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DOJ meets with firms seeking Google antitrust probe

By Craig Timberg,December 05, 2012

View Photo Gallery - : Google’s moves toward dominance: A look at some of the major deals…

The Justice Department has begun meeting with companies that long have accused Google of illegally skewing its search results and are losing faith that the Federal Trade Commission will act forcefully on their complaints, said people familiar with the matter.

Senior officials from the Justice Department, which shares responsibilities with the FTC for policing allegations of monopolistic behavior, have met with at least two companies in recent weeks, said these people, who spoke on condition of anonymity to describe private conversations.

This has come amid reports that the FTC may resolve its nearly 2-year-old investigation of Google without dealing directly with complaints that the company uses its power over the search market to gain an edge over rivals.

Those familiar with the meetings with Justice officials say they were of a preliminary nature and it was not clear if they would lead to any action. Justice considered launching an antitrust investigation before the FTC claimed the case last year.

Justice took over the high-profile antitrust investigation of Microsoft in the 1990s after the FTC, which is overseen by a bipartisan, five-member commission, deadlocked over complaints from Microsoft’s rivals that it was using its dominance of the market for operating systems to seek advantage in other businesses. The landmark showdown between Microsoft and Justice Department is often cited as a potential analogy by Google’s critics.

The FTC, the Justice Deparmtent and Google declined to comment.

Congress has taken a keen interest in the Google antitrust case and may welcome intervention by Justice should the FTC not act on allegations of search bias.

“In past investigations, the Department of Justice has been more aggressive in enforcing the antitrust laws to protect competition in cases when the Federal Trade Commission would not act,” said Sen. Richard Blumenthal (D-Conn.), a member of the judiciary committee who was Connecticut’s attorney general when Justice sued Microsoft, with the backing of many states. “The same potential opportunity exists here.”

He said he would not comment on whether Justice should step in until the FTC makes a final determination the in Google case, which many expect this month. Blumenthal added, “I’m concerned because the serious and credible claims about anti-competitive activity that certainly warrant investigation.”

The FTC, led by Chairman Jon Leibowitz, is weeks into intense settlement negotiations with Google. While the agency is demanding remedies to some allegations of monopolistic behavior, such as the alleged misuse of patents to hurt rivals, it is not clear that it has the votes on the commission to act on the most serious allegations of search bias. Google has offered some concessions but is resisting a binding decree that might limit its future business practices, according to those familiar with the talks.

Rival companies say Google routinely favors advertisers and its own specialized results when users search for travel services or products; those with other services say their links get demoted. Google recently changed all of its shopping queries to show results paid for by advertisers, prompting Microsoft, which operates the Bing search engine, to launch a high-profile ad campaign complaining that consumers were being “Scroogled” by Google.

The companies that have complained about Google, whose identities were not immediately known, have met with Scott A. Scheele, chief of the antitrust division’s telecommunications and media enforcement section at Justice. If the department decided to pursue a case against Google, it would not happen until after the FTC made a final decision on its case and a different section at Justice might take the lead.

Such a case likely would take months if not years to develop. Though the FTC has extensive documentation from its investigation, the antitrust division at Justice now has an interim head, complicating such a major initiative. It also could prove complex to pursue allegations of search bias if the FTC decides not to act on them.

Law professor Geoffrey A. Manne, who has been critical of the antitrust claims against Google, said it would be natural for companies frustrated by the FTC to go “forum shopping” in favor of a different potential outcome. Reports of the meetings with Justice could increase pressure on the FTC to act but Manne said that would be unlikely to change the outcome of the case, which has proceeded amid an unusual level of publicity as it pits some of the world’s most prominent technology companies against each other.

“I can’t image any agency having more incentives to bring that case if it could,” said Manne, executive director of the International Center for Law and Economics, which receives funding from Google.