Report: Google May Be Hit With U.S. Antitrust Investigation

by Ostatic Staff - Jun. 24, 2011

Throughout its history, despite the total dominance it commands in search and search-related advertising, Google has remained relatively free of obstruction from the U.S. government. It has, in fact, faced more scrutiny from European antitrust officials than American ones. However, The Wall Street Journal is reporting that U.S. federal regulators are close to launching a far-reaching investigation of the company's search-related business, in search of possible abuses of its dominance. Whether the government finds anything or not, such an investigation could be a major problem for Google.

While The Journal only attributes its clames to unnamed sources, it says:

"The civil probe, which has the potential to reshape how companies compete on the Internet, is the most serious legal threat yet to the 12-year-old company, though it wouldn't necessarily lead to any federal allegations of wrongdoing against Google."

This would not be the first time that Google has faced antitrust scrutiny. Last year, the EU launched an antitrust investigation of Google (which Microsoft has weighed in on), and the Texas Attorney General's office has one running as well. For the most part, though, Google has faced only investigations into companies that it has proposed to acquire. The Journal reports that the alleged upcoming U.S. investigation could be much broader in scope:

"The people familiar with the matter said issues in the FTC probe are expected to include whether Google searches unfairly steer users to the company's own growing network of services at the expense of rival providers. Some companies complain about the way that Google ranks its own services in its 'natural' search results, or the amount it charges them for placing ads, claiming its market power gives it the ability to determine whether businesses succeed or fail."

As GigaOM notes,  "As the case against Microsoft showed, such investigations can harm a company even if they are ultimately unsuccessful." Indeed, the Department of Justice's multi-year scrutiny of Microsoft in its antritrust investigation of the company arguably had more of a deleterious effect on the company than the actual restrictions placed on Microsoft at the end of the process.

It was immediately after the DOJ's investigation of Microsoft that the company began to loosen its grip on maintaining dominant market share with its Internet Explorer browser, for example. The rise of popular open source browsers such as Google Chrome and Mozilla Firefox has everything to do with that. The EU's scrutiny of Microsoft's practices with the Windows OS and Internet Explorer included broad similarities to the DOJ's investigation.

It remains to be seen whether The Journal's claims are accurate, but Google's contributions to open source and more could be affected by an investigation. Google is already ensconced in a legal batlle with Oracle over alleged Java-related transgressions with its Android mobile OS. In a matter of days, we're likely to know whether Google is about to face one of the biggest challenges in the short life of the company so far.