United States and European Union Closing In on Google: Settlement or Antitrust Charges?

Regulators from both the United States and the European Union (EU) are wrapping up extensive antitrust investigations of online advertising giant Google. The only question now is whether Google settles these cases or is formally charged with abusing its market power.

Actually, there is a third possibility, at least in the United States: It could avoid charges all together. The US Federal Trade Commission (FTC) this week was said to be closing in on a decision about whether to even charge Google with antitrust violations.

According to multiple reports, the FTC is considering “punting” the case and seeking only limited behavior changes from Google. But this opens the possibility of a further-reaching US Department of Justice (DOJ) investigation of Google’s activities. Such a change would mirror the US government’s handling of Microsoft in the mid-to-late 1990s.

Although the US and EU investigations of Google are separate, they also cover some of the same ground: whether Google is abusing its dominance in Internet search to harm competitors by favoring its own services. Despite a well-rounded product portfolio, virtually all of Google’s profits and revenues come from a single source: ad sales tied to Internet search results. Antitrust regulators believe that Google has a monopoly or near-monopoly, depending on the market, and that the firm is illegally protecting this monopoly by harming competition.

“We have very good relations with the competition authorities in the United States,” EU Competition Commissioner Joaquin Almunia said during a news conference on Wednesday, noting that the two agencies are in touch. “We are working in very good coordination.”

Almunia also provided an update on the EU’s investigation, which will end in a settlement or formal charges. “We are in the process of conversation with Google to try to reach a settlement, but we are not there yet,” he said. “One day, I don't know when, I will come here to tell you how these conversations have been concluded.”

On the road in South Korea this week, Google Chairman Eric Schmidt was asked about the firm’s worldwide antitrust woes.

“We have been in quite continuous communications with both the Europeans and the Federal Trade Commission,” he told The Wall Street Journal. “It’s time for them to sort of move to one resolution or another. It’s not like they don't have a million documents and so forth. I remain optimistic.”

See also "Google Nears Settlement in Sweeping EU Antitrust Case" and "EU to Google: Settle or Be Charged with Antitrust Violations."

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