The Federal Trade Commission (FTC) announced it successfully resolved and closed the antitrust investigation into the business practices of Google, the internet search leader.
What looks like a solid victory for Google has left some of Google’s competitors stunned or at odds with the FTC’s findings. Those who expected or yearned for the antitrust gavel to come down against Google were troubled by Google’s ability to escape the FTC’s antitrust investigation without much harm to its reputation and without being hit with a hefty fine.
Since the entire antitrust investigation hinges on antitrust laws and their application, a clear understanding of anti-trust law is a must to understand what is really at stake for consumers, for Google, and for the FTC. A brief history of antitrust laws describes how at one point in history large business organizations formed trusts to flex their competitive powers in the marketplace. The Sherman Act (1890), which put a stop to large trusts monopolizing or manipulating the marketplace and distorting competition, the Clayton Act (1914) which outlawed price discrimination, prevents competitive threats like excessive dealings or tying agreements while personally holding execs liable and the Federal Trade Commission Act (1914) which gave birth to the FTC, are an integral part of all antitrust inquiries.
The FTC’s Antitrust Laws aim to promote & protect “free and open markets” which the FTC believes are the foundation of a growing economy. The FTC has the authority to investigate and stop unfair methods of competition and deceptive business practices. If business practices stifle competition or deceptive or manipulative, it’s probably not in alignment with Antitrust Laws.
Antitrust Investigation Closed
Close to two years of intense antitrust investigations boiled down to a two part landmark agreement between Google & the FTC:
- With regard to competition, the FTC found that Google had misused patent protections to prevent competition. Google agreed to change business practices that could throttle competition in search advertisement, smartphones, tablets, and gaming. The FTC pledged to make sure that this form of anticompetitive behavior has come to an abrupt end where Google is concerned.
- With regard to the allegations that Google unfairly altered search results in their favor to hamper competition, the FTC closed the investigation, finding the evidence did not support the claim. The FTC noted that the evidence also did not support the notion that Google displays its own content more prominently on its search pages. The FTC also indicated this part of the investigation was undertaken without merit.
Google will also publish the contents of this agreement on its website, and make it easily accessible to visitors.
These are the main findings after the FTC’s received 9 plus million pages of documents from Google & others, sworn testimony from Google executives, and relevant individuals from within the search industry. Google agreed to abide by the FTC’s agreement and will more than likely demonstrate its good intentions by going beyond these requirements.
There are critics who don’t agree with the FTC’s landmark agreement with Google. Edward Wyatt of the New York Times points out that some who openly criticize the FTC’s findings argue the FTC’s decisions were flawed because it examined and focused on the wrong information. Wyatt reports Google’s competitors and their perspective believe “the government should have looked at whether Google’s actions harmed its real customers — the companies that pay billions of dollars each year to advertise on Google’s site” instead of considering harm to consumers who use Google’s search information. The debate continues…
When it comes to Online Reputation Management (ORM), it looks like Website Administrators, Inbound Marketers and other digital professionals who handle Search Engine Optimization (SEO) & Search Engine Marketers (SEM) will have more ways to control how they appear in Google’s services beyond search (e.g., Google+, Local). Google will allow websites to opt out of Google’s other services, leaving their search rankings in Google’s search engine as they are organically without penalty. This may become a helpful tool when a search engine results page (SERP) doesn’t reflect the preferred online presence.
More AdWords Advertisement Flexibility: Google will remove current Adwords API Terms & Conditions and digital advertisers will be able to run advertisement campaigns on other advertising platforms and collect campaign management data external to Adwords. Consumers will be able to opt out of having their content featured on any of Google’s services other than search. This is a plus…a win for consumers, marketers and anyone working to build, repair or tweak their online reputation.
Google can continue to expand its business offerings as it move forward freely now that the FTC’s antitrust and anti-competition is in its rear view mirror. Google has faced legal woes in the past, and their passion to continually innovate and continue to push the envelope may continue put their Google’s reputation at risk. This is the reality technology innovators accept as technologies evolve and new innovations are born. Think if it as innovations price -the price that must be paid to innovate or to be an industry leader.
Google still has to uphold its part of the agreement or it will find itself back under the antitrust microscope. Google’s about page says: Google’s mission is to organize the world’s information and make it universally accessible and useful. As long as Google continues to offer more than search, its works beyond search will remain a perfect way to remind competitors and consumers about Google’s culture and ethos. Google can allow its goodwill to speak volumes on its behalf, like its recent free Wi-Fi announcement for the South West Chelsea neighborhood in Manhattan on the heels of the FTC’s findings. Consumers love freebies, especially those that make managing their professional and personal lives a little easier and less costly.
What do you think about this landmark agreement between Google & the Federal Trade Commission?