FTC gearing up for probe on Google

The US Federal Trade Commission (FTC) is preparing an investigation of Google Inc’s dominance in the internet search industry by alerting high-tech companies to gather information for the probe, according to people familiar with the matter.

The agency told the companies it planned to issue so- called civil investigative demands for the information, said the people, who requested anonymity because the FTC hasn’t made the matter public. The demands are similar to subpoenas.

The FTC, which was considering a broad investigation, waited until the justice department concluded its own review of California-based Google’s acquisition of ITA Software Inc, two people familiar with the matter said earlier this month. The justice department had, on April 9, approved Google’s $700-million purchase of ITA on the condition that it makes travel data available to search-engine rivals and lets the government review complaints that it’s acting unfairly.

An FTC investigation “has the potential to be very significant,” said Eleanor Fox, a law professor at New York University. “It could be ‘Google as the next Microsoft’,” Fox said, referring to the justice department probe and lawsuit settlement involving the Washington- based software maker. The final judgment in the Microsoft case expires next month. A Google spokesman, Adam Kovacevich, declined to comment. Cecelia Prewett, an FTC spokeswoman, also declined to comment, saying she didn’t confirm investigations.

Google is facing growing scrutiny from regulators as it bolsters its search business. Officials in Texas and the European Commission have started investigations into Google’s search dominance, while Ohio Attorney General Mike DeWine is considering such a probe.

DIFFICULT CASE
It may be difficult for the FTC to build a case against Google’s search business, said James Grimmelmann, an associate professor of law at New York Law School who specialises in internet law.

Google has taken the market share it has “because their search results are better,” he said in an interview. Still, federal investigators may find violations in how Google tried to use its clout to gain an upper hand in new markets, he said. “They’re doing stuff to try to take control of markets” that may be fodder for an FTC antitrust lawsuit, he said. Grimmelmann pointed to a lawsuit in Massachusetts state court by Boston-based Skyhook Wireless that alleges Google pressured Motorola Inc and other Skyhook customers not to use the company’s software for pinpointing a cell phone’s location.