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Google Once Again In Hot Water With FTC Over Ad Practices

May 24, 2013
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Peter Suciu for redOrbit.com — Your Universe Online

Google could find itself once again under the microscope of the US Federal Trade Commission (FTC), Bloomberg reported on Friday. The search company is facing a new anti-trust probe that could look into whether the company is once again using its leadership position in the online display-advertising market to illegally block competition.

This is, of course, not Google´s first run-in with the FTC, and much of the concerns continue to revolve around Google´s purchase of DoubleClick, which had been a significant player in the display-ad market.

Google purchased the ad-network for $3.1 billion in 2007, and at the time the FTC had expressed concern that Google could dominate competition with a monopoly of the online advertising business since the search-engine giant already owned AdSense. The FTC noted at the time that there was the risk of “tying” customers to more than one of a company´s products — a practice that remains illegal. Since that time Google has remained squarely in the FTC´s sights.

Last August Google was ordered to pay $22.5 million to settle FTC charges that it misrepresented privacy assurances to users of Apple´s Safari Internet browser. In January of this year, the search company promised to change its business practices to resolve FTC competition concerns in the mobile market while the landmark agreement gave advertisers more flexibility to use rival search engines.

This latest inquiry is now in the preliminary stages and may or may not expand into a larger probe. Reports suggest that FTC investigators are, however, taking a closer look at whether Google is again using its position in the US display ad market to push companies to use more of its other services. This practice is currently illegal under anti-trust laws.

The display ad business is a big one, generating $17.7 billion for sale of banner ads on websites. Google, which is currently the leader in the ad market, had 15.1 percent market share in 2012 compared to Facebook´s 14.6 percent share, according to industry analysts eMarketer. The research firm had reported that Google´s search ad revenues, which were actually down in 2012, were expected to grow this year.

The overall US search ad market is expected to reach $19.8 billion in total revenue this year.

Google´s anti-trust issues are not limited to the US either. The company continues to face scrutiny around the world over its search engine practices, particularly in Europe.

Earlier this month Google found itself under fire in Europe as the search giant´s rivals contended that it had the potential to reinforce its dominance unless European Union regulators could win more concessions from the company. Google´s rivals allege that the search provider continues to restrict consumer choice and competition in the marketplace.

If Google can´t reach a settlement with the European Commission it could face a fine of up to $3.8 billion, or a maximum of its $37.9 billion global revenue from last year.

Other probes are underway in Asia and South America. South Korea´s Fair Trade Commission began deliberations earlier this month on whether the company might be involved in activities that negatively impact fair market completion, while regulators in Argentina are also scrutinizing the company.


Source: Peter Suciu for redOrbit.com – Your Universe Online



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