Google doesn't violate antitrust laws
Google has settled an antitrust probe that largely leaves its search practices alone.
In a major win for Google, the United States' Federal Trade Commission unanimously concluded there was not enough evidence to support complaints from rivals that the company shows unfair bias in its search results toward its own products.
The announcement on Thursday (Friday, NZ time) caps a 19-month antitrust investigation by the FTC over Google's business practices.
Google is still trying to settle a similar antitrust probe in Europe. A resolution to that case is expected to come within the next few weeks.
FTC chairman Jon Leibowitz said the outcome "is good for consumers, it is good for competition, it is good for innovation and it is the right thing to do".
The US government's wide-ranging investigation ended with Google agreeing to charge "fair and reasonable" prices to license hundreds of patents deemed to be essential for mobile devices.
Google makes the Android operating system that runs many phones, and the agreement ensures the key technologies can be used in Apple's iPhone, Research in Motion's BlackBerry and smartphones running on a Microsoft's Windows software.
Those patents came as part of Google's $12.4 billion acquisition of device maker Motorola Mobility Holdings last May.
To placate regulators, Google also promised that upon request, it will exclude snippets copied from other websites in its summaries of key information, even though the company had insisted the practice was legal under the fair-use provisions of US copyright law.
Despite the fair-use defense, Google already had scaled back on the amount of cribbing, or "scraping," of online content after business review site Yelp lodged one of the complaints that triggered the FTC investigation.
Under the FTC resolution, Google's rivals will now be able to ask for their excerpts to be left out of Google's search results without having to fear that links to their sites will be penalised in Google's search rankings.
In another concession, Google pledged to adjust the online advertising system that generates most of its revenue so marketing campaigns can be more easily managed on rival networks.
FTC's investigation focused on allegations Google has been abusing its dominance in internet search.
Microsoft and other Google rivals say the search company has been highlighting its own services on its influential results page while burying the links to competing sites. Google has fiercely defended its right to recommend the websites it believes are the most relevant.
While the FTC said it uncovered some obvious instance of bias in Google's results during the investigation, the agency's five commissioners unanimously concluded there wasn't enough evidence to take legal action.
"Undoubtedly, Google took aggressive actions to gain advantage over rival search providers," said Beth Wilkinson, a lawyer FTC hired to help steer the investigation.
"However, the FTC's mission is to protect competition, and not individual competitors."
The FTC's findings vindicated Google, which has depicted its methods as a more convenient way to capsulise key information so users can get the information they desire more quickly and concisely.
"The conclusion is clear: Google's services are good for users and good for competition," David Drummond, Google's top lawyer, wrote in a blog post.
Throughout the FTC investigation, Google executives also sought to debunk the notion the company's recommendations are the final word on the internet. They pointed out that consumers easily could go to Microsoft's Bing, Yahoo or other services to search for information.
"Competition is just a click away," became as much of a Google mantra as the company's official motto: "Don't be evil".
The FTC's implicit endorsement of Google's approach to internet search is a blow for Microsoft and other rivals who had lodged complaints with regulators in hopes of goading the government into taking legal action that would split up or at least hobble the internet's most powerful company.
The Computer & Communications Industry Association, a technology trade group, applauded the FTC for its restraint.
"This was a prudent decision by the FTC that shows that antitrust enforcement, in the hands of responsible regulators, is sufficiently adaptable to the realities of the Internet age," said Ed Black, the group's president.
Microsoft did not immediately respond to requests for comment.
But FairSearch, a group whose membership includes Microsoft, called the settlement "disappointing and premature", given European regulators might be able to force Google to make more extensive changes.
"The FTC's settlement is by no means the last word in this case," FairSearch said.
Yelp also criticized the FTC's handling of the case, calling "it a missed opportunity to protect innovation in the internet economy, and the consumers and businesses that rely upon it".
Microsoft and its allies could still try to persuade the US Justice Department to pick up the antitrust probe where the FTC left off. That is what happened in the 1990s when the department took over a wide-ranging investigation into Microsoft's dominant position in personal computer software after the FTC backed off.
The attorneys general in at least six states - California, Texas, New York, Ohio, Mississippi and Oklahoma - also have been examining whether Google's business practices throttled online competition. The status of those state inquiries is unclear.
Investors had already been anticipating Google would emerge from the inquiry relatively unscathed.
Google's stock rose 64 cents to $723.89 in afternoon trading Thursday. Microsoft shed 35 cents, or 1.3 percent, to $27.27.