Google faces FTC probe over alleged web dominance

24 Jun 2011

Internet giant Google is about to be hit with a number of subpoenas by US federal authorities in what amounts to a broad investigation into whether the company abused its dominance in web search advertising.

The investigation will focus on fundamental issues relating to Google’s core search advertising business.

The civil investigation has been described by The Wall Street Journal as the most serious legal threat to the 12-year-old company even though it might not necessarily lead to federal allegations of wrongdoing.

However, it has been compared to a landmark lawsuit taken by the justice department in the 1990s that almost saw Microsoft being broken up, its control over the PC world stunted and and its image tarnished.

However, it is believed it won’t be easy to launch an anti-trust suit against Google as the scope of antitrust law has been narrowed in recent years.

Triggers for FTC investigation

The core issue isn’t that Google has a monopoly in the online search advertising business but whether it did anything illegal to acquire that market share.

Some of the triggers for the investigation include whether Google’s services unfairly steer users in the direction of its growing array of services and concerns that Google’s market power determines the ability of companies to compete and the use of other companies’ content without their permission.

Google handles two-thirds of US web searches and more than 80pc in many parts of Europe.

The European Commission launched its own formal investigation in November after firms including Microsoft alleged Google breached European competition law.

In March, Microsoft filed an anti-trust complaint with the European Commission against Google, also alleging it broke European competition law.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years