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Friday, April 27, 2012

FTC ramps up its probe of Google

Federal regulators escalated their antitrust investigation of Google on Thursday by hiring a prominent litigator, sending a strong signal that they are prepared to take the Internet giant to court.

The Federal Trade Commission is examining Google’s immensely powerful and lucrative search technology, which directs users to hundreds of millions of online and offline destinations every day. The case has the potential to be the biggest showdown between regulators and Silicon Valley since the government took on Microsoft 14 years ago.

Then as now, the core question is whether power was abused. The agency’s inquiry has focused on whether Google has manipulated its search results, making it less likely that competing companies or products appear at the top of a results page.

A spokeswoman for Google, which is based in Mountain View, Calif., declined to comment.

Federal Trade Commission officials cautioned that no decision had been made about whether to bring a formal case against Google. But the hiring of Beth A. Wilkinson, a former Justice Department prosecutor who played a lead role in the conviction of the Oklahoma City bomber Timothy McVeigh, immediately catapulted the investigation to another level. The agency has hired outside litigators only twice in the last decade.

The hiring, which ramps up the investigation into allegations that Google unfairly ranks search results to favor its own businesses and increase advertising rates for competitors, came as Google fired back at the Federal Communications Commission in a separate battle involving its Street View service.

The Internet search giant said it did not obstruct the FCC's investigation into its mapping service and placed the blame for the delay in completing the probe on the regulators.

"Google has cooperated fully with investigations around the globe regarding this matter, acting in good faith at all times," the Mountain View, Calif., company said in its letter. "While Google disagrees with the premise of the notice and many of its factual recitals, Google has determined to pay the forfeiture proposed in the notice in order to put this investigation behind it."

Google filed the response after the FCC accused it of deliberately impeding and delaying the probe into incidents in 2010 when Google collected and stored data from unprotected wireless networks while cruising the streets to take photos for its mapping service. Google said its interception of emails, passwords and other private information was inadvertent.

The agency proposed slapping Google with a $25,000 fine for stonewalling investigators. Google said it would pay the fine but said it was not admitting any wrongdoing. It instead criticized the FCC for its handling of the probe.

"Over the course of the 17 months it took the FCC to officially conclude its investigation, the commission did not contact Google for weeks and months at a time," Google said in its reply. In one instance, Google said, it did not hear anything from the agency for 83 days; in another, for 52 days. Google also said it voluntarily extended the probe by seven months after the FCC ran out of time based on its own rules.

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