Google dodges antitrust lawsuit, agrees to settlement with FTC

The Federal Trade Commission (FTC) on Thursday closed a nearly two-year antitrust investigation of Google after the company agreed to change some of its business practices.

In a unanimous vote, the commission decided to take no action on the most significant issue in the case: whether Google manipulates its search results to ensure that its own services — including YouTube, Google Maps and Google Shopping — appear above the products of rivals.

Google’s competitors, such as Microsoft, Kayak and Expedia, argued that the government should prevent Google from using its dominant search engine — which has about a 67 percent market share — to stifle competition.

But at a press conference at the FTC's headquarters, Chairman Jon Leibowitz said that after an "exhaustive" investigation, the commission found there was not enough evidence to conclude Google's search results violate fair-competition laws.

"Some may believe that the commission should have done more in this case, perhaps because they are locked in hand-to-hand combat with Google around the world," Leibowitz said.

He added that some, including Google, likely believe the FTC should have done less.

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Leibowitz said there was "some evidence" to suggest that Google uses its search engine to eliminate competition, but he said the primary reason the company made changes to its search algorithm was to improve the experience for users. 

Under the settlement, Google voluntarily agreed to remove restrictions on the use of its search-advertising platform, AdWords, and to refrain from using rivals' content in specialized search results without their permission. 

As part of a separate investigation, the FTC concluded in a 4-1 vote that Google was overly aggressive in suing competitors over certain patents.

The patents, which Google acquired when it purchased Motorola Mobility, cover technologies that companies across the industry use so that phones, tablets, video game systems and other devices can communicate with each other. Motorola had promised to license the patents on fair and reasonable terms.

Google agreed to a binding order that requires the company to go through third-party mediation before it can sue competitors over their use of the technologies.

In a blog post, David Drummond, Google's chief legal officer, said the commission reached a clear conclusion: "Google’s services are good for users and good for competition."

He argued that Google has always tweaked its search algorithm over the years to help users find the information they're looking for — not to stifle competition.

But FairSearch, a coalition of Google competitors that had lobbied the FTC for aggressive action, called the government's decision "disappointing and premature."

"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 a statement.

FairSearch said the FTC should have waited for the European Commission, which has been conducting its own investigation of Google's search practices.

Some of Google's competitors have reportedly approached the Justice Department in hopes that the agency would launch its own investigation into Google's search practices. But Leibowitz said he thinks that “won’t be a serious possibility.”

The FTC was under pressure to complete the case before Monday, when Joshua Wright will replace J. Thomas Rosch on the commission.

Wright, an economist and law professor, has pledged to recuse himself from all cases involving Google for two years because the company funded some of his academic research.

— This story was updated at 2:20 p.m. and 3:24 p.m.