Written for and first published here: http://mobilemarketingmagazine.com/content/ftc-tells-google-stop-being-evil
Google has agreed to change some of its business practices following a
large-scale investigation by the Federal Trade Commission (FTC) into
the company's operations.
The FTC criticised Google for breaches of licensing agreements on
patents essential to the development of the industry. The agreement
could spell the end of the wave of costly class actions over patent
infringments between technology companies.
Google has also promised to stop using content from other companies’
websites for use on its own vertical offerings, and will also give
advertisers more flexibility to manage ad campaigns on Google AdWords,
along with other rival ad platforms simultaneously. While Google was
investigated for manipulating search algorithms to favour its own
vertical websites, the FTC concluded that this ‘could be plausibly
justified as innovations that improved Google’s product and the
experience of its users’.
Standardised patent ruling
Motorola, bought by Google in June, is accused of reneging on
commitments to give competitors fair, reasonable and non-discriminatory
access to patents needed to develop products including iPhones, iPads
and Xboxes. Google continued this, seeking injunctions against companies
that wanted to license these patents, which ‘constitute unfair methods
of competition, as well as unfair acts and practices’, the Commission
Should the terms be accepted following a period of public comment,
this could set a precedent for similar disputes across other industries
where companies amass patents for ‘for purely defensive purposes’. The
judgement should prevent firms from performing a ‘patent ambush’, where
the cost of royalties incurred by businesses can be passed on to
consumers, or prevent products from being developed at all.
“The changes Google has agreed to make will ensure that consumers
continue to reap the benefits of competition in the online marketplace
and in the market for innovative wireless devices they enjoy,” said FTC
chairman, Jon Leibowitz. “This was an incredibly thorough and careful
investigation by the Commission, and the outcome is a strong and
enforceable set of agreements.”
Some members of the Commission criticised the FTC’s use of Section 5
of the Federal Trade Commission Act as an abuse of the its authority
and claimed that this judgement is in conflict with a previous ruling
concerning Apple and Motorola.