Antitrust Law Daily Wrap Up, TOP STORY—Senator Wyden Finds FTC’s Conduct in Google Investigation “Alarming”, (Nov 29, 2012)

By Tobias J. Gillett, J.D., LLM.

Democratic Senator Ron Wyden (Oregon) has sent a letter to FTC Chairman Jon Leibowitz to express his concern regarding the FTC’s conduct of its probe into Google’s business practices, and its purported decision to investigate Google’s possible monopolization of the online search industry.

In the November 26 letter, Sen. Wyden referred to the apparent leaks of confidential information from within the investigation as eroding the credibility of the FTC, and declared “alarming” purported indications from the leaks that the FTC has focused its efforts “on allegations of monopoly in the online search industry.” Sen. Wyden praised Google’s search services, including its separation of paid search results from other results, and suggested that Google’s rapid gain in market share at the expense of its competitors “is not an indication that the search industry is uncompetitive, but evidence that Google is better meeting consumer preferences for a search engine.”

He argued that “online search has effectively zero barriers to entry,” and pointed to the recent entry of competitors such as DuckDuckGo that allegedly respond to consumer demand for search engine characteristics that Google does not offer. He declared that “[t]here is no question that the market is continuing to ensure the full range of consumer choice without government intervention.”

Sen. Wyden also questioned the FTC’s possible use of “its Section 5 authority in ways it has not previously,” and concluded that “[i]t would be troubling if the FTC sought to expand the use of its authority to target a company for simply being popular rather than engaging in unfair or deceptive practices that harm consumers.”

Google confirmed in June 2011 that the FTC had opened an antitrust inquiry into its business practices in the online search and advertising industries, while the European Commission had previously announced the launch of its own antitrust investigation. Some recent reports have hinted that the FTC may soon announce an enforcement action.

Sen. Wyden’s concerns echo those expressed in a November 19 letter sent to the FTC by two Democratic members of the House of Representatives, Rep. Anna G. Eshoo (California) and Rep. Zoe Lofgren (California). That letter also questioned the alleged expansion of the FTC’s Section 5 powers, called the release of confidential information from the investigation “irresponsible,” and urged the FTC to reconsider using its Section 5 power to address antitrust matters in the online services industry, should it intend to do so.

The letter by Rep. Eshoo and Rep. Lofgren followed closely on the heels of another Congressional correspondence with Chairman Leibowitz, this one signed by 10 Republican senators, more generally urging the agency to act within its statutory authorities and provide more guidance for American industry when taking action. The November 15 letter did, however, expressed similar concern about the Commission’s “apparent eagerness…to expand [FTC Act] Section 5 actions without a clear indication of authority or a limiting principle.”

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