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Google confirms US antitrust probe

Calls regulator concerns 'unclear'

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Google has confirmed that the US Federal Trade Commission has opened an antitrust investigation into its search and advertising practices, and although the company says it respects "the FTC's process", it continues to insist that those search and ad practices will stand up to scrutiny.

With an SEC filing, the company said it received a subpoena and a notice of civil investigative demand from the commission on Thursday. That same day, The Wall Street Journal reported that such a subpoena was imminent.

The web giant also acknowledged the investigation in a blog post that rolled out the company's usual defense of its search business. "At Google, we’ve always focused on putting the user first," read the post – attributed to Google Fellow Amit Singhal – and in typical fashion, the company said that the FTC's scrutiny was the result of its success.

Singhal's post also called the FTC's concerns "unclear". But the commission's probe joins an ongoing investigation in the EU, and it will likely cover similar ground. In the EU, three vertical search engines have filed complaints against Google, and one, the UK-based Foundem, has been quite open about its stance.

Foundem's EU complaint takes aim at Google's Universal Search setup, which inserts links from other Google services – including Google Maps and Google Product Search – into prominent positions on the company's main search-result pages. Foundem says the setup is transforming Google's search engine into an "immensely powerful marketing channel" for its own services. In essence, the UK outfit argues that in much the same way Microsoft unfairly bundled its own applications with Windows, Google is unfairly bundling its own services with it search engine. Google's search engine controls 85 per cent of the market by some estimates, but its market share may be even higher.

Foundem's complaint also seeks scrutiny of the way Google handles manual interventions and appeals on its search engine, including how little information the company provides about how they work. "The half of our Complaint detailing the anticompetitive power of Google's exclusionary penalties is as much about the systemic failures of Google's manual review process as it is about the legitimacy of the penalty algorithms themselves," Shivaun Raff has told us.

She sums up the complaint like this: "You have an overwhelmingly dominant search engine. If you add to that that search engine's ability to apply discriminatory penalties - they're discriminatory because some services are manually rendered immune through whitelists - and you add the ability of that search engine to preferentially insert its own services at or near the top of the search results, all of that adds up to an unparalleled and unassailable competitive advantage."

Even in the face of an EU investigation, Google has not been upfront about its manual interventions. When it was revealed that the EU had opened an informal investigation in February 2010 – a precursor to the formal investigation now underway – the company's European Corporate counsel said that Google does not "whitelist or blacklist anyone” – and others at the company continued to make similar noises – but she was later contradicted by Google's Matt Cutts, who runs the company's webspam team.

In defending Google's practices, Amit Singhal laid out a long list of "principles that have guided us from the beginning", and these included "be transparent". But the company's search practices are far from transparent, and some practices have only been revealed in the wake the investigation in the EU. Though Google calls the FTC's concerns unclear, this discrepancy will surely play a large role in the investigation stateside. ®

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