Why the FTC Is Looking into Google
Google's search, shopping and travel businesses are likely to be scrutinized
The Federal Trade Commission's rumored anti-trust investigation into Google threatens to be "the biggest federal inquiry" into the search giant to date. Is this a U.S. v. Microsoft redux? The Wall Street Journal thinks so. "Google’s search engine stature in today’s Internet age is not dissimilar to Microsoft’s control of the Windows operating system. Both companies controlled technology that other players in the field can’t do without." So what aspects of Google's business are going to come under scrutiny? Here's what experts are pointing to.
Search and advertising By all accounts, this will be the main focus of the investigation. Right now, Google controls 65.5 percent of the search market, according to comScore, with Yahoo at 16 percent and Bing at 14 percent. The main argument coming from smaller companies is that Google favors its own web services in search results and downgrades the results from smaller competitors. "By making a site more or less likely to rise to the top of its search results, Google theoretically could affect how much traffic a Web site got and therefore how much it could charge for advertising," reports The New York Times. The problem with Google is that it has its hands in dozens of different industries, which could crack the investigation wide open."The segments of Google's business the FTC is most likely to investigate are the ones that overlap with other companies' business," David Balto the former policy director of the FTC told us this morning.
Shopping Jared Newman at PC World says Google's activities in this industry could draw scrutiny. "Search for a physical product, like a game console or smartphone, and you'll see specially formatted information from Google's own shopping index," he writes. "In Europe, at least, Google has drawn the ire of shopping search engine Foundem, which argues that it's been buried in Google searches. In the United States, Texas Attorney General Gregg Abbott has demanded documents related to Google shopping websites."
Travel If you look at Fair Search, the main organization calling for an antitrust suit, you'll see that its membership list is stocked with companies in the travel business such as Expedia, Hotwire, Zuji, Trip Advisor and SideStep. Google first came under scrutiny in this industry for its purchase of the travel company ITA. Though the DOJ approved that deal, "heavy conditions" were attached to the deal, notes Danny Sullivan at Search Engine Land. As The Times explains, "If another company’s Web site for, say, a travel service, competes with an ancillary business of Google’s, manipulation of search results could be considered anticompetitive." On the other hand, Balto noted that the Justice Department just finished a "comprehensive review" of Google's travel business, which makes it less likely that that industry will be a priority, given that the two divisions tend to coordinate.
Local search "Google has been putting a lot of effort into its own local search results, which list locations, reviews, hours of operation, and other pertinent information about nearby businesses," notes Newman. "The prominence of these results--listed with special formatting on the page--can crowd out competitors. In fact, Yelp CEO Jeremy Stoppelman has noted the dilemma it faces with Google, which scrapes Yelp user reviews for its own index: Yelp could opt out of being indexed by Google, but that would mean a huge loss in traffic from Web searches."