Google at the center of antitrust probes: source

NEW YORK (Reuters) - Google Inc found itself at the center of multiple government investigations on Thursday into whether it is using its dominance in search advertising to scotch competition.

Google Inc's logo is seen at an office in Seoul in this May 3, 2011 file photograph. REUTERS/Truth Leem/Files

At least three state attorneys general have started antitrust investigations into Google, a source familiar with the matter said.

The source declined to elaborate on the details of the investigations by the attorneys general of California, Ohio and New York as they were still in the early stages.

The attorneys general investigation into Google was first reported by the Financial Times, citing people familiar with the investigations.

The news of the attorneys general investigation emerged on the same day the Wall Street Journal reported that the internet search giant is about to receive the civil equivalent of a subpoena from the U.S. Federal Trade Commission as part of a probe into the company’s Internet search business.

The company, which dominates U.S. and global markets for search advertising, has been accused by competitors of favoring its own services over rivals in its search results.

Google, the world’s No. 1 search engine, and the FTC declined to comment on the Journal report.

Google was not immediately available to comment on the attorneys general investigation. The attorneys general of California and New York declined comment while the attorney general of Ohio was not immediately available for comment.

The FTC plans to send the civil investigative demand with a request for more information, the civil equivalent of a subpoena, within five days, according to the Journal report.

U.S. antitrust regulators have been concerned about Google’s dominance of the Web search industry, and it has been under investigation by the European Commission since last November.

Complaints has been filed with regulators on both sides of the Atlantic, many from Google rivals who 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.

“The distraction that comes from a federal investigation should not be underestimated,” Colin Gillis of BGC Partners said, noting that one of Google’s best options to grow -- by moving into adjacent markets -- was being hampered by antitrust probes.

Gillis noted that the real cost of the FTC investigation was not financial. “The issue comes down to management distraction, that’s a real cost,” he said.

Google has been in a stock slump. The company’s shares began the year a touch above $600, but are now below $500. Google shares closed at $480.2 on Thursday on the Nasdaq.

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

A New York judge has said 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 books that are in copyright but whose authors cannot be found.

Reporting by Abhishek Takle, Bill Rigby and Diane Bartz; Editing by John Wallace, Maureen Bavdek and Bernard Orr