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Analysts split on FTC's lenient Google antitrust decision

03 Jan 2013
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The close of the Federal Trade Commission's (FTC) antitrust investigation has left analysts with more questions than answers, with some arguing stronger punishments were needed, while others believe the decision was merited.

The FTC's decision to let the Google antitrust case end with only voluntary sanctions left many analysts wondering if enough was done. With a similar investigation in Europe still in the works some believe the FTC acted too quickly with its decision.

"The FTC's settlement is by no means the last word in this case, leaving the FTC without a major role in the final resolution to the investigations of Google's anti-competitive practices by state attorneys general and the European Commission," said search industry advocacy group Farisearch.org in a statement.

"The FTC's inaction on the core question of search bias will only embolden Google to act more aggressively to misuse its monopoly power to harm other innovators."

Google's harsher critics had hoped the FTC would throw take a more stringent line on its search practices. Groups like Fairsearch had been calling for the FTC to stop Google from engaging in search bias.

Fairsearch argued the FTC should have waited to pass judgement until the European Commission had concluded its antitrust investigation into Google. The group felt that had the FTC waited they would have realised that harsher punishments were in order.

And some analysts doubt that the FTC's ruling will do much to slow down the search giant.

Mark Webbink, executive director of the Center for Patent Innovations at New York Law School, said the FTC had done little to hurt Google's long-term prospects.

"Google didn't get exactly what they wanted. Yet, it's hard to see how Google has suffered any material harm from the ruling," Webbink told V3.

Meanwhile, others argued that in winning concessions from Goole, the FTC had achieved the best result for consumers, avoiding protracted appeal processes.

Charles King, principal analyst at Pundit-IT, told V3 that the backlash from the Google ruling should be seen as an indication that it was the right call.

King pointed out that the current FTC administration has been more open to regulation than its predecessors. He believes that harsher punishments would have been unleashed if the group felt it was necessary.

"That the FTC is willing to face a significant fire of public criticism suggest that the ruling is probably fundamentally right," said King.

"While the ruling is far less aggressive than it might have been, Google has still admitted to improper behaviour and will have to implement significant changes in its business practices."

How the ruling effects the European Commission's similar investigation is still to be determined. The effect that the ruling has on Google's ongoing patent disputes is also left as a question mark.

Only time will tell if the FTC's ruling will have any major effect on Google and the internet search market. However, for the time being the industry will have to accept that many more question are still up in the air.

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James Dohnert
About

James is a freelance writer and editor. In addition to ClickZ, his work has appeared in publications like V3, The Commonwealth Club, CachedTech.com, and Shonen Jump magazine. He studied Journalism at Weber State University.

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