What FairSearch is Watching for in 2012
2012 is gearing up to be a major year for Google as “some of the most important events for the company next year will likely take place in courtrooms and government offices” (according to CNET).
But before highlighting what to watch for in 2012, here’s a recent highlight from 2011, in case you missed it.
The leadership of the Senate Antitrust Subcommittee, Chairman Herb Kohl (D-WI) and Ranking Member Mike Lee (R-UT) sent a letter to the Federal Trade Commission calling for a “thorough investigation” into Google including allegations that Google’s business practices leverage the company’s monopoly power in ways that are contrary to antitrust law. The bi-partisan letter received praise from numerous sources, including conservatives concerned with the impact that Google’s behavior has on the free market.
Rick Rule, head of the Justice Department’s Antitrust Division from 1985-1989, wrote “Senator Lee’s letter to the FTC shows that the Senator understands that promoting sound antitrust law enforcement is an important bulwark against the inevitable calls for regulation…in order for free-market competition to work, consumers and producers must be able to respond to the market’s ‘invisible hand’ free from artificial restraints imposed by government, by cartels, or by monopolists like Google.”
Mark Corallo, former Press Secretary and then Public Affairs Director for the U.S. Department of Justice from 2002-2005, reasoned that “when two senators not only agree on an issue but are willing to do something about it, the seismic tremors can be felt from the halls of the FTC right up to Google’s executive suites.”
Saul Anuzis, Chairman of the Michigan Republican Party, posted “A Conservative Approach to Antitrust,” in which he stated that the letter voiced “measured, pragmatic, and – yes! – even conservative concern…Given the importance of technology to our nation’s economy and Google’s rocky legal history, conservatives are right to encourage an examination of whether or not we have a truly competitive digital marketplace.”
In 2012, here are five things that FairSearch will be watching closely:
1. The European Commission’s antitrust investigation of Google. According to the Financial Times, the “European Commission (EC) is expected to issue a statement of objections (SO) spanning more than 400 pages that will spell-out allegations of Google’s abuse of dominance” early this year. The EC’s thorough investigation has been underway since 2010 and, at present, includes nine complainants.
2. The Federal Trade Commission’s antitrust investigation into Google. It seems likely, according to CNET, “that the FTC will want to resolve the matter before the presidential election, in part because the possibility of a new administration could lead to a different approach with regard to applying antitrust law to search.”
3. State AG antitrust investigations into Google. State attorneys general have been investigating whether Google is engaged in anticompetitive behavior as well. Texas, the first state to open an investigation, has been followed by New York, California, Ohio, Mississippi and Oklahoma.
4. Google’s exclusionary expansion into Flight Search. Ever since the Department of Justice placed strong conditions on Google’s acquisition of ITA Software in April 2011, Google has been testing the limits of the consent decree. During the review, Google publicly promised to drive “more potential customers to airlines’ and online travel agencies’ websites” but in the recent roll-out of its Flight Search product, the online travel agencies, which allow consumers to comparison shop, are conspicuously absent. Google’s response? “The airlines don’t want the online travel agents included.”
5. Which verticals will Google choose to exploit in 2012 using its dominance? What will it be? In 2010, we saw Google using its dominance in search and search advertising to edge out competitors in daily deals, social networking, local reviews, flight search and music. What will 2012 hold?