Inside Google

It’s been a tough week for Google as it faced legal challenges from around the world, the most prominent being that Department of Justice antitrust staff is preparing for the possibility of a suit to block the Internet giant’s acquisition of the travel software company, ITA.

My understanding is that DOJ staff have told some interested parties that they oppose Google’s ITA acquisition, but that the decision on how to proceed is now in the “front office” where such things as political factors come into play.  To  me that means the question is whether the head of the Antitrust Division, Christine Varney,  can stand up to the pressure to approve the deal that Google will bring through a myriad of friends in Washington.

The story could have been leaked as a signal to Google that DOJ is serious about concerns in the effort to get the Internet giant to sign on to conditions in a consent degree that would keep both parties out of court.

Word of the DOJ activity was broken by Sara Forden and Jeff Bliss at Bloomberg News and other publications rapidly followed:

“Department officials haven’t made a final decision about whether to sue to block the purchase by Google, owner of the world’s most popular search engine, said the people, who requested anonymity because the agency discussions are confidential. . .
“Google triggered preparation for the government’s possible lawsuit last month by invoking a provision of federal law that forces the government to decide within 30 days whether to challenge the deal, the people said. In bringing the matter to a head, they said, Google prompted Justice Department lawyers to cancel Christmas holiday plans and put together a case.”

As I’ve argued before Justice is taking this probe very seriously despite Google’s spin that it is more or less routine. DOJ has good reason. Sen. Herb Kohl, chairman of the Senate Judiciary Antitrust Subcommittee, wrote a firm letter in December to Varney calling for a thorough probe and Former FTC Commissioner Pamela Harbour Jones opposes the deal. Both the New York Times and Washington Post have editorialized in favor of  close  scrutiny.

But Google’s legal woes were not just in Washington:

— From Brussels The New York Times reported that European antitrust authorities “are asking advertisers whether Google suggested they increase spending with the company in return for improved visibility in its Web search results. The investigators are also examining whether Google stymied companies who had tried to move their business elsewhere.”

— In South Korea police officially concluded that Google’s Wi-Spying broke two laws. They’ve turned the case over to prosecutors to determine whether to prosecute. If Google is ultimately convicted, the company could face fines of 50 million won ($44,800) and 30 million ($26,900).  Not a lot, but an important point.

— In Germany, The Wall Street Journal reported, German data-protection authorities have broken off talks with Google  over its Google Analytics tool, warning that German companies that use it could face legal action and fines.

Google will say that that when you’re big and successful you expect close scrutiny and that they are the Don’t-Be-Evil company. I say they’ve crossed the line in numerous areas and much of this won’t play out in a way that pleases the folks in the Googleplex in Mountain View.