Google hiring 12 lobbying firms as FTC readies antitrust probe

Google said Friday it will hire a dozen new lobbying firms in a sign the search giant is taking the Federal Trade Commission’s upcoming antitrust investigation seriously.

“We have a strong story to tell about our business and we’ve sought out the best talent we can find to help tell it,” said a Google spokesperson via email.

News broke last week that the FTC has subpoenaed documents for an upcoming investigation into whether Google has abused its dominance of the search market, the first broad antitrust probe of the firm. In response Google has retained a host of Washington lobbying firms to give lawmakers their view on issues such as privacy, copyright enforcement and competition in the search market.

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The firms in question are Akin, Gump; Bingham; Capitol Legislative Strategies; Chesapeake Group; Crossroads Strategies; Gephardt Group; Holland & Knight; Normandy Group; Prime Policy; The First Group; The Madison Group; and the Raben Group.

Most of the firms have yet to register on behalf of Google, but will do so in the coming days. Google has drawn scrutiny recently on a host of issues, which helps explain the lobbying blitz.

Privacy concerns have taken center stage since the Street View WiFi spying incident last year, in which Google vehicles downloaded personal information from unencrypted wireless networks. A federal judge ruled this week that Google could be liable for the incident under the Wiretap Act.

The firm is frequently mentioned during the ongoing legislative debate over online privacy and behavioral advertising, due to Google’s huge online ad business.

Google has drawn criticism from lawmakers on copyright enforcement, with some stakeholders accusing the search giant of profiting off ads placed on sites that host pirated content.

In addition, Google’s Android smartphone platform has also been the target of accusations that the phones track and store user location data. Google has denied those accusations and testified that its phones do not track users.

Google has been gradually building up its presence in Washington in way similar to Microsoft, one of the company’s most important rivals.

Microsoft was the target of an antitrust probe in the 1990s over the company's decision to bundle Internet Explorer with Windows.

The resulting settlement barred Microsoft from predatory behavior and was meant to ensure competition in several emerging markets such as browsers and mobile.

But Google's case appears more complex, as the search giant still retains a much smaller share of the overall search market than Microsoft's dominance of PC operating systems.

As part of a settlement reached over an FTC privacy complaint in May, Google agreed to implement a comprehensive privacy policy and undergo outside privacy audits every two years. Stakeholders have argued the terms of the settlement should apply to all Web firms.

Google has said it strives to give users the best possible search results and noted the competition is only a click away.

But consumer groups have criticized the company as a behemoth that is hurting new entrants in the market.

“Google is so dominant that they can influence what we see, read and buy on the internet," said Steve Pociask, president of the American Consumer Institute. “So dominant that I believe the market has tipped and given them advantage that new entrants don't have.”

Update: Critics argue ACI is not a real consumer group and note Pociask served as chief economist 20 years ago for Bell Atlantic, which merged with GTE in 2000 to become Verizon. Pociask said he and his organization do no consulting work and receive no funding from telecom firms.

Google recently declined to send CEO Larry Page or Chairman Eric Schmidt to an upcoming Senate Judiciary hearing on the antitrust concerns, drawing threats of subpoenas from the antitrust subpanel’s leadership.

The committee’s review is independent of the FTC’s probe but is also focused on allegations from competitors that Google gives preference its own services.

The Committee estimated Google’s share of the search market at 70-75 percent. Lawmakers hope to hold the hearing before the August recess but continue to discuss who will appear with Google.

Google is already under investigation in Europe after Microsoft and other competitors complained about the firm’s search practices there, where Google holds well over 90 percent of the search market. In addition, the U.S. government has undertaken reviews of several of the firm’s recent acquisitions including ITA Software.

This story was posted at 11:50 a.m. and last updated at 3:07 p.m. on July 7th.