US Consumer Watchdog demands FTC break Google up

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The US Consumer Watchdog has filed a complaint with the US Federal Trade Commission demanding Google be largely dismantled, to prevent the company from abusing its monopoly position.

Noting ”Google hardly blinked when it paid half a billion dollars to the United States to settle an illegal drug sales case” and that “the proposed $22.5 million fine for violating the “Buzz” Consent Decree is but pocket change for the Internet giant” the WatchDog proposes the $40 billion per year company needed a much tougher remedy to reign it in.

The Consumer Watchdog proposed the following treatment:

  • Google should be required to divest Motorola Mobility, whose standards essential patents it is using unfairly by not making them available for license on a fair basis.
  • Google should be broken into different companies devoted to different lines of business so there is no incentive to unfairly use search to promote other services. Search could be separated from advertising. Gmail and the relatively new social networking service, Google +, could be spun off as a separate entity, as could YouTube, a Google acquisition that should have been denied at the time of merger. Enterprise applications could be another separate business.
  • Google’s search services should be separated from services where Google provides its own content.
  • Google’s search engine’s importance as a gateway to Internet requires a maximum degree of openness and transparency. Google’s monopoly position and importance to the Internet means that the company should be closely regulated like a public utility. Regulations should be designed to open up Google’s ad platform to enable other competitors to compete. Rules should be crafted to create greater transparency in the operation of Google’s ad platform to enable parties to negotiate more effectively. For example: Providing greater visibility into the maximum amount of the highest bid, how many search terms are shown per page, and how Google’s “quality score” is derived and applied. Little, if any, of this information is currently public and openness would contribute to consumer choice and options as well as foster competition.
  • Google should be forced to disgorge its monopolistic gains through the imposition of substantial financial penalties. Your change in policy regarding disgorgement over the summer was a welcome step and we urge you to apply it in this case. The payment would have to be significant enough to impact Google’s future behavior.

The letter concludes:

The Federal Trade Commission’s role in keeping Google’s abuses in check is essential. The Internet is too important to allow an unregulated monopolist to dominate it. We call on you to take the steps necessary to prevent it: File a formal antitrust complaint against Google and go to trial in Federal District Court in Washington, DC. If the Commission opts to settle the case the consent agreement must require Google to admit wrongdoing and be strong enough to change Google’s behavior and protect consumers from harm as outlined above in the proposed remedies.

Read the full letter (PDF) here.

It seems Google is rapidly running out of friends, and are under increasing pressure for regulation both in US and abroad. How long before the company is as hamstrung by regulators as Microsoft was for most of the 2000’s?

Via Techsavvy

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  • J A

    Just what I and millions others have been clamoring for.

  • redtidal

    Highly doubt it will happen.

    Didn’t DoJ tried to break Microsoft up too? In the end, MS made concession and kept it all together.

    I think Google will probably do the same.

    The real way to change a corp behavior is to set outrageously big fines, in tens of Billion dollars. Don’t we have a deficit problem?

    • J A

      But MS is a much better company for it; they do not behave the way Google evilly does today.

      • Bugbog

        Exactly. And I’m of the opinion that Microsoft’s behaviour came about as a result of the times, for which they’ve learnt their lesson.

        Google, however, seems to have taken Microsoft’s past bad behaviour as a template, and set about to be as bad as possible, for as long as they can get away with!

  • http://twitter.com/felix872 Felix il Gattaccio

    everybody’s focus on the Browser choice on Windows and forgot this is the time where Adroid and iOS have largely surpassed MS in mobile. Want to know what we are waiting to ask same to Google and Apple.

    • Joe_HTH

      True, but Microsoft is in the position they are in because they sat on their ass while Apple and Google came in and made smart phones that ate their lunch.

      • Bugbog

        Partly. But also because they couldn’t leverage any of their other products with one another. But, as can be seen from Win8, the difference in leveraged products is quite compelling.

        Whilst Microsoft survived its own “ghetto-ization”, I fear Google, if momentum builds on this petition, will not. As it is highly dependant on leveraging non-profitable services for the exclusive purpose of supporting its profitable departments.

        As is said “those who fail learn from history, are doomed to repeat it”, in this case another Anti-trust charge. But where Microsoft managed to survive (barely), I’m of the opinion that Google is going to learn the Hard way what such a failure entails!

      • grs_dev

        It’s easy to “innovate” in a space where you have practically 0 (ZERO) risk. Apple scraped its entire OS strategy and started over in 1996. Android was a proof of concept that turned into uncontrollable weed.
        No revenue attached to these platforms, ecosystems, products at first. Then consumerism kicked in.

  • The__Truth__Hurts

    I agree 100% with Google. The whole patent system is F*&^ed up.

    You don’t have the patents? They complain that you are “copying” everyone.
    You have the patents? They complain that you are being a troll.

    What? You have Anti-trust going on here and FTC investigations/etc….. But when you have companies coming together (like Apple and Microsoft and others) to outbid other particular companies to get a bundle of patents, that is suddenly not being invested….?

    Then you have a company that “legally” owns a patent on a rectangle and then goes suing everyone, yet no Anti-trust/FTC/government is looking into that…?

    But I guess if you are paying the right person the right amount, you can get it your way, regardless of how F*&^ed up your thing is.

    • SCOOBY_666UK

      1 – “I agree 100% with Google. The whole patent system is F*&^ed up.”

      TRUE if you don’t believe in playing by the same rules as the rest.

      2 – You don’t have the patents? They complain that you are “copying” everyone.
      You have the patents? They complain that you are being a troll.

      There is a difference in STANDARD Essential Patents and the NON-Essential Patents that the rest use.

      3 – What? You have Anti-trust going on here and FTC investigations/etc….. But when you have companies coming together (like Apple and Microsoft and others) to outbid other particular companies to get a bundle of patents, that is suddenly not being invested….?

      Google were asked to join… but instead they decided to have fun and put stupid bids in on their own.

      4 – Then you have a company that “legally” owns a patent on a rectangle and then goes suing everyone, yet no Anti-trust/FTC/government is looking into that…?

      I agree – But I don’t agree when Samsung specifically asked their designers to copy the iphone… and try and make changes where possible.

      5 – But I guess if you are paying the right person the right amount, you can get it your way, regardless of how F*&^ed up your thing is.
      Google has known to be spending tens of million doallars more than the rest combined in lobbying… so I don’t get ur point.
      BTW… don’t take my word for the info above… just google it ;)

    • grs_dev

      You clearly haven’t gotten a clue.

      “Microsoft, Apple, and others” as you called them actually asked Google to join the consortium, which had they chosen to do so they would have benefited along with everyone else. Google chose not to play nice with the others and ultimately lost a bidding war that they very much stayed in towards the very end.
      Please get your facts straight before you pollute the airwaves with your horse shit…

  • http://mr-frisky.myopenid.com/ mr_frisky

    “Google should be required to divest Motorola Mobility, whose standards essential patents it is using unfairly by not making them available for license on a fair basis.”

    Has this been proven in a court of law ???