The FTC is examining Google’s immensely powerful and lucrative search technology, which directs users to hundreds of millions of online and offline destinations every day. The case has the potential to be the biggest showdown between regulators and Silicon Valley since the Microsoft suit 14 years ago.
Then as now, the central question was about the abuse of power. The agency’s inquiry has focused on whether Google has abused its dominance by manipulating its search results, making it less likely that competing companies or products come out at the top of the results page.
FTC officials cautioned that no decision had been made about a formal case against Google. But the hiring of Beth A. Wilkinson, a former Justice Department prosecutor who played a lead role in the conviction of the Oklahoma City bomber Timothy McVeigh, immediately catapulted the investigation to another level.
Several antitrust experts compared the hiring of Ms. Wilkinson — who has brought about 40 major cases in public and private practice and won them all — to the government’s hiring of David Boies to represent it against Microsoft.
The Microsoft case in the late 1990s transformed the tech industry, ultimately hobbling its most powerful company and allowing for the rise of new firms like Google. Now Google wields the same sort of power that Microsoft once did, and is under the same sort of scrutiny.
It has been involved in one privacy controversy after another over the last year. Indeed, the announcement of the hiring of Ms. Wilkinson eclipsed Google’s formal response earlier in the day to a fine by the Federal Communications Commission for obstructing a separate investigation.
The F.T.C. has hired outside litigators only twice in the last decade. Any decision about filing a suit is likely to be months away.
The general issue underlying the Google antitrust investigation is whether Google abuses its power in the market for Internet search. Google controls about 66 percent of the United States search market, more than all of its competitors combined, according to comScore. Microsoft’s Bing accounts for about 15 percent of Internet searches, with Yahoo gathering 14 percent.
Competitors have alleged that Google at times adjusts the algorithm that produces its search results to lower the likelihood that a link to a competitor or a potential competitor for Google’s products appears near the top of the results.
For example, if Google programmed its system so a consumer’s search for “washing machines” were more likely to produce a link to Google-related shopping sites as its top result, it could be interpreted as putting its competitors at a disadvantage.
Questions have also been raised about whether Google has done the same thing with the paid advertisements that appear on the right side of a Google search page.
While critics might say that Google is manipulating its results to disadvantage competitors, Google might assert that it is tweaking its model to provide the best results to consumers.
Google, of course, argues the latter, and has said many times that “competition is a click away.” When the company announced last June that the F.T.C. had begun a review of its business, it said that its system is geared toward what is best for the user, and noted that it makes public much information about how its rankings work.
Earlier Thursday, Google formally denied obstructing a government investigation into whether privacy laws were violated but agreed to pay a small fine anyway.
The Federal Communications Commission spent 17 months looking into Google Street View, a mapping project that involved photographing streets around the world. In 2010, it was revealed that the Street View cars with the cameras were also collecting data about the location of private wireless connections to the Internet and, in a disclosure that stunned privacy advocates, unencrypted Internet communications.
Google disclosed Thursday that the Department of Justice had investigated it last year over wire-tapping in the Street View case but did not pursue a case. The penalty assessed by the F.C.C. against Google earlier this month was $25,000. The search giant earns that sum about every minute.
I don’t know what the FCC was thinking with that stupid fine, as it has absolutely no effect on Google’s future actions which are most likely to be “business as usual.” On the other hand, the FTC seems to be serious about major violations by Google where everybody should be transparent except Google (Big Brother), because Google knows what is good for us.
Thanks to DAVID STREITFELD and EDWARD WYATT and the New York Times, and
Thanks for “listening”