The Obama-era Federal Trade Commission spent 19 months investigating Google over allegations that it violated antitrust laws by favoring its own products over rivals’ in search results. The agency ultimately voted against taking action, saying changes Google made to its search algorithm gave consumers better results and therefore didn’t unfairly harm competitors.
That conclusion underplays what the FTC’s staff found during the probe. In 312 pages of documents, the vast majority never publicly released, staffers outlined evidence that Google had taken numerous steps to ensure it would continue to dominate the market — including emerging arenas such as mobile search and targeted advertising.
This story is a part of The Google Files, a POLITICO investigation into the FTC’s 2012 antitrust probe of the burgeoning search giant.
Google made sure it was the search engine of choice for mobile carriers
FTC staff urged the agency’s five commissioners to sue Google for signing exclusive contracts with Apple and the major wireless carriers that made sure the company’s search engine came pre-installed on smartphones.
A top Google executive told investigators that the company was paying “humongous” sums as part of these deals. He bragged in internal company communications that the contracts let Google “own the U.S. market.”
But the commissioners closed that part of the probe without taking action or publicly disclosing it. Nearly eight years later, those contracts were a major part of an antitrust suit that the Justice Department and 11 states filed against Google in October 2020.
Google gave its own products the top priority in search results
Google reprogrammed its search algorithm in 2007 so that its products would occupy the top spot in search results, demoting products from rivals like Yelp, Amazon or comparison-shopping sites such as NexTag, TheFind and Shopzilla. Those demotions were so unpopular with users that Google was forced to reverse them.
The changes had a big impact: When Google adopted one algorithm change in 2011, rival sites saw significant drops in traffic. Amazon told the FTC that it saw a 35 percent drop in traffic from the comparison-shopping sites that used to send it customers.
Other tech giants urged the commission to crack down on Google
Amazon and Facebook privately complained to the FTC about Google’s conduct, saying their business suffered because of the company’s search bias, scraping of content from rival sites and restrictions on advertisers’ use of competing search engines. Excerpts from their complaints reveal that they were trying to undermine Google’s arguments even as they publicly stayed mum about the investigation.
Amazon said it was so concerned about the prospect of Google monopolizing the search advertising business that it willingly sacrificed revenue by making ad deals aimed at keeping Microsoft’s Bing and Yahoo’s search engine afloat.
The FTC staff made a series of wrong judgments about the future of technology
The FTC’s lawyers and economists argued that advertising targeted at specific users, the backbone of Google and Facebook’s revenue today, had only “limited potential for growth.”
The economists assumed that other major players like Amazon and Mozilla would thrive in the market for mobile devices, lessening the urgency of thwarting Google’s dominance.
The economists also discounted the idea that consumers were starting to use smartphones as a common means to search for information, writing that mobile made up only a small portion of the search market.
And the economists disregarded evidence from companies like Yelp and eBay that a significant amount of their traffic came from Google search results, a fact that made them vulnerable to changes in the company’s algorithms. Instead, the agency experts relied on arguably less precise data from a third-party measurement company that Google’s own executives called “unreliable.”