For the second time in less than three years, Google is under investigation by the US Federal Trade Commission (FTC) over antitrust concerns, Bloomberg reported Friday morning. The inquiry will look into whether the company’s Android operating system has violated antitrust laws by privileging its own products and services over its competitors’ to an untenable degree, according to the Bloomberg report, which cited competing tech company executives who had complained about Google to the commission.
Both the FTC and Google declined to comment, the former saying that it does not comment “on an investigation or the existence of an investigation”. Google has been the target of several recent complaints, many to do with its advertising networks – a business worth an estimated $5bn according to industry analyst Brian Weiser. A European company called Disconnect complained to the European Commission (EC) earlier this year that its app, which isolated search functions like Google’s from Google’s trackers, had been repeatedly thrown out of Google’s app store. Others have voiced concerns to the FTC over the company’s YouTube Kids app, which they say unfairly exposes children to targeted advertising for unhealthy food, among others. Google is currently under investigation by the European Commission, as well. European antitrust laws are less lenient that American rules, said NYU law professor Eleanor Fox, whose focus is trade regulation. In an investigation into anticompetitive behavior, the FTC “would have to prove that [Google’s] conduct creates or increases market power”, said Fox. “In the EU, it’s a level playing field argument, and a competition on the merits argument.
The US says that’s not enough. You have to go further and prove that prices will go up and that less will be produced.” With relationship to advertising, Fox said, those arguments are abstract and hard to make. The FTC investigated Microsoft in 1993 over misuse of its market share through product bundling; that investigation closed but the Department of Justice then sued the company in 1998 over the same concerns, specifically its promotion of its own Internet Explorer over Netscape Navigator.
More recently, the FTC voted 5-0 in early 2013 to cease investigating the company (citing lack of evidence), but not until Google had agreed to change business practices including restricting access to advertising platforms that compete with the company’s own. Europe’s antitrust chief has set her sights on a series of investigations into Google that will see the US internet firm face intense scrutiny. Europe’s competition commissioner Margrethe Vestager, who took over the job a year ago and promptly launched an investigation into Google’s control over Android, says that reviewing Google’s practices is the top priority.
“The Google case is about misuse of a dominant position, to promote yourself in a neighbouring market not on your merits but because you can,” she told the Wall Street Journal. Vestager has pushed forward cases that had stalled under her predecessor Joaquín Almunia, and now sees the US firm’s dominance across multiple internet services as the next big frontier. Talking about the EU’s investigations into Google’s shopping, Android, advertising, search and other dominant practices Vestager said: “Things are very different, what they have in common is that the name Google appears in each one. Therefore I do not think of it as one Google case but literally as different investigations and different cases.” Shopping, advertising, Android, Maps and more Vestager said that the shopping case that analyses Google’s promotion of its own price comparison services over competitors is a high priority, but “it will take some time because it is analysis and data comparison etc, which is challenging”. The competition commissioner also reasserted that the EU’s probe into the control of Android – the dominant mobile-operating system globally – that she opened is still of high priority.
Vestager said: “It is a different creature than the Google case because people don’t think so much about the operating system on their phone. But those who produce phones or sell phones or develop applications, they are very preoccupied with the operating system. So we give that a high priority.” She added that each case is complex and multifaceted and that while one analysing Google’s dominance in shopping services may have similarities to other services, each one must be investigated thoroughly individually. “We cannot do one case and then say the rest is the same.
In a union of law and with due process, this cannot be the case.” Confirming that the commission would investigate 0ther services such as Google Maps and travel services, Vestager said: “It’s a very fine balance. The shopping case may have similarities when we eventually look at maps and travel and a number of other related services, because the complaints sort of tell the same story.” The EU’s various probes into Google will be long running and potentially far reaching, setting precedents to which other US internet firms such as Google’s parent company Alphabet, and rivals Facebook and Microsoft, may have to abide by.\
Vestager is under no illusion that any decisions the antitrust cases come to will be tested in court. Google and other US firms are no strangers to legal action and intense lobbying. But she said “the important thing is that people can understand what is going on”, which has not been the case for some of the more complex cases undertaken by the EU.