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FTC Prepares to Subpoena Google in Antitrust Investigation [UPDATED]

The Wall Street Journal is reporting that the Federal Trade Commission is preparing to serve subpoena papers to search giant Google and begin a federal anitrust probe into the company. If the probe goes forward, this could be Google’s biggest legal challenge to date.

The investigation is expected to center around Google’s promotional search and advertising practices. Services like Kayak and Microsoft say that Google holds their sites to a higher standard for search position than Google’s own pages, routing users to Google’s own products unfairly. Google maintains that it has done nothing wrong, and that it simply provides the best search results regardless of their source. The WSJ points out that while it is not illegal in the US to operate a monopoly, companies can be prosecuted for abusing or  illegally obtaining one.

Updates follow below.

It’s worth noting that some of the companies complaining about Google’s practices could have their own interests at heart. Microsoft, for instance, has been struggling to grow its Bing search engine since its launch. From the WSJ:

Google has also suggested that many of the complaints about its behavior have been orchestrated by Microsoft, which in April filed its own antitrust complaint against Google with European authorities. Microsoft has said it isn’t behind others companies’ actions, but merely helps direct them to the proper authorities.

Though the probe could end up yielding no charges against Google, the investigation alone could make it difficult for the company to focus on its core business. Furthermore, a federal investigation is likely to tarnish the company’s reputation, which has taken several blows in the wake of the Google Buzz fiasco and a growing sense among some users that the company has access to too much information.

Beyond the FTC’s forthcoming investigation, Google faces other legal challenges from several sources including the EU and several U.S. state governments. It’s a safe bet that, no matter what, Google will be spending an awful lot on lawyers in the coming years.

UPDATE: Google has announced via their blog that they have been contacted by the FTC, and that they will be cooperating fully with the investigation. Additionally, they write extensively about their core values and their commitment to openness. From their post:

Because of the many choices available to you, we work constantly on making search better, and will continue to follow the principles that have guided us from the beginning:

  • Do what’s best for the user. We make hundreds of changes to our algorithms every year to improve your search experience. Not every website can come out at the top of the page, or even appear on the first page of our search results.
  • Provide the most relevant answers as quickly as possible. Today, when you type “weather in Chicago” or “how many feet in a mile” into our search box, you get the answers directly—often before you hit “enter”. And we’re always trying to figure out new ways to answer even more complicated questions just as clearly and quickly. Advertisements offer useful information, too, which is why we also work hard to ensure that our ads are relevant to you.
  • Label advertisements clearly. Google always distinguishes advertisements from our organic search results. As we experiment with new ad formats and new types of content, we will continue to be transparent about what is an ad and what isn’t.
  • Be transparent. We share more information about how our rankings work than any other search engine, through our Webmaster Central site, blog, diagnostic tools, support forum, and YouTube. We also give advertisers detailed information about the ad auction and tips to improve their ad quality scores. We’ve recently introduced even more transparency tools, announcing a major change to our algorithm, providing more notice when a website is demoted due to spam violations, and giving advertisers new information about ads that break our rules.
  • Loyalty, not lock-in. We firmly believe you control your data, so we have a team of engineers whose only goal is to help you take your information with you. We want you to stay with us because we’re innovating and making our products better—not because you’re locked in.

(via WSJ, updated from Google’s Blog via TechCrunch)

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