Google confirms US probe into search business

WASHINGTON—Google confirmed on Friday that the US Federal Trade Commission (FTC) has begun a review of the Internet giant’s lucrative search and advertising business.

“Yesterday, we received formal notification from the US Federal Trade Commission that it has begun a review of our business,” Google said.

“We respect the FTC’s process and will be working with them (as we have with other agencies) over the coming months to answer questions about Google and our services,” Google said in a blog post.

Google said in the blog post that it was “still unclear exactly what the FTC’s concerns are.”

But in a filing with the US Securities and Exchange Commission (SEC), the company said it had received a subpoena from the FTC “relating to a review by the FTC of Google’s business practices, including search and advertising.”

The Wall Street Journal reported Thursday that the FTC would open a formal antitrust probe into whether Google was abusing its dominance on the Web.

The newspaper said the probe will look at whether Google “unfairly channels users to its own growing network of services at the expense of rivals.”

Google controls around 65 percent of the lucrative US Internet search market and makes most of its money from search-related advertising.

In the blog post, Google’s Amit Singhal said the company is guided by doing “what’s best for the user” and that its business principles will “stand up to scrutiny.”

European Union competition watchdogs opened an investigation in November into whether Google is abusing its power in online search and the US state of Texas is conducting a similar probe.

Two US senators also asked earlier this month that Google chief executive Larry Page or executive chairman Eric Schmidt attend a hearing in Washington on competition issues in Internet search.

Google proposed that chief legal officer David Drummond testify instead but the senators said in a letter to Google obtained by AFP that they would “strongly prefer” for Page or Schmidt to attend the hearing.
The Senate panel could issue a subpoena compelling Page or Schmidt to testify but the senators said they would “very much prefer to work this out by agreement rather than needing to resort to more formal procedures.”

Google has faced increasing scrutiny from US and European regulators as it has grown over the years from a scrappy startup into an Internet powerhouse.

In April, US Justice Department approved Google’s entry into the online travel sector with its $700 million purchase of flight data firm ITA Software but it insisted on a number of concessions from Google.

Several online travel sites, including Expedia, Kayak and Travelocity, had sought to block the Google-ITA deal, claiming it would give Google too much control over the lucrative online travel market and lead to higher prices.

In late March, the FTC reached a settlement with Google over Google Buzz, the social networking tool rolled out last year which spawned a slew of privacy complaints.

Under the settlement announced by the US regulator, Google is required to implement a comprehensive privacy program and will be subject to independent privacy audits every two years for the next 20 years.

Also in March, a US judge dealt a setback to Google’s plans for a vast digital library and online bookstore, rejecting a copyright settlement hammered out by the Internet giant with authors and publishers.

In 2008, Google abandoned a plan to forge a joint search advertising partnership with Yahoo!, citing a desire to avert a “protracted legal battle” with US regulators.