Big win for Google

Google’s prolonged battle with antitrust regulators ended Thursday with the Federal Trade Commission closing its investigation into “search bias” without finding any wrongdoing on the part of the giant search engine. Here are some of the details from the Wall Street Journal:

Federal regulators who spent nearly two years probing Google Inc.’s search engine for possible antitrust violations came up virtually empty-handed, in a decision that confounded the company’s competitors by upholding Google’s central argument that its innovations benefited users.

The Federal Trade Commission won some narrower concessions from Google. The company agreed to make voluntary changes to its search practices and give online advertisers more flexibility to manage ad campaigns with rival websites. Also, Google agreed to a settlement resolving FTC charges that the company was stifling competition by misusing key mobile-device patents it acquired when it bought handset maker Motorola Mobility.

But the FTC’s five commissioners voted unanimously to close without action the core investigation into whether Google favored its own products and services in its search results and unfairly harmed rivals, a practice commonly known as “search bias.”

And here’s the New York Times’ take on the issue:

The Federal Trade Commission on Thursday found that Google had not violated antitrust or anticompetition statutes in the way it structures its Web search application — handing a big victory to the search giant in its ongoing dispute with regulators.

But the commission found that Google had misused its broad patents on cellphone technology, and ordered Google to make that technology available to rivals.

Google’s competitors, including Microsoft, have pressed vigorously for federal officials to bring an antitrust case involving its search business. Last year, an F.T.C. staff report recommended that the commission bring such a case.

The F.T.C. found that although Google sometimes favors its own products when producing search results with its ubiquitous search engine, its actions were “not undertaken without legitimate justification,” said Jon Leibowitz, the F.T.C. chairman.

Google agreed, however, to take certain actions to address what Mr. Leibowitz called “the most problematic business practices relating to its search and search advertising business.

But not everyone was happy about the outcome. The Los Angeles Times reported that Google rival Microsoft was upset with the ruling:

That means Google will voluntarily change some of its business practices, including how it uses content from other websites and allows advertisers to export data. It will also settle allegations that it misused patents to stymie smartphone competitors.

That’s a slap on the wrist as far as Microsoft is concerned. The software giant has accused Google of crushing competitors and harming consumers by abusing its dominance in Internet search and growing dominance in online video and smartphones.

“Hopefully, Google will wake up to a new year with a resolution to change its ways and start to conform with the antitrust laws,” Dave Heiner, Microsoft’s deputy general counsel, wrote in a blog post Wednesday. “If not, then 2013 hopefully will be the year when antitrust enforcers display the resolve that Google continues to lack.”

Google, which is facing antitrust probes in the U.S. and Europe, has maintained that it has not done anything wrong. It says it simply gives people quick and easy access to the information they want.

But even under “the bright lights of regulatory scrutiny on two continents,” Heiner said Google is not on its best behavior.

Heiner rehashed complaints that date back from 2011 that Google has not handed over the data Microsoft needs to improve the viewing of YouTube videos on Windows smartphones.

The FTC will have little recourse now that the inquiry is closed. According to Bloomberg Google will have to submit compliance reports for five years:

The agreement requires Google to give the FTC reports on its compliance with the agreement for five years. The agency has the right to review company documents and interview Google employees if it suspects non-compliance, Peter Levitas, a deputy in the bureau of compliance, told reporters.

Google critics, including FairSearch.org, the alliance of Google’s competitors, had urged the FTC to delay a final decision until Google submitted a detailed proposal to the European Commission’s antitrust probe.

“The FTC’s decision to close its investigation with only voluntary commitments from Google is disappointing and premature” given that the European Commission is seeking to resolve “four abuses of dominance” it identified, FairSearch.org said in an e-mailed statement.

FTC Chairman Leibowitz said European law differs from that in the U.S.

“We have to do what’s right under our own laws,” Leibowitz said in an interview with Bloomberg Television. “When an investigation is ready to be closed, we like to close it.”

Either way, it’s a big win for Google since it will be able to promote its own holdings, and the government’s hands are tied when it comes to bringing another complaint.