Friday, June 24, 2011, 12:00 am PT (03:00 am ET)
FTC reportedly readying subpoenas in antitrust investigation of GoogleThe U.S. Federal Trade Commission is finalizing approval to issue subpoenas to Google in an imminent antitrust investigation of the company's bread-and-butter search and advertising business, according to a new report.
Two people with knowledge of the matter told The New York Times on Thursday that the FTC is "preparing to issue subpoenas" to Google as part of a civil antitrust investigation into Google's search engine practices. The company's search and advertising business brings in most of the company's revenue, which reached $29.3 billion in 2010.
The commission's lawyers have been gathering information on Google's search and advertising operations for months and are particularly interested in whether Google's ordering of search results and related advertising constitutes "illegal anticompetitive behavior."
"This month, commissioners privately debated whether to authorize its Bureau of Competition to issue subpoenas to Google and are close to moving forward," the report read. Sources said a final decision regarding the subpoenas should come in a matter days, though they did note that the action is not yet final and could be postponed.
While federal agencies have scrutinized Google before, mostly over acquisitions of advertising-related companies such as AdMob, the impending investigation is said to be "wide-ranging" and could threaten the search giant's core business. This is the main act, said antitrust expert Ted Henneberry, a former trial lawyer at the Justice Department and partner at Orrick Herrington and Sutcliffe.
Though the FTC would not levy fines if Google were found guilty of anticompetitive actions, the company could issue cease-and-desist orders and file a lawsuit seeking a preliminary injunction against certain practices, the report noted. The commission shares jurisdiction over antitrust cases with the Department of Justice.
Google's opponents have called for an antitrust investigation into Google's search sector for some time. Responding to reports of an imminent investigation, FairSearch.org, which represents companies such as Expedia, Travelocity, Kayak and Microsoft that have objected to Google's actions, applauded the news.
"Google engages in anticompetitive behavior across many vertical categories of search that harms consumers, the organization said in a statement. The result of Googles anticompetitive practices is to curb innovation and investment in new technologies by other companies.
As of May, the company had a 65.5 percent share of the U.S. search market, compared to 16 percent for Yahoo and 14 percent for Microsoft's Bing.
The European Commission initiated a similar antitrust investigation into Google's search practices last year after complaints from small businesses. The case is still pending.
For its part, Apple has found itself in fierce competition with Google in the mobile advertising market. The iPhone maker attempted to purchase AdMob in 2009, but was outmaneuvered by its rival. It has been suggested that Google willingly overpaid for AdMob to keep it away from Apple.
The FTC investigated the AdMob deal, but approved it partly because of the emergence of Apple's iAd venture, which was made possible through the purchase of Quattro Wireless.
Apple announced the iAd program in April of last year. The platform attracted several big-name brands initially, but recent reports have suggested the program is "hurting" for advertisers.
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