns allegations that Google unfairly biases its search results to harm competition. We closed this investigation, finding that the evidence does not support a claim that Google’s prominent display of its own content on its general search page was undertaken without legitimate justification,” he said.

However, Jon Leibowitz said while Google was now free to concentrate on its business and products, it had to be with a clear understanding that it must do so while competing fairly.

In terms of the settlement, Google has agreed to give advertisers access to more information about their campaigns and has agreed not to use other providers' material such as product reviews in its search results.

One of the biggest changes to be implemented by Google will allow advertisers to copy ad campaign data to other search engines, such as Microsoft's Bing, according to the BBC.

Fair and reasonable rates

Regarding the use of the patents Google acquired through is purchase of Motorola Mobility last year for $12.5bn, the firm has agreed to charge "fair and reasonable" rates to companies that need to use its patents classified as standard essential patents.

Google has also agreed not to take out injunctions forcing licensees to remove their products from sale if there are disagreements about how much a fair rate should be.

“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 Leibowitz.

“We are especially glad to see that Google will live up to its commitments to license its standard-essential patents, which will ensure that companies willing to license these patents can compete in the market for wireless devices,” he said.

Although Leibowitz described the outcome of the FTC’s investigation as a “strong and enforceable set of agreements,” Fairsearch, a group of businesses and organisations committed to defending competition in online and mobile search, said the FTC's decision to close its investigation with only voluntary commitments from Google was disappointing.

The group also described the decision as premature in light of the fact that it comes just weeks before the Google is expected to make a formal and detailed proposal to resolve the four abuses of dominance identified by the European Commission.

The group said in a statement that: “The FTC’s settlement is by no means the last word in this case, leaving the FTC without a major role in the final resolution to the investigations of Google’s anti-competitive practices by state attorneys general and the European Commission.

More aggressive

“The FTC’s inaction on the core question of search bias will only embolden Google to act more aggressively to misuse its monopoly power to harm other innovators,” the group said.

In December, the European Union’s competition commissioner Joaquin Almunia gave Google a month to address four areas of concern about it abusing its dominant position in its online search rankings.

European competition authorities began an investigation into Google’s business practices in the region in November 2010 after complaints from Microsoft and smaller rivals in the UK, Germany, France, Spain, Italy and the US.

If found guilty of breaching EU anti-trust rules, Google could face a fine of up to $4bn.

The outcome of the EU investigation could enforce more far-reaching changes than the US regulator has, according to the Guardian, as Google has a far bigger search share in Europe than it does in the US.

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