TR Daily Hatch Urges FTC to Probe Google’s Search, Ad Conduct
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Thursday, August 30, 2018

Hatch Urges FTC to Probe Google’s Search, Ad Conduct

Sen. Orrin Hatch (R., Utah), a high-ranking member and former chairman of the Senate Judiciary Committee and also the chairman of the Senate Republican High-Tech Task Force, today urged the Federal Trade Commission to look at “the competitive effects of Google’s conduct in search and digital advertising,” an area in which there have been “important developments” since the FTC concluded a similar investigation in 2013 without taking enforcement action, he said.

In a letter to FTC Chairman Joseph Simons dated today, Sen. Hatch noted that Chairman Simons and “an entire new slate of FTC commissioners have been recently confirmed. During the confirmation hearing, you and several other commissioners expressed support for creating a program to look back at previous decisions on mergers and whether those choices had been effective. In light of all of these changes, I respectfully request that the FTC consider the competitive effects of Google’s conduct in search and digital advertising.”

During his Senate confirmation hearing before the Judiciary Committee earlier this year, Mr. Simons responded to a question about his views of technology firms such as Facebook, Inc., and Google and potential antitrust behavior in that sector by saying, “Big is not necessarily bad. Oftentimes companies get big because they are successful with the consumer and we don’t want to interfere with that. But sometimes companies can use anti-trust actions to stay big and then we need to step in” (TR Daily, Feb. 14).

During an FTC oversight hearing before the House Energy and Commerce Committee’s digital commerce and consumer protection subcommittee last month, Chairman Simons said that his agency has the authority needed to determine whether app-bundling imposed by Google on smartphone manufacturers is anticompetitive.

He was responding to a question from subcommittee ranking minority member Jan Schakowsky (D., Ill.) about a $5 billion fine on Google announced by European Competition Commissioner Margrethe Vestager a day earlier. He said that the FTC would “be looking closely at what they do,” adding that he had spoken with Commissioner Vestager about the matter (TR Daily, July 18).

Another development that Sen. Hatch cited in his letter was a March 2015 “Wall Street Journal” report that “revealed some details of an FTC Bureau of Competition staff report from August 2012 (before the then-Commissioners of the FTC concluded the investigation into Google). That staff report recommended that the FTC pursue an antitrust action against Google because of some of its search practices. The report found that it was a ‘close question’ as to whether Google violated Section 2 of the Sherman Act by ‘preferencing’ its own ‘vertical content over that of rivals, while simultaneously demoting rival vertical websites.’ Ultimately, the staff recommended against pursuing a complaint on that point. The report did, however, recommend action against Google on other issues that the report found to be anticompetitive. Google resolved the issue by promising in a December 27, 2012 letter that it would take certain actions for five years to address those concerns. That time period has now passed.”

Sen. Hatch added, “Following the Wall Street Journal’s reporting, Utah Attorney General Sean Reyes and DC Attorney General Karl Racine asked the FTC to consider opening an investigation into Google’s behavior in late January 2016. Then, in March 2016, I raised my concerns with then-FTC Chairwoman Edith Ramirez during a Senate Judiciary Antitrust Subcommittee hearing. Among my concerns was that some studies have concluded that rather than benefiting the consumers, as the FTC found might happen back in 2013, some of the changes Google made to its search page have actually harmed consumers. Although Chairwoman Ramirez indicated that she was aware of these concerns, she declined to comment further on any specific actions by the FTC since closing the investigation. There have also likely been other important changes to the market in the five years since the close of the FTC’s investigation, including the shift to mobile platforms.”

Sen. Hatch’s request follows recent calls from Rep. Keith Ellison (D., Minn.) for an FTC investigation of antitrust implications of Google’s search conduct (TR Daily, June 4); from Sens. Richard Blumenthal (D., Conn.) and Ed Markey (D., Mass.) for the FCC to look into Google’s collection of location data as a possible deceptive business practice; and from public interest and consumer groups for an FTC probe of privacy “steering” practices by Google and Facebook (TR Daily, June 27). —Lynn Stanton, [email protected]

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