Kohl and Lee: Issues Raised About Google Deserve 'Serious Scrutiny' by FTC

FTC needs to determine "whether Google's actions violate antitrust law or substantially harm consumers or competition"

By John Eggerton -- Broadcasting & Cable, 12/20/2011 10:15:24 AM

The chairman and ranking member of the Senate Judiciary Antitrust Subcommittee have added their weight to a Federal Trade Commission investigation into Google over competition issues in its search and online advertising businesses.

In a letter Monday to Federal Trade Commission Chairman Jon Leibowitz, Subcommittee Chairman Herb Kohl (D-Wis.) and Mike Lee (R-Utah) said that issues raised at their September hearing on the search giant, "The Power of Google: Serving Consumers or Threatening Competition?" deserve "serious scrutiny" by the FTC.

The senators said they were not taking a position on which of the options in that hearing title best apply, but suggested the FTC needed to figure that out. That wait-and-see approach contrasts with Kohl's approach when he has made up his mind. While some legislators are reluctant to advise government agencies on competition calls, in the AT&T-T-Mobile review, for example, he called on Justice and the FTC to reject the merger.

Lee asked some of the toughest questions at the September hearing, saying he was still concerned after hearing from the company's executive chairman, Eric Schmidt.

As reasons for their concerns, the senators point to Google's dominance in general search -- 60%-75% of computer-based searches, 95% of wireless mobile searches; its expansion into operating related vertical search sites that could give it an incentive to bias search in favor of those, and Schmidt's concession at the hearing when asked whether Google was a monopolist that he would agree the company was "in that area," and a Google executive's "clear admission of preferencing Google results."

Kohl and Lee said that the FTC needs to determine "whether Google's actions violate antitrust law or substantially harm consumers or competition" in an industry that is a "driving force in the American economy." They say their interest in the investigation is to "protect the Internet's openness, competitiveness, and capacity for innovation."

They add as a footnote to their letter that attorneys general in Texas, New York, California, Ohio, Mississippi, and Oklahoma have opened their own "full-scale" Google investigations and the European Commission is in the second year of its investigation.

The FTC confirmed last spring that it was investigating Google, which argues that it is simply doing what is best for the consumer, which is providing the most relevant responses as rapidly as possible, which in some cases means pointing them to Google-run subsidies like Google Maps and Google Finance.

"These letters are customary, and we appreciate that the committee reserved judgment as we continue to cooperate with the FTC," said a Google spokesperson. "We are committed to competing fairly on the Internet's level playing field."