Inside Google

Group Says Action Should Benefit Americans After FTC’s Failure To Act Decisively

SANTA MONICA, CA — Consumer Watchdog today welcomed news reports that Europe’s competition authorities plan to file formal antitrust charges against Google on Wednesday and added that the action should benefit Americans after the Federal Trade Commission’s failure to take decisive action against the Internet giant.

“Google continues to manipulate its search results in an unfair and anticompetitive way,” said John M. Simpson, Consumer Watchdog Privacy Project director. “The FTC failed to stop the abuses despite a staff recommendation that charges be filed.  I’m optimistic the Europeans will end the Internet giant’s search manipulation and that Google will implement the required changes on this side of the Atlantic as well.”

News reports said that Competition Commissioner Margrethe Vestager would detail her plans to file a formal Statement of Objections against Google in a meeting with fellow European Commissioners on Wednesday.  She is due to fly to the United States after that.

Last month the Wall Street Journal revealed a 2012 report from the FTC’s Bureau of Competition that recommended to the Commission that Google be prosecuted.

“Google has one of the biggest lobbying operations in Washington and is executives have close ties to the Obama Administration,” said Simpson. “Could those connections have helped the Internet giant get what was a virtual free pass back in 2013?”

Consumer Watchdog noted that Google executives are already making connections with 2016 Presidential candidates. For example, Stephanie Hannon, who is Google’s director of product management for civic innovation and social impact, will become the chief technology officer of Hillary Clinton’s campaign.

“Google’s power and connections should be part of the discussion during the next presidential campaign,” said Simpson. “They should be subject of close scrutiny.”

Former European Competition Commissioner Joaquin Almunia’s efforts to reach a deal with the Internet giant without filing formal charges produced three unacceptable proposals.

“Without a formal Statement of Objections to motivate Google, the company simply engages in lengthy settlement talks and continues its abusive anticompetitive behavior,” said Simpson. “If nothing else, a Statement of Objections will concentrate Google executives’ minds and prompt serious negotiations.  If the company fails to give an adequate response, the path is open to force changes through an injunction and to levy substantial fines – up to around $6 billion.”

In a letter Tuesday calling for Vestager to file a formal Statement of Objections Consumer Watchdog said consumer welfare must be the ultimate test of any antitrust settlement and noted that consumer groups on both side of the Atlantic – BEUC and Consumer Watchdog – had objected to all three previous proposed settlement deals.

“They simply did not resolve the fundamental issue of search manipulation.  The heart of the problem is simple. Google has developed a substantial conflict of interest,” wrote Simpson.  “It no longer has an incentive to steer users to other sites, but rather favors its own services.”

The only way to deal with this conflict is to remove it, Consumer Watchdog said.

“Ideally, there needs to be a separation of Google’s different services and assets,” wrote Simpson. “At a minimum any remedy must insist that Google use an objective, nondiscriminatory mechanism to rank and display all search results – including links to Google products.”

Read Consumer Watchdog’s letter to Commissoner Vestager here: http://www.consumerwatchdog.org/resources/ltrvestager041315.pdf

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Visit Consumer Watchdog’s website at www.ConsumerWatchdog.org