Sat, Jun 23, 2012 - Page 15 News List

Texas accuses Google of not handing over evidence


Texas Attorney General Greg Abbott is accusing Google of improperly withholding evidence to stymie an investigation into whether the company has been abusing its dominance of Internet search.

The allegations surfaced in a court filing earlier this week as part of Texas’ two-year probe into Google’s business practices.

Texas is among at least six US states examining whether Google manipulates its Internet search engine’s influential recommendations to stifle competition and drive up online advertising prices.

The US Federal Trade Commission and European regulators are conducting their own investigations into the same issues.

As regulators and other government authorities pursue their inquiries, Google is being asked to turn over reams of internal e-mails and other records that could illuminate the company’s strategy and provide insights into the mindset of its top executives.

Google has refused to hand over more than 14,500 documents covered in formal demands issued by the Texas attorney general in July 2010 and May last year.

Abbott filed a petition on Monday in a Texas state court seeking an order that would require the company to surrender more of the requested material.

News of the filing broke in the Wall Street Journal a few hours before Google’s annual share-holders’ meeting on Thursday at its headquarters in California.

The uncertainty posed by Google’s legal battles with government regulators and authorities around the world is one of the reasons the company’s stock has been lagging the rest of the market since co-founder Larry Page became chief executive more than 14 months ago.

Google shares fell US$12.30 on Thursday to close at US$565.21. The stock has fallen by 4 percent during Page’s reign while both the technology-driven NASDAQ and the Dow Jones industrial average have gained 2 percent.

Meanwhile, Google share-holders gave Page what he wanted on Thursday by approving an unconventional stock split intended to cement his authority.

The stock-split plan had the backing of Page, fellow co-founder Sergey Brin and executive chairman Eric Schmidt. Combined, the three control about two-thirds of the voting power at Google.

Google does not expect to be able to split the stock until at least October. That is because the company will not do so until it resolves a shareholder lawsuit challenging the plan. The complaint, filed in Delaware state court, alleges that the board breached its fiduciary duty by acceding to the wishes of Page and Brin.

Company executives also said on Thursday that Google intends to allow the newly acquired Motorola Mobility to retain its autonomy as it battles in the hotly contested smartphone market.

Google chief finance officer Patrick Pichette said there is unlikely to be a integration of the mobile products firm.

“It is important it stays on its own battlefield,” he said. “We are not integrating Motorola with Google, we are making sure it has everything it needs to win in its own space. You shouldn’t expect a full integration of the two companies.”

The mobile products firm has “fantastic assets that need to be reset, reprioritized ... and in that context think of Google in a way taking Motorola private,” he added

Google completed the US$12.9 billion deal last month for Motorola Mobility, a key manufacturer of smartphones and other devices that puts the Internet giant in head-to-head competition with Apple. It also acquired 17,000 patents with the purchase and has been strengthening its patent portfolio in the fight for dominance in the booming smartphone and tablet market.

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