Google investigation: Is it abusing its dominance?
Google investigation will focus on search results and advertising. Federal Trade Commission's launch of Google investigation could parallel federal probe of Microsoft in the 1990s.
SAN FRANCISCO – Google may be entering a make-or-break phase in its colorful history now that U.S. regulators have opened an investigation into whether the company has been abusing its dominance of Internet search and advertising to stifle competition.Skip to next paragraph
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The probe by the Federal Trade Commission, confirmed by the company Friday, will require Google to convince regulators that its closely guarded recipe for search results is designed to give people the best recommendations, not bury links to its rivals.
If you search for a local business, for example, Google might highlight its own listing, from a service calledGoogle Places, instead of one on Yelp, a popular review site and Google competitor.
Requests for directions may turn up Google Maps, and queries for a video might point to the company's own site, YouTube. Or if you type "mortgage" in Google's main search box, the top ad might be for Google Advisor, which lists the lowest interest rates.
The Google investigation also is expected to peer into Google's financial engine: the advertising links tied to the subject of each search request. Some of these commercial messages appear, shaded in color, at the top of the results page, while others are stacked in the right-hand column.
Even as Google has expanded into video, mobile phones and television, the text advertising that pops up alongside search results and other Web content generates most of Google's revenue — an amount expected to exceed $35 billion this year.
Some websites contend Google has rigged its system in a way that drives up the ad prices, even thoughGoogle says the rate is determined by bids submitted in an auction. Others say Google purposely blocks their ads from appearing because the company views them as competitive threats.
The FTC is following the lead of European regulators, who launched a similar investigation last November. The Texas attorney general has been looking into Google's business practices, too
The search engines for Microsoft and Yahoo also sometimes feature their own services in search results. The big difference: Google processes about two-thirds of all search requests in the U.S. and handles an even larger volume of advertising. Microsoft's Bing and Yahoo combined have less than 30 percent of the market.
Danny Sullivan, who follows the industry closely as editor-in-chief of the trade journal Search Engine Land, said that what Google is doing is not unlike a newspaper running an ad to promote one of its products.
"From what I have seen so far," he says, "Google doesn't seem to be doing anything wrong."