Google faces possible antitrust probes in two other states
The EU and Texas. Maybe Ohio and Wisconsin
Google is facing a possible antitrust probe in the state of Ohio, and according to a report citing a person familiar with the matter, Wisconsin is weighing a Google antitrust probe of its own.
On Thursday, Bloomberg reported that both states were considering investigations of the web giant. Speaking with The Register, Dan Tierney, a spokesman for Ohio Attorney General Mike DeWine, confirmed that the state is considering a probe. "We are evaluating the facts to determine if it’s something we want to review,” he said, before declining to elaborate.
According to Bloomberg, Wisconsin Attorney General J.B. Van Hollen is weighing a probe of Google’s proposed acquisition of flight data outfit ITA Software, a deal already under investigation by the US Department of Justice. A spokesman for the Wisconsin Attorney General declined to comment on the matter. "Wisconsin doesn't disclose what it is investigating," he told us.
Google spokesman Adam Kovacevich also declined to comment on the Bloomberg story, but he pointed us to a blog post the company published when it was revealed that the state of Texas had launched an antitrust probe of Google. "We've always worked hard to ensure that our success is earned the right way - by building great products, not locking in our users or advertisers," the post reads. "That said, we recognize that as Google grows, we’re going to face more questions about how our business works."
According to Google, the Texas Attorney General has requested information regarding three companies, including UK-based price comparison engine Foundem, which is also the subject of a Google antitrust investigation in the European Union. The other two companies are the New York-based TradeComet and the Ohio-based myTriggers. Both of those companies operate vertical search engines and both have filed their own antitrust lawsuits against Google.
Famously, the mid-90s antitrust suit against Microsoft began in Texas. After that state opened its Redmond probe, the Department of Justice joined 20 states in the suit against the company.
The DoJ continues to investigate Google's proposed acquisition of ITA Software, eight months after the deal was first announced. ITA makes software that provides consumer flight and ticketing information of other companies, and Google says it wants to use ITA to expand its online flight services. A coalition of companies – including Microsoft and travel outfits Expedia and Travelocity – have opposed the acquisition, and the American Antitrust Institute, an independent watchdog, has published a paper questioning whether the deal could give Google an unfair advantage in the travel search market.
"In the narrowest sense, acquiring ITA would put Google in the business of supplying a technology input that powers downstream products in a vertical online search market. That is, Google would own what many consider to be the premier technology that online travel agents, travel meta-search websites, and airline websites license from ITA to afford Internet users the ability to search real-time pricing and seat availability data in the course of shopping for airline tickets online," the paper reads.
"Neither Google nor ITA currently competes in the provision of this data to Internet users by 'online travel search' firms, but together they seem to have such firms surrounded. Companies like Kayak, Orbitz and Hotwire, as well as airlines, rely heavily on Google to tell consumers where they can get airline pricing and availability data on the Internet, and they rely heavily on ITA to deliver the data itself."
According to Net Marketshare, Google controls more than 85 per cent of the overall web search market, but its market share may be higher.
The concern is that Google could unfairly use its web search monopoly to create a monopoly in the "vertical" flight search market. According to US antitrust law, it is not illegal to have a monopoly. But it is illegal to use that monopoly power in one market to try to control another.
In its complaint to the European Union, Foundem expresses similar concerns, arguing that Google could used its so-called Universal Search setup to unfairly dominate any vertical search market. Universal Search inserts links from other Google services into prominent positions of the company's main web search results pages. "Universal Search transforms Google’s ostensibly neutral search engine into an immensely powerful marketing channel for Google’s other services," Foundem has said.
"[It] allows Google to leverage its search engine monopoly into virtually any field it chooses. Wherever it does so, competitors will be harmed, new entrants will be discouraged, and innovation will inevitably be suppressed." ®