US drops competition inquiry into Google

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US drops competition inquiry into Google

US regulators have closed a long-running investigation into allegations that Google tweaks search results to hurt rival companies without finding any wrongdoing, a decision that disappointed rivals and critics of the Web search giant.

The Federal Trade Commission did, however, win promises from Google that it would end the practice of "scraping" reviews and other data from rivals' websites for its own products, and to allow advertisers to export data to independently evaluate advertising campaigns, the FTC said on Thursday.

Google also agreed to no longer request sales bans when suing companies which infringe on patents that are essential to ensuring interoperability, also known as standard essential patents.

But the FTC declined to pursue Google on the subject of search bias. Smaller companies have accused Google of putting its own products high up in results for lucrative searches like "hotels" and giving competitors a lower ranking so customers cannot find them.

At a press conference, FTC Chairman Jon Leibowitz, anticipating criticism, noted that the agency had looked hard at the issue. "Even though people would like us to bring a big search bias case, the facts aren't there," Leibowitz said.

The commission voted 4 to 1 to settle the patent investigation into Google's injunction requests. It voted 5 to 0 to end the probe of Google's search practices.

The FTC broke with its usual practice of requiring a consent decree to settle an investigation. Instead it allowed Google to write a letter pledging to implement the agreed-upon changes in the search portion of the probe.

That prompted some sharp questions about whether Google would live up to its pact.

"I have no reason to think that Google won't honour their commitment; I think they will," said Leibowitz, noting financial penalties if Google failed to do so.

Leibowitz said that the commission had scoured through some nine million pages of documents and taken sworn testimony from key Google executives on the way to resolving its investigation in a "sensible" fashion.

"This was an incredibly thorough and careful investigation by the commission, and the outcome is a strong and enforceable set of agreements," he said.

Google's David Drummond, the company's chief legal officer, said the FTC announcement on Thursday meant that "Google's services are good for users and good for competition.

"We head into 2013 excited about our ability to innovate for the benefit of users everywhere," Drummond wrote in a blog post.

Yelp, which operates the social networking/user review website, had complained about scraped reviews, and said it was disappointed with the result of the FTC probe.

"The closure of the commission's investigation into search bias by Google without action ... represents a missed opportunity to protect innovation in the Internet economy," wrote Yelp spokesman Vince Sollitto in an email. "We look for the regulatory bodies continuing their investigation to have greater success."

Some of Google's critics, anticipating a weak conclusion to the FTC's investigation, said in December that they may be ready to take their grievances to the Justice Department.

(Additional reporting by Edwin Chan; editing by Ros Krasny, John Wallace and Nick Zieminski).

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