Google to face new antitrust probe

Inquiry will study company’s actions on display advertisements

Bloomberg NewsMay 24, 2013 

— Google is facing a new antitrust probe by the Federal Trade Commission into whether the company is using its leadership in the online display-advertising market to illegally curb competition, people familiar with the matter said.

The fresh inquiry, which follows the FTC’s decision to close a review of Google’s search business in January without taking action, is in the preliminary stages and may not expand into a larger probe, said the people, who asked not to be named because the matter hasn’t been made public.

Google has been drawing regulatory scrutiny around the world as it bolsters its market share of digital advertising.

Canada’s Competition Bureau is preparing to start a formal inquiry into Google’s search practices, the company disclosed last week. The European Union is investigating Google for the way it operates the search business and also has opened a probe into its handset unit, Motorola Mobility, over the licensing of its patents to rival device makers. Antitrust agencies in Argentina and South Korea are also scrutinizing the company.

Niki Fenwick, a spokeswoman for Google, and Peter Kaplan, a spokesman for the FTC, declined to comment on the probe.

Google, avoiding a potentially costly legal battle with U.S. regulators, ended a 20-month probe in January of whether it unfairly skewed search results by pledging to change some business practices and settling allegations it misused patents to thwart competitors in smartphone technology.

The company said it would voluntarily remove restrictions on the use of its online search-advertising platform and offer companies the option of keeping their content out of Google’s search results.

The FTC’s resolution of its search-practices probe came as a blow to Google’s competitors including Microsoft, Yelp and Expedia. An alliance of such e-commerce and Web-search companies pressed the agency to bring a lawsuit, claiming Google’s dominance of Internet search, combined with the company favoring its own services in answers to queries, violates antitrust laws.

For the past two years, the antitrust division and the FTC have split investigations of the Mountain View, Calif.-based company, with the FTC conducting a broad probe of whether Google’s business practices hurt competition and the antitrust division reviewing its acquisitions.

Google’s share of the display ad market reached 24 percent during the first quarter in the U.S. with its closest competitors, Yahoo and Facebook, each holding less than 10 percent market share, according to research firm IDC.

Facebook, the largest social networking service, lost its lead to Google last year and is expected to expand its market share at a slower pace.

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