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Google To Be Subpoenaed by FTC?

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Google To Be Subpoenaed by FTC?

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Google CEO Eric Schmidt explained it all in the quarterly earnings conference call.

Google is only days away from being served a civil subpoena in an antitrust investigation by the Federal Trade Commission to see if the search giant "abused its dominance on the Web," a report said today.

While Google isn't a stranger to government probes, this new FTC investigation will be delving into the heart of its business practices -- advertising, the Wall Street Journal reported.

The new FTC investigation, by contrast, will examine fundamental issues relating to Google's core search-advertising business, which still accounts for the majority of its revenue. Those issues include whether Google—which accounts for around two-thirds of Internet searches in the U.S. and more abroad—unfairly channels users to its own growing network of services at the expense of rivals'.

Throughout the world, Google still handles the majority of Internet search, about 1 billion unique visitors a month, and has no shortage of critics. In Europe, the search engine is also facing a probe on whether it violates competition laws, and U.S. companies like Yelp, Expedia and Microsoft have cried foul -- that Google ranks its own websites above theirs.

Google denies acting in an anti-competitive manner, saying that users can easily use other search engines. Google says most of its antitrust backlash comes from companies that fear their business models will be upended by Google's entry into their market, WSJ reported. Both Google and the FTC declined to comment on the report.

"Given our success and the disruptive nature of our business, it's entirely understandable that we've caused unease among other companies and caught the attention of regulators," Google said in a company blog post.

In the meantime, both chief executives Larry Page and chairman Eric Schmidt may also be subpoenaed to appear before a U.S. Senate antitrust panel, according to Bloomberg News. The subcommittee said they "strongly preferred" either Page or Schmidt rather than Google's chief legal officer David Drummond in a June 10 letter.

Is the U.S. government being unfair to Google? There's no law against having a monopoly, only to abuse that monopoly. As we have mentioned previously, Google entering the travel search business isn't abuse, it's merely augmenting its services. The only real complaint we can see is Google Places, where Google has used Yelp's user-generated content. That said, it's user-generated content provided gratis by its readers, not material created by copywriters, so in our view, it's a borderline case.

Our federal funds would be better spent investigating companies like Facebook, that repeatedly change privacy settings for users, and creating online privacy laws that can prevent widespread abuse. 

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