• ‘Googlegate’: FTC Buries Report Alleging Search Manipulation

    The Federal Trade Commission reportedly decided in 2013 to end an investigation into anticompetitive practices at Google, despite a staff report recommending they pursue legal action.

    The Wall Street Journal reported Thursday that inadvertently-released documents reveal that officials in the FTC’s bureau of competition “concluded in 2012 that Google Inc. used anticompetitive tactics and abused its monopoly power in ways that harmed Internet users and rivals,” and suggested that the FTC challenge Google in court on three specific practices.

    “The findings stand in contrast to the conclusion of the FTC’s commissioners,” the article claims, noting that the commissioners “voted unanimously in early 2013 to end the investigation after Google agreed to some voluntary changes to its practices.”

    Jon Leibowitz, the FTC Chairman at the time, defended the decision by saying Google’s voluntary changes would offer “more relief for American consumers faster than any other option.” (RELATED: Gawker to be Penalized by New ‘Fact-Based’ Search Algorithm, Google Says)

    However, Net Competition Chairman Scott Cleland points out in a press release that, “The FTC staff findings and recommendation are very different from the ultimate FTC-Google settlement, which oddly did not focus primarily on fully resolving the FTC staff’s recommendations.”

    The WSJ suggests a possible alternative explanation for the FTC’s reluctance: “An antitrust suit against Google would have pitted Obama administration appointees against one of the White House’s closest corporate allies.”

    Cleland draws the same conclusion, citing a Bloomberg article describing Google executive chairman Eric Schmidt as a major factor in Obama’s re-election campaign, leading a data analytics effort “credited with producing Obama’s surprising 5 million-vote margin of victory.”

    “Just eight weeks after the Presidential election,” Cleland says, “the FTC announced it closed its search bias investigation.” (RELATED: FTC Concludes Google Investigation Amidst Lack of Evidence of Unfair Practices)

    Beyond “the appearance that the Google antitrust case was resolved for political reasons,” Cleland adds, “The previously-undisclosed FTC staff report supports and reinforces the European Commission’s findings of fact, that Google is a monopoly with 69-84% American market share, and that Google abused its monopoly by favoring its content over competitors.”

    In addition to undermining American diplomats’ efforts to defend Google against the EC report, he argues that the new revelations “will likely embolden other international antitrust investigations of Google in Canada, Brazil, India, and Russia, among other countries.” (RELATED: Google Decides What is Fact in New Search Results Ranking System)

    “The new revelations in the FTC’s staff report, in combination with the appearance of Google being treated differently by the FTC after the 2012 Presidential election, could warrant some oversight inquiry by Congress,” Cleland concludes, saying they raise serious questions about whether the FTC is “operating as an objective expert agency, independent from the Executive Branch.”

    Follow Peter Fricke on Twitter


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