Why the US Government Almost Sued Google in 2012
Jens Meyer/AP File Photo
FTC investigated the company over its anticompetitive tactics, including allegations it boosted the search rankings of its own properties over that of competitors.
The US government almost sued Google in 2012 over its anticompetitive tactics, including allegations it boosted the search rankings of its own properties over that of competitors. Ultimately, the Federal Trade Commission decided to close its investigation after the company—which attracts 64% of all search traffic in the US, according to comScore—agreed to alter some of its practices.
An FTC report, which was reviewed by the Wall Street Journal, focused on four major issues that the agency says “has resulted—and will result—in real harm to consumer and to innovation in the online search and advertising markets”:
- Ranking Google’s own properties above rivals: The FTC noted that Google “adopted a strategy of demoting, or refusing to display, links to certain vertical websites in highly commercial categories,” and instead favored its own properties.
- Threats to remove sites from its search results: Google reportedly scraped content illegally from sites including Yelp, TripAdvisor, and Amazon. When these companies complained, Google wielded its power, allegedly lobbing threats that it would remove their links from its search engine. Google now lets websites opt out, so their content is not included in special search results, without affecting their rankings.
- Restrictions on advertisers: The company reportedly did not let advertisers use data derived from Google ad campaigns to run ads on other sites. CEO Larry Page insisted on the limitations, according to the report, which noted the policy was changed in 2013 after discussions with the FTC.
- Restrictions on websites that publish search results: The report also said that Google imposed contract restrictions on websites that publish its search results from working with competing search engines, such as Microsoft and Yahoo.
Many of these themes have been raised before. In particular, the European Commission highlighted the first three issues in an ongoing, four-year antitrust probe into Google.
Quartz has reached out to the FTC and will update this post as warranted.
Update: Here is the full text of the statement Google issued about the report.
After an exhaustive 19-month review, covering nine million pages of documents and many hours of testimony, the FTC staff and all five FTC Commissioners agreed that there was no need to take action on how we rank and display search results. Speculation about potential consumer and competitor harm turned out to be entirely wrong. Since the investigation closed two years ago, the ways people access information online have increased dramatically, giving consumers more choice than ever before. And our competitors are thriving. For example, Yelp calls itself the “de facto local search engine” and has seen revenue growth of over 350% in the last 4 years, TripAdvisor claims to be the web’s “largest travel brand” and has nearly doubled its revenues in the last 4 years.