Google manipulated its search results to promote its own services over those of rival websites in ways that led to “real harm to consumers”, a previously unpublished report by American regulators has concluded.
The revelations were seized on by those calling for Brussels to challenge Google’s monopoly over search in Europe, and have sparked new claims that the search giant’s financing of Barack Obama’s re-election campaign swayed US regulators.
America’s Federal Trade Commission (FTC) voted unanimously to end its investigation into Google in early 2013 after extracting concessions from the silicon valley company.
But documents accidentally handed to the Wall Street Journal show the FTC’s own investigators claim Google’s “conduct has resulted – and will result – in real harm to consumers and to innovation in the online search and advertising markets”.
The findings, contained in a report produced in 2012 by FTC staff to advise commissioners before their final decision on the case, claim Google also caused “harm to many vertical competitors”.
Those who have complained that their businesses were damaged by Google include local directory Yelp, Microsoft and its search engine Bing, and the travel websites TripAdvisor and Expedia.
Staff also found Google illegally took content from Yelp, TripAdvisor and Amazon to improve its own services. In one instance, Google allegedly copied Amazon’s rankings for how well products were selling, and used them to rank its own results for product searches. Reviews and ratings were also found to have been lifted from Amazon.
Google was also found to have used its muscle to threaten sites that complained about their content being “scraped” or lifted without permission. When competitors asked Google to to stop scraping their content, they were threatened with removal from the search engine rankings, the FTC staff found.
In its 2013 settlement, the FTC ruled against Google on scraping. Rivals can now opt out of having their content lifted, without fear of being demoted in the search rankings.
Google general counsel Kent Walker responded that commissioners concluded no action needed to be taken. He said: “Speculation about potential consumer harm turned out to be entirely wrong. Since the investigation closed two years ago, the ways people access information online have only increased, giving consumers more choice than ever before.”
Europe’s new competition commissioner Margrethe Vestager is currently considering whether to adopt a new statement of objections – essentially a charge sheet – against the company. Brussels has been investigating Google’s dominance in search 2011 after a complaint filed by Microsoft, and has rejected three successive remedies put forward by the software giant.
The revelations will fuel calls for Vestager to take action, and may dampen concerns that European action against a US company could be seen as protectionist.
David Wood, legal counsel to ICOMP, which represents Microsoft, electronics comparison site Foundem and other complainants against Google, said: “These revelations demonstrate that this is not about national interests but about competition problems. It is a fascinating insight into Google’s practices. It’s made public things they didn’t want made public and highlighted discrepancies between what they said in public and what they actually did in the US.”
It is claimed the staff report recommended bringing a lawsuit challenging three separate Google practices. But the politically appointed trade commissioners eventually decided to negotiate a series of voluntary concessions from Google rather than embroil their organisation in a costly and high-profile legal battle.
Google was the second largest donor to Obama’s campaign for a second term as US president, and has been a leading silicon valley supporter of his administration.
Scott Cleland, publisher of the watchdog site Google Monitor and president of the Precursor research firm, said: “Public evidence concerning the sequence of events surrounding the FTC’s closure of its Google search practices investigation creates at least the appearance that politics, and not merits, drove the FTC’s ultimate conclusion.”
The FTC said an unredacted copy of the report had been accidentally released, and that it was taking steps to ensure this did not happen again.
- This article was amended on 20 March 2015 to include a reference to Microsoft as a member of ICOMP and to reflect the FTC’s response.
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