## Facts

- The Federal Trade Commission conducted a 19-month competition investigation into Google Inc.’s search and search-advertising practices, including allegations of “search bias.”
- The investigation included review of more than nine million pages of documents, interviews and investigational hearings of key executives, and economic analysis of search design changes and user behavior.
- Competitors alleged Google favored its own specialized (“vertical”) services in general search results by prominently displaying Google content (e.g., specialized boxes) and pushing rival links lower on the page.
- Rival vertical sites also alleged Google adjusted algorithms to demote competing vertical search engines in rankings.
- Some sites complained Google used third-party content (e.g., reviews) within Google specialized services without adequate opt-out mechanisms.
- Advertisers alleged certain AdWords API terms restricted their ability to manage campaigns across competing advertising platforms.
- The Commission concluded many challenged changes were plausibly aimed at improving search quality and user experience and were tested and modified based on user-impact metrics.

## Issues

1. Whether Google’s prominent display of its own vertical content and related ranking decisions constituted an unfair method of competition under § 5 of the FTC Act (and related antitrust principles).
2. Whether Google’s use of third-party content in specialized services and AdWords API restrictions unlawfully maintained or extended market power in search or search advertising.

## Decision

- The FTC unanimously closed the investigation as to “search bias” allegations and declined to bring an enforcement action regarding Google’s ranking and placement of its own content in general search results.
- Google provided voluntary commitments addressing two areas:
  - Third-party content: a web-based opt-out mechanism allowing sites to prevent certain crawled content from appearing on specified Google specialized pages while remaining indexed in general search results.
  - AdWords API terms: modifications to relax restrictions that were alleged to impede advertisers’ cross-platform campaign management.
- The commitments were to remain in effect for five years, and a material violation was stated to be actionable by the FTC under § 5.

## Legal Principles

- Antitrust analysis generally does not condemn product design changes or innovations that plausibly improve a product, even if competitors are disadvantaged.
- Liability requires evidence of harm to competition or consumers, not merely harm to particular competitors.
- Where conduct is plausibly justified as improving relevance or user experience and empirical evidence does not show competitive harm, an agency may decline enforcement.
- Prospective commitments may be used to address specific practices (e.g., content use and interoperability constraints) without litigating the central exclusionary-conduct theory.

## Conclusion

The FTC concluded the record supported procompetitive explanations for Google’s search design and presentation choices and did not establish harm to competition sufficient to warrant a search-bias enforcement action; it nonetheless secured time-limited commitments to improve opt-out options for third-party content used in specialized services and to loosen AdWords API restrictions affecting advertisers’ cross-platform management.


In re Google Inc., FTC File No. 111-0163 (F.T.C. Jan. 3, 2013)