Reports

Editor’s Note:  Our Readers are encouraged to post their comments in the space provided below or in Public Discussion Forum to the right of this page.  CRE will review the comments and submit a report to the FTC and publish on this website.

 

Calls for enforcement actions are premature until which time regulatory agencies specify the norms to be used in judging unfair practices for web based firms, see the CRE petition to the same.

 

In addition as CRE sets forth in the aforementioned petition, antitrust enforcement actions taken in two-sided markets, which are the markets in which web based firms  such as Google, Facebook and Twitter operate, without a deliberate recognition of their unique properties will cause more problems than they solve.

 

The FairSearch report is of particular significance because it is the basis for a request that the State Attorney Generals become involved in the investigation of Google.

 

WebPronews

 

The FairSearch Coalition has sent a 44-pager paper, entitled, “Google’s Transformation From Gateway To Gatekeeper: How Google’s Exclusionary And Anticompetitive Conduct Restricts Innovation And Deceives Consumers,” to all 50 U.S. Attorneys General.

 

“The paper offers in the greatest detail yet the coalition’s concerns that Google’s business practices that threaten competition and the free markets, deceive consumers, and threaten further innovation and economic growth and new jobs from the technology sector,” a representative for the coalition tells WebProNews.

 

“The Attorneys General play an important role in the ongoing antitrust investigations of Google’s business, with Texas, California, Ohio and New York having opened full-scale investigations, and reports that Mississippi and Oklahoma are considering following suit,” he adds.

 

The U.S. Federal Trade Commission, Korean Fair Trade Commission, and European Commission also have open investigations of Google’s business.

 

A letter from Patrick Lynch, who is an advisor to FairSearch, and former president of the National Association of Attorneys General (and former AG of Rhode Island), introduces the paper. Here’s the full text of that letter:

 

Letter from Patrick Lynch to Attorneys General
 

In the last year, the U.S. Federal Trade Commission launched an antitrust investigation into serious allegations that Google is engaging in a pattern of business practices that deceive consumers and stifle competition and innovation in the Internet ecosystem, and it has been reported that the Attorneys General of Texas, California, Ohio, and New York are participating in the investigation as well. Additionally, the U.S. Department of Justice recently issued rare “second requests” for more information in its antitrust reviews of Google’s proposed acquisitions of AdMeld and Motorola Mobility.  The DOJ also recently settled a criminal investigation of what it called the “unsafe, unlawful, importation of prescription drugs by Canadian on-line pharmacies, with Google’s knowledge and assistance, into the United States, directly to U.S. consumers,” resulting in an unprecedented $500 million forfeiture by Google.  And on September 21st, a bipartisan panel of the U.S. Senate Subcommittee on Antitrust, Competition Policy, and Consumer Rights held a hearing entitled “The Power of Google: Serving Consumers or Threatening Competition?” led by Chairman Herb Kohl (D-WI) and Ranking Member Mike Lee (R-UT).
 

In other words, evidence is mounting that Google’s business practices deserve further investigation from law enforcement and antitrust officials and that the time to act to protect competition, innovation, and consumers is now.
 

I have briefed many of you personally, and many of you were present for the panels earlier this year at the NAAG and CWAG meetings which examined these issues.  In light of the high degree of interest from you and your colleagues, I have asked FairSearch.org, the coalition of Internet companies I represent, to prepare the attached white paper that lays out Google’s anticompetitive acts in great detail.  There are five specific areas of concern dealt with in this white paper:
 

–          Deceptive display: Steering users toward its own products by displaying them at the top or in the middle of the results page in ways that suggest to consumers that they are natural search results, rather than links to Google sites in which Google has a direct economic interest.
 

–          Search manipulation: Manipulating its search algorithm to exclude or penalize competing sites, effectively “disappearing” them from the Internet.
 

–          Unauthorized content scraping: Stealing content developed by other websites, such as user reviews, without permission and displaying that content on its own pages, sometimes even without attribution.
 

–          Unfair treatment of advertisers: Manipulating advertisers’ quality scores to inflate ad prices and placing restrictions on its “must buy” ad platform that inhibit customers from using competing platforms.
 

–          Exclusionary conduct in mobile: Buying up companies in the mobile search area that present a nascent competitive threat, and imposing exclusivity restrictions in its Android licensing agreements to maintain and expand its dominance.
 

I believe that if you look at the evidence presented, you will come to the same conclusion that your colleagues and the federal competition authorities have.  The time to simply take Google at face value when it says “trust us” is long past.  State Attorneys General have a critical role to play in investigating Google’s conduct to prevent further harm to competition and consumers, and many of you are already deeply involved.  I encourage each of you to examine the attached white paper closely, speak with your colleagues who are actively investigating Google’s conduct, and consider standing with them in protecting consumers and competitive markets by opening your own investigation.
 

As always, I am available to speak with you further or to arrange a briefing from FairSearch.org if you or your staff have any questions. 
 

Please contact me with any questions.
 

Sincerely,

 

Patrick C. Lynch
Former Attorney General of Rhode Island
One Park Row, 5th Flr.
Providence, RI 02903

The lengthy paper can be found here in PDF format.