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FTC gives Google slap on wrist instead of face

FTC gives Google slap on wrist instead of face

U.S. government gives Google good talking-to over antitrust while EU still probes, analysts say

After a nearly two-year antitrust investigation, Google escaped with more of a slap on the wrist than a slap in the face, say industry analysts.

While getting the anti-trust equivalent of a good talking-to, the Internet giant is easily walking away from this scuffle with the feds without even a fine.

"The American public is not in a great big angry mood about Google," said Whit Andrews, an analyst with Gartner. "No administration wants to get on the wrong side of extremely popular brands. And I'm not saying there aren't legal justifications but watch what's happening with the fiscal cliff and gun control and taxes. No one is going to say, 'Let's stick it to one of the most popular brands on the planet.'"

This afternoon, the U.S. Federal Trade Commission announced that it had reached an agreement with Google after a lengthy antitrust probe.

The FTC said the Google agreed to change some of its business practices, to resolve what the feds called competitive "concerns." The changes include allowing competitors access to some standard technology patents for tablets, smartphones, laptops and game consoles.

The deal also pushes Google to give advertisers more flexibility to use rival search engines.

However, the settlement does not come with any kind of monetary fine and the FTC said it is not going to pursue allegations that Google shows bias in its search results.

"This is clearly not a game-changing thing," said Andrews. "Nobody is jumping up and down and waving their arms in the air and saying, 'We got em!.' And if you're at Google, you're drawing a deep, long breath right now."

He added that without any headlines that say, "Google is being evil" and without any major fines, or any fines at all, the company basically is walking away from this one.

Google itself marked this one in the books as a win.

"The U.S. Federal Trade Commission today announced it has closed its investigation into Google after an exhaustive 19-month review that covered millions of pages of documents and involved many hours of testimony," Google's chief legal officer, David Drummond, wrote in a blog post. "The conclusion is clear: Google's services are good for users and good for competition."

Patrick Moorhead, an analyst with Moor Insights & Strategy, noted the fact that the FTC didn't come near Google's search business was the biggest win for the company.

"Google dodged a major bullet from the FTC on search results," he said. "Google is search and search is Google. If the FTC had some control over the [search results], it would have been devastating to Google."

But unlike some other analysts, Moorhead said the settlement does take its cracks at Google.

"Google has consented to change their practices and they will need to open themselves to reporting and analysis to the FTC," he noted. "This is no light matter. Just ask Microsoft. Lawyers will now have a better seat at Google, and they will be involved in every major decision."

One question remains, though: Will the FTC's move affect the European Commission's own antitrust probe into the company?

The EC has been running an investigation since 2010, based on allegations that the company abused its heavily dominant position in online search to promote Google's other services.

"I think this puts a stake in the ground -- a lenient stake in the ground -- for the EU, which is considering many of the same issues with Google," said Dan Olds, an analyst with The Gabriel Consulting Group. "The U.S. ruling establishes a precedent that could certainly influence the thinking in Europe... Many expected the FTC to wait to see what the EC did before they acted."

Sharon Gaudin covers the Internet and Web 2.0, emerging technologies, and desktop and laptop chips for Computerworld. Follow Sharon on Twitter at @sgaudin, on Google+ or subscribe to Sharon's RSS feed. Her email address is

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Tags regulationinternetGartnerGooglesearch enginesU.S. Federal Trade CommissionInternet SearchGov't Legislation/RegulationFederal Trade Commission

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