What do the allegations against Google have to do with antitrust?
Google is facing two separate investigations: one from the European Union and one from the U.S. Federal Trade Commission. The EU is investigating whether Google overpays for access to search results. Some Google features, like Shopping, include features beyond search; users may find little or no difference between the two. EU regulators say Google gets a large portion of its ad revenue from this arrangement. Google has been accused of even getting paid to omit a competitor’s app from the Play Store. EU regulators also suspect Google of favoring its own shopping service over competitors.
The FTC has also been investigating Google since 2012, but has only launched a preliminary inquiry this year. Complaints include one from two dozen small app developers who accuse Google of abusing its authority by removing their apps from the Play Store if they wanted to compete with the company’s shopping tool.
Is there a precedent for Google’s case?
Yes, there is. This is a real coup for complainants to get the federal government involved. The FTC’s intervention comes after nine years of repeated requests from members of Congress to look into Google’s conduct. While Google had done its fair share of shouting back — last week, it argued to congressional investigators that the FTC had no right to investigate the company’s market power — in practice, the tech giant is typically pretty quiet when it comes to antitrust law. For the last 10 years, Google has largely adhered to the letter of antitrust law — even settling its abuse case with Oracle earlier this year without admitting wrongdoing. In other words, Google is in a worse position now than it’s been in several years, and it’s still investigating.
What have Google’s opponents said?
So far, they are largely up in arms. The largest consumer electronics companies are very unhappy with Google’s search business. It’s a classic case of walled garden — Amazon and Apple, for example, make your books and TV shows available only through their own services, and Google is different, because other Google products are available, too. Amazon is leading the charge, but other companies have jumped on the bandwagon. Barnes & Noble is suing Google over its lack of advance notice when the company changed the way e-books are bundled with the search feature, and Microsoft filed complaints with the Federal Trade Commission about Google’s acquisition of Motorola Mobility, alleging that Google was unfairly integrating patents into its Android operating system.
Are there any differences between the cases in Europe and the U.S.?
The difference is in how important Google’s Android operating system is to the company. For Google, Android — especially the Google Play store — is a huge and growing business that it needs to sell ads, but it’s very smart that Google is now engaging in an investigation. The EU investigation has resulted in two significant concessions from Google: Google will stop giving its own shopping service preference in search results and it will make it easier for competitors to offer apps for its Android operating system. The FTC investigation has been far from as successful. Even though Google agreed to create a slightly altered version of its Shopping feature that excludes retailers that are rivals, and the company was forced to comply with requests made by Microsoft, the investigation is still ongoing.
What happens now?
In the European Union, the search antitrust case is moving forward, with Google and the European Commission expected to exchange documents and hearings. The FTC will likely announce an outcome, likely of a preliminary-probationary status, after the final meetings with Google.
How long will it take for the FTC investigation to come to an end?
We’ll have to wait and see.
Read the full story at USA Today, Business Insider and The Verge.