Bloomberg News

Google Didn’t Lobby White House in FTC Case, Lawyer Says

January 11, 2013

Google Inc. (GOOG:US) didn’t lobby the White House to persuade the U.S. Federal Trade Commission to close its antitrust case, a lawyer for the world’s biggest search-engine operator said, countering suggestions by a Microsoft Corp. (MSFT:US) lawyer that political influence had played a role.

“I am completely confident that there was no request that the White House intervene with the FTC,” the lawyer, Jonathan Jacobson of Wilson Sonsini Goodrich & Rosati PC, said during an American Bar Association panel discussion of the case today in Washington in response to a question from the audience.

The FTC voted 5-0 on Jan. 3 to close its 20-month investigation into whether Mountain View, California-based Google unfairly skewed its search results. The company said it would voluntarily remove restrictions on the use of its online search-advertising platform and offer companies the option of keeping their content out of Google’s search results.

The decision to close the probe without any enforcement action was a blow to competitors including Microsoft, Yelp Inc. (YELP:US) and Expedia Inc. (EXPE:US) An alliance of such e-commerce and Web-search companies pressed the agency to bring a lawsuit, claiming Google’s dominance of Internet search, combined with the company favoring its own services in answers to consumer queries, violated antitrust laws.

Google has risen 2.3 percent on the Nasdaq Stock Market since the FTC announced its decision. The shares (GOOG:US) declined $1.49 to $739.99 today.

‘Extraordinary Reliance’

Charles “Rick” Rule, a lawyer at Cadwalader, Wickersham & Taft LLP who represents Microsoft, said during the discussion today that the decision, including the FTC’s “unprecedented and extraordinary reliance on unilateral commitments,” was “so inconsistent with antitrust precedent that it raises questions” about whether political influence was a consideration.

Rule, who said Congress should consider looking at the decision, also called on the antitrust division of the U.S. Justice Department to “pick up the job of investigating Google.” The Justice Department prosecuted a monopoly case against Redmond, Washington-based Microsoft in 1998.

Former FTC Commissioner Tom Rosch, who voted with the other four commissioners to close the probe without taking action on the search-bias allegations, said during the panel discussion that he “was not contacted or lobbied by the White House or lobbyists.” Rosch left the FTC today upon the swearing-in of his successor, Joshua Wright.

Consumer Protection

Rosch said he would have favored a combined antitrust and consumer-protection case alleging Google misleads consumers when it says it collects data about users to their benefit, because he said the search engine is using the information to deliver users advertisements targeted to their interests.

“Google’s entire business model is based on search- advertising revenue,” Rosch said.

Google had resisted the FTC’s efforts to extract a consent decree in the case, including sending Chief Executive Officer Larry Page to Washington to meet with FTC officials, people familiar with the matter said Nov. 28.

The company is in talks with the European Commission, which has asked the company to make a proposal that would settle its concerns about the placement of search results, among other issues.

Investigations Continuing

The EU’s antitrust chief Joaquin Almunia has asked Google to submit proposals by the end of January.

Investigations by state attorneys general in Texas and Ohio, among others, are also continuing.

The FTC did enter into a consent decree with Google over its use of patents that cover key smartphone technology, limiting Google’s ability to seek court orders barring competitors’ products when the company has agreed to license its technology on reasonable terms.

“The FTC did not take a pass on this as some critics allege,” said Jacobson, the lawyer for Google. “The idea that there was political interference is flatly wrong, and it’s a great insult to the commission to suggest otherwise.”

To contact the reporter on this story: Sara Forden in Washington at sforden@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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Companies Mentioned

  • GOOG
    (Google Inc)
    • $595.64 USD
    • 0.90
    • 0.15%
  • MSFT
    (Microsoft Corp)
    • $45.02 USD
    • 0.19
    • 0.42%
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