Bloomberg News

FTC Said to Expand Antitrust Probe to Add Google+ Service

January 18, 2012

(Updates with comment from antitrust lawyer in last paragraph.)

Jan. 13 (Bloomberg) -- The U.S. Federal Trade Commission is expanding its antitrust probe of Google Inc., the world’s most popular search engine, to include scrutiny of its new Google+ social networking service, according to two people familiar with the situation.

The competition issues raised by Google+ go to the heart of the FTC’s investigation into whether the company is giving preference to its own services in search results and whether that practice violates antitrust laws, said the people, who declined to be identified because the probe isn’t public.

Google this week introduced changes to its search engine so that results feature photos, news and comments from Google+, naming the new function “Search, Plus Your World.” Users who opt for Google+ see personal information about their friends included from the social networking service when they enter a query. The changes sparked a backlash from bloggers, privacy groups and competitors who said the inclusion of Google+ results unfairly promotes the company’s products over other information on the Web.

Cecelia Prewett, an FTC spokeswoman, declined to comment on the widening of the agency’s investigation. Google disclosed the probe on June 24.

‘Benefit Consumers’

“We believe that our improvements to search will benefit consumers,” Adam Kovacevich, a spokesman for Mountain View, California-based Google, said in an e-mail. “The laws are designed to help consumers benefit from innovation, not to help competitors.”

He declined to comment on the FTC investigation.

The Electronic Privacy Information Center urged the FTC to investigate Google for the search changes, according to a Jan. 12 letter posted on its site. In the letter, the group raised concerns about the company’s “business practices.”

Twitter Inc., another social media service, complained in a public statement on Jan. 10 that changes in Google’s search engine could make finding Twitter posts on news events more difficult.

Danny Sullivan, founder of Search Engine Land, a website that reports on search engine marketing and optimization, joined the uproar over whether Google+ gives unfair precedence to its own service in a Jan. 11 blog post.

‘Relevant Information’

“Google’s job as a search engine is to direct searchers to the most relevant information on the Web, not just to information that Google may have an interest in,” Sullivan wrote.

“Google has faced a lot of accusations that it’s favoring its own services,” Sullivan said in an interview. “Most allegations haven’t held up. This is different. Google is suggesting to people that they may want to follow social media accounts -- but not all social media accounts, just Google’s.”

Google is seeking to fend off competition from Microsoft Corp.’s Bing and Facebook Inc. Last year, Bing began displaying Facebook data, such as restaurants, brands and links friends have recommended, in its search results. Facebook has more than 800 million members, compared with more than 40 million for Google+ as of October.

Google’s share of U.S. searches was 65.9 percent in December, according to ComScore Inc., an Internet market research firm. Microsoft was No. 2 at 15.1 percent and Yahoo! Inc. was No. 3 with 14.5 percent.

Advertising Rates

In its broad monopoly investigation, the FTC is focusing on whether Google unfairly ranks search results to favor its own businesses and increases advertising rates for competitors, a person familiar with the investigation told Bloomberg in August.

The agency also is examining whether the company is using its control of the Android mobile operating system to discourage smartphone makers from using rivals’ applications, the person said.

“The antitrust issues raised by Google+ deserve to be looked at,” said Allen Grunes, an antitrust lawyer at Brownstein, Hyatt Farber Schreck LLP in Washington.

“When Google enters a business that it wasn’t previously in and then elevates its own search rankings above competitors’, there’s the possibility that Google can claim the market,” he said.

Joshua Wright, a professor at George Mason University School of Law, said in a blog post that the antitrust question is whether “there is plausible evidence of anticompetitive harm -- that is, harm to competition rather than individual rivals like Bing, Twitter, or Facebook.

“My personal view,” he said, “is that there is no such evidence.”

--With assistance from Jeff Bliss in Washington. Editors: Fred Strasser, Andrew Dunn

To contact the reporters on this story: Sara Forden in Washington at sforden@bloomberg.net; Brian Womack in San Francisco at bwomack1@bloomberg.net.

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net; Tom Giles at tgiles5@bloomberg.net


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