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FTC nearing decision in Google antitrust probe

Four out of five officials agree

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The US Federal Trade Commission (FTC) is nearing a decision in its 16-month-long investigation into Google's search and advertising businesses, and sources say things are not looking good for the Mountain View–based company.

According to Reuters, three separate sources have confirmed that four of the five FTC commissioners are "convinced" the Chocolate Factory abused its dominant position in the web search market to stifle its competition.

Without naming names, the sources said one commissioner remains "skeptical." But if the other four can convince the holdout, the FTC could launch an antitrust case against the online ad-slinger as soon as late November.

The FTC has been investigating Google since June 2011, after hearing complaints from a number of companies that accuse the search giant of pricing ads unfairly, and of using search results to steer users to its own network of online services at the expense of competitors.

The US probe came following a similar investigation that was launched by the European Commission in late 2010. Google now appears ready to reach a settlement in the European probe, having agreed to a series of concessions that Brussels says will allow it to avoid formal antitrust charges. It's unclear whether US officials would be willing to offer Google a similar deal, however.

For its part, Google has consistently denied any wrongdoing. Speaking before Congress in September 2011, Google executive chairman Eric Schmidt disagreed with antitrust officials that the company had a financial incentive to skew search results in its own favor, saying, "I'm not sure Google is a rational business trying to maximize its own profits."

But the Senate Judiciary Subcommittee wasn't impressed with Schmidt's responses, and in December it urged the FTC to give the Chocolate Factory its closest scrutiny. Having done so, it seems the agency may now be close to filing formal charges.

This wouldn't be the first time Google has run afoul of the FTC. In April, the agency found that Google had misrepresented its privacy policies when it coded its websites to bypass the default privacy settings of Apple's Safari browser.

While Google was only slapped with a paltry $22.5m fine in that case, the issues in the FTC's search and advertising probe are much broader, and the implications much more serious.

Should the FTC find that Google has abused its market position, the search giant will be left with only two real choices: it can strive to reach a settlement, as it did with the European Commission, or it can prepare itself for a long and contentious legal battle. Either option is sure to be costly. ®

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