Sun, May 01, 2011 - Page 11 News List

Google’s power cues probe

Bloomberg

The US Federal Trade Commission (FTC) is preparing an investigation of Google Inc’s dominance of the Internet search industry by alerting high-tech companies to gather information for the probe, three people familiar with the matter said.

The agency told the companies it plans to issue so-called civil investigative demands for the information, said the people, who requested anonymity because the FTC hasn’t made the matter public. The demands are similar to subpoenas.

The FTC, which has been considering a broad investigation, waited until the US Department of Justice concluded its own review of Mountain View, California-based Google’s acquisition of ITA Software Inc, two people familiar with the matter said last month.

The justice department on April 9 approved Google’s US$700 million purchase of ITA on the condition it makes travel data available to search-engine rivals and lets the government review complaints that it’s acting unfairly.

An FTC investigation “has the potential to be very significant,” Eleanor Fox, a law professor at New York University, said.

“It could be ‘Google as the next Microsoft,’” Fox said, referring to the justice department probe and lawsuit settlement involving the Redmond, Washington-based software maker.

The final judgment in the Microsoft case expires next month.

Google is facing growing scrutiny from regulators as it bolsters its search business. Officials in Texas and the European Commission have started investigations into Google’s search dominance, while Ohio Attorney General Mike DeWine- is considering such a probe.

The FTC in February hired Timothy Wu (吳修銘), an information industries academic, who said in an interview last week that dominant Internet companies should be barred from monopolizing more than one market.

The FTC also recently tapped Edward Felten, known for cracking the music industry’s digital-copyright protection code, to be the agency’s technology chief.

Thomas Rosch, one of five FTC commissioners, said in an interview last month he supported a probe of the dominant players in the Internet-search industry, without specifying which companies.

Rosch is the only commissioner to say publicly that such an investigation is in order.

US Senator Herb Kohl, the Wisconsin Democrat who heads the Judiciary Subcommittee on Antitrust, has said he will examine Google’s business practices. US Senator Mike Lee of Utah, the panel’s senior Republican, has called for hearings.

Microsoft Corp, Kayak.com, Expedia Inc and other Google competitors banded together as FairSearch.org to oppose the acquisition of ITA Software, which makes software that provides data for online travel sites such as Orbitz Worldwide Inc. They said the deal would reduce competition and called on the justice department to impose conditions for the transaction.

An FTC investigation of Google “is long overdue,” said John Simpson, consumer advocate at Consumer Watchdog.

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