Google Could Have Another Wave of Legal Issues to Defend
The Wall Street Journal is reporting this morning that the U.S. Federal Trade Commission (-FTC-) will subpoena Google (NASDAQ:GOOG) in the near future as part of a probe into anti-trust activities related to the company’s dominance of the search engine market.”The five-member commission is preparing to send Google the formal demands for information within days. Other companies are also likely receive official requests for information about their dealings with Google at a later stage.”
The Federal investigation will ascertain whether or not Google is using its wide advantage over competitors in terms of search engine traffic to steer customers towards information that represents company products or products that Google has personal interests in sponsoring. The news comes on the heels of claims from competitors, namely Microsoft (NASDAQ:MSFT), that the search engine giant has been fostering anti-competitive practices in the industry.
In late March, Microsoft submitted a letter to the FTC asking that the agency investigate Google for possible anti-trust violations, lawyers for the Seattle based tech-giant alleged, “claims of anticompetitive practices by Google in search, online advertising and smartphone software.” The European Union has also made similar allegations towards Google.
Although the company has faced a number of anti-trust allegations in past years, the current FTC probe will be the first time Google (NASDAQ:GOOG) faces questioning over the ethics of its business practices. Prior inquiries have been directed towards the company’s activities in mergers and acquisitions.
“FTC investigation, by contrast, will examine fundamental issues relating to Google’s (NASDAQ:GOOG) core search advertising business, which still accounts for the overwhelming majority of its revenues. Those will include whether Google—which accounts for around two-thirds of internet searches in the U.S. and more abroad—unfairly channels users to its own growing network of services at the expense of rivals. (-WSJ)”