Google Queried by FTC over Business Practices

FTC google inquiry

FTC google inquiry

Is Google, the self-proclaimed king of the search engine world, exploiting its supremacy in the virtual marketplace in ways that give it unfair advantages in associated sectors such as online local business reviews, best-deal type online shopping, advertising, etc ?

This is what the Federal Trade Commission (FTC) will reportedly be investigating.

According to a filing by Google with the Securities and Exchange Commission (SEC), Google has stated having received a subpoena from the Federal Trade Commission as part of a government investigation into the company’s business practices.

Re-confirming this on their official blog, Google made a statement, by way of an entry by Google Fellow, Amit Singhal, “Yesterday, we received formal notification from the U.S. Federal Trade Commission that it has begun a review of our business. We respect the FTC’s process and will be working with them (as we have with other agencies) over the coming months to answer questions about Google and our services.”

While not necessarily meaning that this investigation will result in a case, the reported probe by the FTC definitely poses the potential of turning into the hottest tech-world antitrust fight in over a decade, the last one of a comparable scale being the late 1990s Microsoft case.

Competition Claims…

While some of Google’s competitors have claimed that that the no. 1 search engine company manipulates the online advertising market, others have accused Google of influencing rankings of search results in a manner that results in maximum traffic getting diverted to its own products and away from competitive offerings.

Having become the most widely used virtual gateway on the Web, the competition amongst websites to figure high on Google’s rankings is quite stiff, be these websites, selling movie tickets, giving out stock quotes or offering navigation tools. The business practices-related concern this raises amongst critics is about the manner in which the search results are ranked, and the criteria influencing this ranking. Some market experts feel that the way in which this process is carried out might be detrimental to other competitive, innovative services available on the Web, which might not be getting the kind of traffic they deserve.

Google is already facing antitrust inquiries by the European Commission on similar grounds questioning the basis of the company’s dominance.

FTC’s Antitrust Inquiry

The broad principle for establishing a company’s monopoly status is the particular company’s control of 70% of the related competitive market. The establishment of such a monopoly status is necessary for an antitrust inquiry to be processed against the company.

With statistics research firm eMarketer estimating that Google is likely to control 75.9 percent of U.S. search advertising revenue this year, this instance, of the U.S Government questioning the business practices of what is currently one of America’s the biggest companies to determine whether Google is hurting consumer interest or blocking out competition, is the first of its kind.

However, Singhal has reiterated that Google has always put the user first, saying that “No matter what you’re looking for – buying a movie ticket, finding the best burger nearby, or watching a royal wedding – we want to get you the information you want as quickly as possible. Sometimes the best result is a link to another website. Other times it’s a news article, sports score, stock quote, a video or a map.”

Avatar
Vrushti Mawani
Vrushti Mawani, News Editor Industry Leaders Magazine (www.industryleadersmagazine.com)

Recent Posts

Elior acquires Nestor, the single meal food delivery startup

Elior acquires Nestor, the single meal food delivery startup

Elior, the corporate catering company, has acquired the French startup Nestor for an undisclosed amount. Nestor, a Paris, France-based food delivery service, started in 2015 with a
2 days ago
Axa gears to buy office space worth €800m in European cities

Axa gears to buy office space worth €800m in European cities

Axa Investment Managers, the French fund house, is not too worried about predictions that the post-pandemic world will see more people working from home and office real estates shr
3 days ago
ShareChat raises $502 million at $2 billion valuation

ShareChat raises $502 million at $2 billion valuation

ShareChat, the Indian owner of short video app Moj, has raised $502 million in the series E round of funding, pushing its value at $2.1 billion in the market. The five-year-old com
3 days ago
Small business groups form coalition to lobby for strong antitrust laws

Small business groups form coalition to lobby for strong antitrust laws

Small merchant groups are coming together to rally for strong antitrust laws to prevent big conglomerates like Amazon from swallowing up the smaller traders and businesses. Trade g
3 days ago
Vitol’s profit soars during 2020 oil crisis

Vitol’s profit soars during 2020 oil crisis

The world’s largest independent oil trader Vitol made record profits in 2020 as the fluctuations in the global energy markets resulted in a windfall. Vitol suffered an $85 billio
4 days ago
Seadrill proposes debt write off of $4.8 billion

Seadrill proposes debt write off of $4.8 billion

Seadrill Ltd., a deepwater drilling contracting company, owned by billionaire John Fredriksen, said it is ready to write off a debt of over $4.8 billion, giving lenders a 99 perce
5 days ago