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March 20, 2015

Leaked FTC Report Portrays Google as a Bully Abusing its Power

A leaked U.S. Federal Trade Commission report paints Google in a decidedly unflattering light as a bully and opportunist using its dominance as a search engine to snuff out the competition.

The 2012 report, obtained by the Wall Street Journal, reveals the FTC recommended suing Google for violating anti-trust rules and causing “real harm to consumers and to innovation.”

The search engine firm’s conduct, the report said, “helped it to maintain, preserve and enhance Google’s monopoly position in the markets for search and search advertising.”

The report was penned a year before the FTC unanimously ruled there was not enough evidence to support allegations that Google was giving its own services preferred billing in search results.

The decision, brought an end to a nearly two-year investigation, disappointing the company’s rivals who were gunning for strong sanctions against the search engine giant.

“Undoubtedly, Google took aggressive actions to gain advantage over rival search providers,” Beth Wilkinson, outside counsel to the Commission, said at the time of the decision. “However, the FTC’s mission is to protect competition, and not individual competitors. The evidence did not demonstrate that Google’s actions in this area stifled competition in violation of U.S. law.”

Although the FTC opted not to take action against Google, the 2012 160-page report speaks for itself.

Google, the report found, was boosting links to its own services even when those of its competitors would have better served its users. Yelp, for instance, may have been the more relevant search result, but Google Local would appear at the top of the results.

Other examples of poor conduct listed in the WSJ report included:

  • Google Shopping ranking above other comparison-shopping sites even when the rival site was a better choice for users.
  • Google copying and “scraping,” content from TripAdvisor and Amazon.com and told the rival companies their sites would be removed from its search listing if they objected. In one instance, Google used Amazon’s sales rankings to determine how it ranked products for its own listings, it said.

“It is clear that Google’s threat was intended to produce, and did produce, the desired effect,” the report said, “which was to coerce Yelp and TripAdvisor into backing down.” Google also said it would “use its monopoly power over search to extract the fruits of its rivals’ innovations.”

Despite the findings of the report, the FTC decided it would be more efficient to settle the anti-trust investigation.

The agency convinced Google to change some of its business practices such as promising to license under more reasonable terms the hundreds of the patents it acquired with the purchase of Motorola. The change meant rivals would have access to patents on critical standardized technologies needed to make popular devices such as Smartphones, laptops, tablets and gaming consoles.

Google also agreed to limit its use of bits and pieces from other websites 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 then-FTC Chairman Jon Leibowitz in a statement.

“This was an incredibly thorough and careful investigation by the Commission, and the outcome is a strong and enforceable set of agreements.”

Google was, however, fined $22.5-million by the FTC in August of 2012 to settle accusations it broke a privacy policy by “improperly tracking Apple Safari users.” The penalty remains the biggest fine the agency has imposed against a corporation for breaching a previous agreement with the agency.


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Jennifer Cowan is the Managing Editor for SiteProNews.

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