Google has agreeed to license certain patents to mobile phone rivals and stop a practice of including snippets from other websites in its search results as part of a settlement to end a 20-month investigation into the search leader’s business practices, the Federal Trade Commission said Thursday.
Google (Nasdaq: GOOG) thus avoided a potentially costly legal battle with U.S. regulators.
The company pledged to change some business practices and settling allegations it misused patents to thwart competitors in smartphone technology.
However, U.S. antitrust regulators added that they have found no evidence to claims that Google unfairly favors its own services in search results.
Google did agree to license patents deemed to be “essential” for rival mobile devices such as Apple Inc.’s iPhone, Research in Motion Ltd.’s BlackBerry and smartphones running on a Microsoft Corp.’s Windows software. Some of the patents in question came as part of Google’s $12.4 billion acquisition of device maker Motorola Mobility Holdings earlier this year.
Regulators say Google is also promising that upon request, it will exclude snippets copied from other websites in its summaries of key information, even though the company had insisted the practice is legal under the fair-use provisions of U.S. copyright law. Despite the fair-use practice, Google already had scaled back on the amount of cribbing, or “scraping,” of online content after business review site Yelp Inc. lodged one of the complaints that triggered the FTC investigation.
The FTC’s investigation focused on allegations that Google has been abusing its dominance in Internet search.
Google’s rivals, including Microsoft Corp., say the search company has been highlighting its own services on its influential results page while burying the links to competing sites. Google Inc. has fiercely defended its right to recommend the websites that it believes are the most relevant. The FTC said it saw no evidence of wrongdoing in those recommendations.
The decision comes despite a last-second call from Microsoft (Nasdaq: MSFT) calling for action against Google.
As part of its voluntary concessions, Google will make changes in the way it uses content from other websites and allow advertisers to export data to other platforms, the people said.
The expected FTC decision was drawing criticism from Google opponents, including the FairSearch.org coalition, an alliance that includes Microsoft and Expedia.
“If the FTC fails to take decisive action to end Google’s anti-competitive practices, and locks itself out of any remedies to Google’s conduct that are offered in Europe later this month, the FTC will have acted prematurely and failed in its mission of protecting America’s consumers,” according to a FairSearch.org blogpost published yesterday.
Microsoft laid out its arguments in a blog post Wednesday by Dave Heiner, the software maker’s deputy general counsel.
“We continue to be dogged by an issue we had hoped would be resolved by now: Google continues to prevent Microsoft from offering consumers a fully featured YouTube app for the Windows Phone,” Heiner wrote.
Heiner mostly rehashed familiar ground while depicting Google as a company that has abused its dominance of Internet search and leadership in online video to thwart its rivals to the detriment of consumers.
“Two years ago, Microsoft applauded the U.S. Federal Trade Commission and the European Commission when they opened their antitrust investigations into Google’s business practices. We believed then, as we do now, that the future of competition in search is at stake in these investigations,” he wrote.
“This is important not just for Microsoft, but for the thousands of smaller companies whose businesses depend on a competitive search marketplace. That is why so many companies have made their concerns about Google’s misconduct known to regulators on both sides of the Atlantic.”
(The AP and Bloomberg contributed to this report.)
