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FTC Denies Report That Agency Ignored Staff Recommendation on Google

The controversy has provided new ammo for Google rivals seeking E.U. action.

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Three Federal Trade Commission members denied media reports that the agency essentially ignored a staff recommendation to sue Google during its 2012 investigation of the search giant’s practices.

In a blog post, the commissioners said that “contrary to recent press reports, the commission’s decision on the search allegations was in accord with the recommendations of the FTC’s Bureau of Competition, Bureau of Economics, and Office of General Counsel.”

“Some of the FTC’s staff attorneys on the search investigation raised concerns about several other Google practices,” the commissioners continued. “In response, the commission obtained commitments from Google regarding certain of those practices. Over the last two years, Google has abided by those commitments.”

The statement was signed by Chairwoman Edith Ramirez, Commissioner Julie Brill and Commissioner Maureen Ohlhausen. The two other FTC commissioners, Joshua Wright and Terrell McSweeny, didn’t sign the statement since they weren’t at the agency when it was conducting the Google investigation.

The agency has been under fire since last week, when the Wall Street Journal published excerpts from a previously unseen internal FTC report that recommended the agency sue Google for anticompetitive behaviors like “scraping” content from other sites or restricting advertisers from running campaigns on rival sites. The agency ultimately didn’t sue Google, although the company was required to change some of its practices under a settlement agreement.

It was pretty well reported at the time that FTC attorneys hadn’t found enough evidence of “search bias” to bring a case against Google at the time, but the newly released report did offer some interesting details about the internal deliberations.

Notably, the report suggested that the staff found the evidence inconclusive as to whether Google was showing bias toward its own products in search results, including travel and local sites, compared to rivals. That was the main focus of the 2012 investigation and has been a subject of continued interest among European antitrust officials, who are still investigating Google.

Release of the report has given Google rivals such as Yelp and Microsoft new ammo in their continuing effort to get European antitrust officials to take action against the search giant. That effort has essentially been on hold for the past six months as new competition chief Margrethe Vestager decides how to proceed on the case.

“The report confirms the ongoing consumer harm that and other interested parties have long warned about, and debunks Google’s repeated claim that the FTC found no evidence of wrongdoing or harm once and for all,” said Matt Reilly, a former FTC official who now represents FairSearch, a group of Google rivals — including Microsoft, Nokia, Oracle and Expedia — who are pushing antitrust officials to act.

The Journal got a portion of the 160-page staff report by mistake after the FTC released parts of it in response to a Freedom of Information Act request. The agency refused to give the paper the rest of the report. An FTC spokesman Wednesday declined to comment when asked if the agency will release the entire staff report, now that the Journal has released the portions it received.

“Based on a comprehensive review of the voluminous record and extensive internal analysis, of which the inadvertently disclosed memo is only a fraction, all five commissioners (three Democrats and two Republicans) agreed that there was no legal basis for action with respect to the main focus of the investigation — search,” the commissioners wrote. “As we stated when the investigation was closed, the commission concluded that Google’s search practices were not, ‘on balance, demonstrably anticompetitive.’”

The FTC officials also disputed a Wednesday report in the Wall Street Journal that hinted Google had used its influence at the White House to shut down the FTC’s investigation, laying out a timeline of Google meetings at the White House and important milestones in the FTC’s review.

The story “makes a number of misleading inferences and suggestions about the integrity of the FTC’s investigation,” the FTC commissioners wrote. “The article suggests that a series of disparate and unrelated meetings involving FTC officials and executive branch officials or Google representatives somehow affected the commission’s decision to close the search investigation in early 2013. Not a single fact is offered to substantiate this misleading narrative.”

“The Wall Street Journal’s article about Google Inc.’s meetings with top White House and Federal Trade Commission officials was careful, accurate and fair,” a spokeswoman for the newspaper said in an emailed statement. “We stand by the reporting and reject any suggestion that the article was misleading.”

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