There were some rumors earlier this week that the U.S. Federal Trade Commission (FTC) was about to launch a formal antitrust investigation into Google’s “core search advertising business.” Today, Google confirmed that it has indeed received formal notification from the FTC that “it has begun a review of [its] business.” In its official statement, Google notes that it’s “unclear” what exactly the FTC’s concerns are, but if an earlier Wall Street Journal report is correct, the FTC is especially interested in investigating if Google has abused its dominant position in the search advertising space.
To counter the FTC’s arguments, Google has launched a new site (“Facts about Google and Competition”) to answer questions about its business practices. There, Google stresses that the company plans to fully cooperate with the government’s investigation and that it’s not a gatekeeper but a guide who wants to give users and advertisers choice. In addition, the site is also meant to educate the public about how its search algorithms rank sites and decide which ads to display.
While Google is obviously the dominant search advertising company in the U.S., the government will have to prove that Google has acquired this position unlawfully. Groups like FairSearch.org argue that this is indeed the case (this group, which also includes Microsoft, was born out of the opposition to Google’s acquisition of ITA and hence includes a number of online travel businesses like Expedia, Kayak and Travelocity). To be successful, the government will have to prove that Google has indeed engaged in anti-competitive practices by, for example, willfully manipulating search results in favor of its own products.
This is not the first investigation of Google’s practices (and given the company’s size, this kind of attention is almost inevitable). Both the European Commission and the Texas attorney general have also opened probes into the company’s business practices.