FairSearch Panel "Lessons From the Google-FTC Settlement"


On Wednesday, FairSearch convened a panel, “Lessons from the Google-FTC Settlement,” in Washington, D.C. as thousands gathered to attend the American Bar Association’s Spring antitrust section meeting. More than 125 ABA meeting attendees; consumer advocates; state Attorney General staff from Ohio, Texas, and Tennessee; officials from the FTC and DOJ; and competition authorities from the Korean Fair Trade Commission (KFTC), Fiscalía Nacional Económica (Chile), and the Turkish Competition Authority were in attendance.

Speakers included Matt Reilly, U.S. counsel for FairSearch, and the former Assistant Director of the FTC Bureau of Competition (click for video of Matt’s remarks, also embedded below); Gary Reback, an attorney who represented several Silicon Valley firms in the FTC’s investigation (click for video of Gary’s remarks, or find embedded below); Seth Bloom, former General Counsel of the Senate Antitrust Subcommittee (click for video of Seth’s remarks, which are embedded below); and Jenni Lukander, Head of Competition & Antitrust law, Nokia, a FairSearch member (click for video of Jenni’s remarks, which are embedded below).

Panelists offered their views on the FTC’s decision in January 2013 to close its antitrust investigation of Google’s business without taking action on the core question of Google’s search bias. They also reviewed expectations that U.S. and EU antitrust authorities are likely to continue examining Google’s desktop search advertising business, and emerging questions about Google’s mobile practices, for many years to come.

Matt Reilly, FairSearch’s U.S. counsel and former assistant director of the FTC Bureau of Competition

Reilly moderated the session and opened with an overview of the Google case. Reilly expressed optimism that the European Commission and other U.S. antitrust enforcers will step in to end Google’s search bias so that consumers, not Google, will be empowered to pick winners and losers in the online marketplace:

“This is an area that, again, we think is critically important for choice [and] innovation going forward; to making sure there’s a level playing [field] so no firm can dictate who the winners and losers are,” Reilly said. “It’s really important and antitrust agencies around the world have a unique opportunity to do something. We expect the battle to continue and hopefully it’s the second inning of a nine inning game and we expect to score some runs in the later innings.”

Gary Reback, attorney who represented Silicon Valley firms in the FTC’s investigation

Gary Reback discussed concerns that the FTC relied too much on Google’s own presentation of the effects of its search bias on consumers, and not enough on analyzing whether the changes made it harder for other innovators to reach consumers in the marketplace. He said the FTC’s analysis appeared to focus too much on standards from the Tyco case, and not enough on standards from the Microsoft case. He also expressed concerns about reports that the European Commission will accept a Google proposal to label its own search bias instead of forcing Google to stop favoring its own properties in results, outside of algorithmic (or ‘natural’) results.

Reback presented several slides of side-by-side comparisons of Google’s results that promoted its own products through search bias, with the same results without Google’s self-promotion, and said new research his firm has conducted showed that when you give consumers real choice, they will make a better, more informed decision about the results they select.

“If you give consumers choice, they will execute the choice. But if you just tell them something is bad and there’s no other choice then that’s not going to make any difference,” Reback said. “It’s like [approaching] someone in line at McDonald’s and you tell them to eat healthy. They’re not going to get out of line and go to a grocery store. Now if McDonald’s has healthy food, well that’s a big difference.”

Seth Bloom, the former general counsel of the Senate Antitrust Subcommittee

Bloom said the Senate panel looked hard at the impact of Google’s practices on future innovators when it held a hearing on “The Power of Google” in September 2011.

“Our concern, when we did this investigation on the Antitrust Subcommittee, when I was there, was to think about the next Yelp and to think about the new companies,” he said. “We sort of don’t know what we lose by having companies that find it very difficult to make it to the top of search rankings. But I think that’s something that one has to be cognizant of and I didn’t see a lot of that, or frankly any of that, in the FTC’s public statements.”

Bloom also noted that the new FairSearch complaint on mobile is very interesting, because the FTC did not review Google’s conduct in mobile. He said it’s very possible that the Justice Department’s antitrust division under Bill Baer’s leadership would take up questions about Google’s anti-competitive conduct in mobile and other aspects of its business during his tenure.

Jenni Lukander, head of competition and antitrust law at Nokia Corp.

Meanwhile, Jenni Lukander, head of competition and antitrust law at Nokia Corp., walked the audience through the rationale behind Google’s predatory distribution of Android:

“If you make a multi-billion investment, such as Google has done with the Android operating system, why would you just give it away? Would you do that just to enable open competition? From a company [perspective] it doesn’t seem rational. I believe there must be more. So what is the more?” Lukander asked. “The key is to understand with Google’s Android strategy is the more [smartphone market share Google amasses], it gets [more] control over the choices of other companies and ultimately the control of consumers.”

Panelists also took questions from reporters from Mlex and PaRR who were attending the event.

As the panel discussion showed, the antitrust questions around Google’s business are far from settled, and are likely to continue to remain a focus of antitrust authorities around the world for a long time to come.