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FTC and Justice Department mull Google antitrust probe
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By Diane Bartz
WASHINGTON (Reuters) - U.S. antitrust regulators may investigate Google Inc's dominance of the Web search industry, and will settle on the agency to launch a probe once scrutiny into the company's plan to buy ITA software is done, a...
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People walk past a logo next to the main entrance of the Google building in Zurich March 9, 2011.
Credit: Reuters/Arnd Wiegmann
By Diane Bartz
WASHINGTON |
Wed Apr 6, 2011 7:07am EDT
WASHINGTON (Reuters) - U.S. antitrust regulators may investigate Google Inc's dominance of the Web search industry, and will settle on the agency to launch a probe once scrutiny into the company's plan to buy ITA software is done, a source told Reuters on Tuesday.
The Federal Trade Commission and Justice Department will decide which has more expertise and whether to launch a formal investigation once the latter wraps up the ITA probe, the source said.
"They're waiting for ITA to pop," said the source, who spoke anonymously to preserve business relationships.
Shares of Google fell more than 3.2 percent on Tuesday, following a Bloomberg report that the FTC is considering an antitrust investigation.
The FTC and Justice Department declined to comment.
Google's proposed acquisition of ITA for $700 million has sparked worries in the tech world that travel websites such as Orbitz Worldwide Inc, Kayak and TripAdvisor could be deprived of ITA's software. Google announced plans to acquire ITA Software for $700 million in cash in July.
A potential U.S. probe, which would come on top of an ongoing European antitrust investigation, underscores the increasing non-operational risks that Google is facing, said BGC Partners analyst Colin Gillis.
"Google is definitely in the regulatory crosshairs," he said.
News of the possible probe comes a day after Google co-founder Larry Page officially took the reins as CEO after a decade under Eric Schmidt. Schmidt is now executive chairman and will focus on government relations, among other duties.
The Internet giant has been under investigation by the European Commission since last November.
Last week rival Microsoft Corp filed a formal complaint with European antitrust regulators, claiming that Google systematically thwarts Internet search competition.
There have been a series of complaints made to regulators, many from Google rivals which specialize in vertical searches like price comparison websites, which are widely seen as a threat to Google's position as a key gateway to online information.
Several of these have complained to U.S. and European antitrust authorities that Google is seeking to hurt their business by making them hard to find in Google searches, said Gary Reback, who represents several of these companies.
"They're (the Google rivals) all being penalized to some extent to another," he said.
"Since competition is one click away on the Internet, we work hard to put our users' interests first and give them the best, most relevant answers to their queries -- whether it's a web page, news article, image, or map," said Adam Kovacevich, a spokesman from Google.
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