The FTC just announced a settlement with Google, which the commission had been investigating for illegal, anti-competitive behaviour. And it’s mostly good news for everyone except Google: less patent warfare, less search engine bullying.
But Google is still off the hook in one very important way: the feds are dropping their investigation.
There are two major thrusts of the settlement: patents and search scraping.
With regards to patents, the FTC has blocked Google from using its patents (namely those it acquired from Motorola) to attack competitors. Instead of entering an intellectual property war against, say, Apple, Google will have to license out some of these patents to willing buyers — and some “standard-essential” patents that are so fundamental that they’re necessary to the existence of things like smartphones and tablets, will be available to rivals for free.
Less legal pissing. This is good.
The FTC also smacked Google hard over its behaviour on the web: although the feds say Google is allowed to put its own stuff (i.e. Google Local) above competitors, it’s barred from scraping the content of rivals to beef up its own services without permission. What does this mean? Google can’t rip Yelp reviews and pass them off as their own when you search for a new restaurant to check out. Rival companies can opt out of being scraped by Google, and Google can’t threaten to demote their search results — an action FTC Chairman Jon Leibowitz says amounted to “extortion”.
This is a major kick in the stomach to Google, which purchased Motorola Mobility pretty much only for its patent arsenal, which it could’ve weaponised against smartphone rivals. Google sure won’t be happy about this after buying Motorola for $US12.5 billion in 2011. That investment isn’t so sweet right now. But the settlement is also good for smaller companies on the internet, which now don’t have to worry being penalised by the de facto Official Search Engine of The Internet by daring to compete with it. Google will have to buy Yelp if it wants to chomp up all of its reviews, as it did with Yelp — or just make more good content for Google users on its own.
But the worst case scenario didn’t arrive for Google. This is the end of the FTC’s probe, meaning there won’t be any actual consequences inflicted upon it. No penalties for the way it uses its search algorithms to champion its own wares. This is one not-so-subtle victory for Google: the FTC is unanimously closing its investigation into allegations of anti-competitive search bias by Google (that is to say, prioritising its own products when you search for something). Although Google can’t demote its rivals, it can still promote its own services — YouTube, Gmail, Maps, etc — to the extent that it’s already doing it. Or maybe it’ll take it even further now that the feds are off of its back. In short, Google is free to Google-fy itself without the threat of a Microsoft-style anti-trust case, to beat its own chest, even more than it already has. And why wouldn’t it?