Google to change advertising practices but US regulators find no bias in search results

The Federal Trade Commission (FTC) said it would close an investigation into alleged "search bias" by Google after determining that "innovations" the company has introduced into the market were justified, even though rivals may have been harmed by the measures.

"Although some evidence suggested that Google was trying to eliminate competition, Google’s primary reason for changing the look and feel of its search results to highlight its own products was to improve the user experience," the FTC's chairman, Jon Leibowitz, said in a statement. "Similarly, changes to Google’s algorithm that had the effect of demoting certain competing websites had some plausible connection with improving Google’s search results, especially when competitors often tried to game Google’s algorithm in ways that benefitted those firms, but not consumers looking for the best search results."

"Tellingly, Google’s search engine rivals engaged in many of the same product design choices that Google did, suggesting that this practice benefits consumers. While not everything Google did was beneficial, on balance we did not believe that the evidence supported a FTC challenge to this aspect of Google’s business under American law," he added.

Google has agreed (3-page / 631KB PDF) to undertake a number of measures to settle claims that restrictions it placed on the terms of use of 'application programming interfaces' (APIs) for 'AdWords' unfairly impinged on competition in the search market. There had been concerns that the restrictions inhibited advertisers' ability to coordinate an ad campaign operated via AdWords with campaigns on rival platforms.

In addition Google has also promised to give website operators the option of preventing it from displaying their content on its vertical search engine results. The FTC said it had looked into claims that Google "misappropriated content, such as user reviews and star ratings, from competing websites in order to improve its own vertical offerings, such as Google Local and Google Shopping". Vertical search services are specific to particular topics.

David Drummond, Google's senior vice president and chief legal officer, said that the FTC's findings proved that "Google’s services are good for users and good for competition". However, the regulator was criticised by 'Fair Search', an organisation that represents Microsoft and a number of other rivals and critics of Google.

"The FTC’s decision to close its investigation with only voluntary commitments from Google is disappointing and premature, coming just weeks before the company is expected to make a formal and detailed proposal to resolve the four abuses of dominance identified by the European Commission, first among them biased display of its own properties in search results," FairSearch said in a statement.

"The FTC’s settlement is by no means the last word in this case, leaving the FTC without a major role in the final resolution to the investigations of Google’s anti-competitive practices by state attorneys general and the European Commission. The FTC’s inaction on the core question of search bias will only embolden Google to act more aggressively to misuse its monopoly power to harm other innovators," it added.

Google's search practices are still under scrutiny from the European Commission. Last May the Commission called on Google to propose changes to its search practices after deeming that the company had abused its dominant market position in the industry. Google is expected to make proposals to address the concerns shortly.

Google's rivals in the search market, including Microsoft and UK search engine Foundem, have urged the Commission to ensure the market becomes more competitive. Foundem published proposals in September last year which it said, if enforced, would address the alleged problem.