24 June 2011 | Author: L. Sutherland Head of Media Content

Google to face a Fed-led probe

Reports have emerged suggesting that Google, long the king of the search market, is set to face a formal investigation into its actions in the field of online advertising.

According to the Wall Street Journal, federal investigators are close to slapping the search seraph with subpoenas and launching a civil probe to determine whether Google has abused its dominance when it comes to search advertising.

As the most popular search engine (with about 80 per cent of the European market and two thirds of US queries), Google has been a popular target for complaint and faced many other anti-trust probes over its 12 years in the business.

However, this month has seen US Federal Trade Commission officials privately debating whether to allow the Bureau of Competition to issue Google with subpoenas and The New York Times reports the organisation is close to handing out court orders.

The charges against Google would be dire: accusations include claims Google uses other companies' content without their permission, displays search results in a deceptive manner, buys up competition and manipulates search results.

While the investigation could conclude happily for the Mountain View giant - it isn't illegal in the USA to have a monopoly on a market, only to abuse that position - it clearly poses a serious threat. Additionally, a ruling against Google also has the potential to change the status quo for business competition online.

A number of independent websites have complained vocally about the way Google judges content, claiming that when it comes to the leading search engine, what's good for the goose is not good for the gander. Instead, they argue that Google-owned businesses and offshoots consistently hit the top of its search results - and that there is no conclusive proof that they should, when compared with similar offerings from independents.

Speaking to the Wall Street Journal, Jonathan Grossman, an antitrust lawyer at Cozen O'Connor in Washington who isn't involved in the dispute, said: "I think there's an excellent argument to be made that, given Google's large market share, the antitrust laws require it to treat its own content on an equal basis with the content of its direct competitors,"

Google is not unused to accusations, with the latest being an anti-trust probe into its acquisition of internet ad company Admeld, due to claims the company, which also owns AdMob and DoubleClick, is monopolising display advertising.

The Mountain View giant as a general rule takes such complaints on the chin, suggesting that many are made by disgruntled companies.

"Given our success and the disruptive nature of our business, it's entirely understandable that we've caused unease among other companies and caught the attention of regulators," two Google executives wrote on the company blog back in November.

If subpoenas are issued, offering the first concrete evidence that the FTC is ready to move forward with a formal investigation, the search company may not find it as easy to shrug off the accusations.

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