Google's antitrust settlement means few changes

IDG News Service - The U.S. Federal Trade Commission's antitrust settlement with Google will create few changes in the way the company operates, both critics and fans of the deal said.

The settlement, announced by the FTC Thursday, showed an agency largely willing to let the marketplace determine the winners in the Internet search and advertising market, said Eric Goldman, director of the Santa Clara University School of Law's High Tech Law Institute.

"Today, they made clear that the best way to protect America's consumers was for the FTC to do effectively nothing," Goldman said during a press conference organized by the Computer and Communications Industry Association (CCIA). The FTC decided to "step aside and let Google continue to work hard to cater to its customers and let its competitors work hard to cater to their customers."

Goldman praised the FTC for not seeking stronger remedies. "It's difficult for regulators to reach that conclusion -- that the best thing for them to do is not regulate," he said. "From the outset, there wasn't any clear evidence that Google had engaged in any impermissible practices." The CCIA represents a range of tech companies including Microsoft, Google, Facebook and eBay.

While Goldman praised the FTC's decision, a group of Google rivals said the settlement will allow Google to subvert competition. The FTC settlement comes just weeks before Google is due to deliver a detailed proposal on alleged abuse of dominance to the European Commission, said FairSearch.org, a group made of Google competitors including Microsoft and Oracle.

The settlement leaves the FTC without a major role to play as the European Commission and some state attorneys general continue to investigate Google, FairSearch.org said in a statement. "The FTC's inaction on the core question of search bias will only embolden Google to act more aggressively to misuse its monopoly power to harm other innovators," the group said.

In the settlement, Google agreed to make some standards-essential patents involving mobile and Web technologies available on fair and reasonable terms. The settlement requires Google to engage in six months of negotiations and an arbitration proceeding before seeking injunctions on the patents covered.

Google also agreed to allow websites to opt out of having some of their content scraped by the search engine and used on Google sites.

But the FTC did not find enough evidence to support complaints by Google rivals that the company was engaged in manipulating search results for its own benefit.

The CCIA largely sees the settlement as a "measured decision" by the FTC, said Ed Black, president and CEO of the trade group. However, Black is concerned that the agreement on content scraping from other websites will raise questions about the long-established fair use of snippets across the Web, he said.

The FTC should be applauded for its "prudence," said Glenn Manishin, an antitrust lawyer at Troutman Sanders, a law firm with offices in Washington, D.C., and other cities. "We trust the marketplace to make the best decisions and not government," he said. Manishin represented trade groups that called for tough sanctions in the U.S. antitrust case against Microsoft.

The FTC's actions reflect the belief that there are few barriers to entry in the online advertising market, he added.

The conservative National Taxpayers Union and the United States Hispanic Chamber of Commerce also applauded the settlement.

The FTC and its staff "undoubtedly wanted more than the few voluntary modifications to which Google has agreed," added Thomas Lenard, president of the Technology Policy Institute, a free-market think tank. The agency demonstrated its professionalism "by concluding that the evidence did not support bringing an antitrust case and that no additional remedy was likely to benefit consumers," he added in an email.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.