Department of Justice, State Attorneys General Must Press To End Search Bias

The Federal Trade Commission’s settlement with Google fails to end its most anticompetitive practice, Consumer Watchdog said today and the public interest group called on the Department of Justice and state attorneys general to press forward to end the Internet giant’s monopolistic behavior in search results.

“Google clearly skews search results to favor its own products and services while portraying the results as unbiased. That undermines competition and hurts consumers,” said John M. Simpson, director of the group’s Privacy Project. “The FTC rolled over for Google. They’ve accepted Google executives’ promises that they will change two practices without even requiring a consent agreement, but Google has a track record of broken promises. Don’t forget, this fall the FTC fined Google $22.5 million for violating its most recent consent agreement. Why would the FTC take Google at its word?”

The new Assistant Attorney General for the Department of Justice Antitrust Division, William J. Baer, should make Google’s abuse of search a top priority, Consumer Watchdog said.

The FTC’s settlement does require a consent agreement regarding so-called Standards Essential Patents held by Google’s Motorola subsidiary. Google is now required to license these patents to any company on “fair, reasonable and non-discriminatory” terms – known as FRAND terms.

“This will help ensure competition in the manufacture of smartphones and tablets,” said Simpson, “but that was never the heart of the issue. Biased search and Google’s favoring its own properties do real consumer harm. Google is the gateway to the Internet for most people. When Google rigs the game, we all suffer. They need to be stopped.”

Consumer Watchdog expressed concern that FTC Chairman Jon Leibowitz, who is expected to step down from the commission soon, may have rushed to finish the investigation so it could be concluded under his chairmanship.

The nonpartisan, nonprofit public interest group noted that Google’s monopolistic business practices are under investigation by a number of state attorneys general including Texas, California, New York and Ohio. European Union competition officials are also investigating Google.

"What should the caption be?" by John Taylor on flickr. AT&T CEO Randall Stephenson (left) is chatting with Deutsche Telekom CEO Rene Obermann (right) at a May 26 Congressional hearing on AT&T's bid to takeover T-Mobile USA.

Did AT&T really think we’d fall for its broken record promises that the AT&T/T-Mobile merger would help consumers?

Just a few weeks after Consumer Watchdog wrote a letter urging regulators to block the AT&T/T-Mobile merger, the Department of Justice gave the AT&T merger a big thumbs down by filing a civil antitrust complaint challenging the deal.

AT&T agreed to pay T-Mobile a whopping $3 billion “termination fee” if the merger isn’t approved. AT&T probably figured they’d use this as a bargaining chip with the feds to get the deal done (“we’ll have to charge our customers $3 billion more if you don’t approve the merger”). Here’s an idea: AT&T’s CEO and shareholders should pay that fee out of their own pockets. They don’t seem to think twice about slapping early termination fees on unsuspecting customers. After the 2004 AT&T/Cingular merger, AT&T deliberately downgraded its network to the point that its customers’ cell phones became unusable. Customers who wanted out were hit with early termination fees of anywhere between $175 and $400. Maybe forcing AT&T’s greedy execs to pay the “merger termination fee” would make them think twice about pushing a merger which is not in the public interest.

DOJ’s move today marks the beginning of the end for AT&T’s proposed deal, which would have resulted in increased prices, degraded wireless service, and unexpected fees for many consumers throughout the country.

Consumer Watchdog applauded the Department of Justice today for filing a civil antitrust complaint to block the AT&T/T-Mobile Merger. Read about it here.
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Posted by Laura Antonini, research attorney for Consumer Watchdog, a nonpartisan, nonprofit organization dedicated to providing an effective voice for taxpayers and consumers in an era when special interests dominate public discourse, government and politics. Visit us on Facebook and Twitter.