US FTC is investigating Google over anti-trust concerns

US REGULATORS are investigating Google over alleged abuse of its dominance in the internet search advertising market.

Google faces subpoenas and a full probe by the US Federal Trade Commission (FTC) over supposedly anti-competitive practices relating to its search engine.

This case was likened by the Wall Street Journal to a similar one from the US Depart of Justice against Microsoft in the 1990s. In that case Microsoft's dominance in the operating system market led to long investigations and tighter regulation over what it could and could not do. It also negatively affected the company's public relations, a blow to its image from which Microsoft has largely failed to recover.

This is the most significant case against Google in its 12 year history, despite some other anti-trust and privacy probes over recent years. The main difference between this case and the smaller investigations it previously faced is that authorities will be looking more deeply into Google's core advertising practices, which could have a huge effect on its business.

Google is in a good position to defend itself against possible prosecution, however, as it can claim a monopoly so long as it does not abuse its position. What constitutes as abuse will likely be a major argument in the courts, with rivals presumably arguing that they are losing business to Google's growing empire.

Rivals losing business is not necessarily something that authorities can rap Google's knuckles for, as it is part and parcel of normal competition, providing Google has not done anything unlawful in its attempts to be the biggest search engine cat in town.

One area of concern in this latest probe is whether or not Google's search engine ranks its own web sites and services above those of rivals, which could be seen as anti-competitive. Many critics claim that Google automatically bumps its own web sites to the top of the list, regardless of whether or not there are other ones out there that might better suit a user's search.

Google will probably argue that it's natural for it to advertise its own products through its services, but its position as the market leader means it might have to be more careful how it does this, since it will have such a huge effect on other companies.

Google's has a market share of around 70 per cent in the US and 80 per cent in Europe, according to Comscore figures. Rivals like Yahoo and Microsoft's Bing have failed to adequately compete, signing deals to partner in an attempt to halt Google's growing tide.

Google claims that regulator investigations are caused by rivals who fear the "disruptive nature" of its business, particularly when it enters a new market. Google has been successful in a number of fields and has been diversifying over recent years to tackle the mobile and TV markets, resulting in growing consternation among former leading companies in those areas. µ