FTC, Justice Dept mull Google antitrust probe

WASHINGTON Tue Apr 5, 2011 6:18pm EDT

People walk past a logo next to the main entrance of the Google building in Zurich March 9, 2011. REUTERS/Arnd Wiegmann

People walk past a logo next to the main entrance of the Google building in Zurich March 9, 2011.

Credit: Reuters/Arnd Wiegmann

WASHINGTON (Reuters) - U.S. antitrust regulators may investigate Google Inc's dominance of the Web search industry, and will settle on the agency to launch a probe once scrutiny into the company's plan to buy ITA software is done, a source told Reuters on Tuesday.

The Federal Trade Commission and Justice Department will decide which has more expertise and whether to launch a formal investigation once the latter wraps up the ITA probe, the source said.

"They're waiting for ITA to pop," said the source, who spoke anonymously to preserve business relationships.

Shares of Google fell more than 3.2 percent on Tuesday, following a Bloomberg report that the FTC is considering an antitrust investigation.

The FTC and Justice Department declined to comment.

Google's proposed acquisition of ITA for $700 million has sparked worries in the tech world that travel websites such as Orbitz Worldwide Inc, Kayak and TripAdvisor could be deprived of ITA's software. Google announced plans to acquire ITA Software for $700 million in cash in July.

A potential U.S. probe, which would come on top of an ongoing European antitrust investigation, underscores the increasing non-operational risks that Google is facing, said BGC Partners analyst Colin Gillis.

"Google is definitely in the regulatory crosshairs," he said.

News of the possible probe comes a day after Google co-founder Larry Page officially took the reins as CEO after a decade under Eric Schmidt. Schmidt is now executive chairman and will focus on government relations, among other duties.

The Internet giant has been under investigation by the European Commission since last November.

Last week rival Microsoft Corp filed a formal complaint with European antitrust regulators, claiming that Google systematically thwarts Internet search competition.

There have been a series of complaints made to regulators, many from Google rivals which specialize in vertical searches like price comparison websites, which are widely seen as a threat to Google's position as a key gateway to online information.

Several of these have complained to U.S. and European antitrust authorities that Google is seeking to hurt their business by making them hard to find in Google searches, said Gary Reback, who represents several of these companies.

"They're (the Google rivals) all being penalized to some extent to another," he said.

"Since competition is one click away on the Internet, we work hard to put our users' interests first and give them the best, most relevant answers to their queries -- whether it's a web page, news article, image, or map," said Adam Kovacevich, a spokesman from Google.

Microsoft charged that Google hurt competition by "walling off" content on its YouTube site, so other search engines cannot display accurate results. It also said that Google made it hard for Microsoft's mobile phone software to show videos from YouTube, among other charges.

Google has had antitrust setbacks. The company walked away from a search deal with Yahoo in 2008 when the Justice Department signaled it was prepared to challenge it.

And a New York judge said last month that a deal Google had made with publishers and authors to create a massive digital library was illegal partially because it effectively gave Google the rights to orphan books, books which are in copyright but whose authors cannot be found.

(Reporting by Diane Bartz, with additional reporting by Alexei Oreskovic in San Francisco and Maria Aspan in New York; Editing by Bernard Orr)

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Comments (3)
zigadabooga wrote:
Even if the FTC proved Google has too much dominance, how will the FTC force me to use a crappy competitor? Don’t be evil.

Apr 05, 2011 1:03am EDT  --  Report as abuse
jlh4930 wrote:
The ruling is: You must use AltaVista’s websearch, as it was circa 1998.

Apr 05, 2011 11:33am EDT  --  Report as abuse
Vertigo wrote:
zigadabooga, The FTC will force you to use a “crappy” competitor by forcing Google to her knees until she is no longer competitive. The powers that be in Washington are frightened by the power that Google has amassed outside of the normal Washington insider channels of authority. They believe that Google is an upstart “loose canon” which has the potential ability to expose the Washington insider’s extraordinary potential for “evil.” We the people would be better served by Washington if we simply eliminated the Congress, Executive and Judicial, and put Google in charge there for a time.

Apr 05, 2011 11:56am EDT  --  Report as abuse
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