Google threatened to remove web sites from its search engine unless they let Google use their content

Eric schmidtJessica Rinaldi/ReutersGoogle chairman Eric Schmidt, who testified before Congress in 2012 about how the company organizes search.

Over the years, some competitors like Yelp have complained that Google manipulates its search results to bury competitors and favour its own sites.

On Thursday, we found out that some government investigators shared a lot of those concerns back in 2012, and wanted to sue Google for antitrust over them.

The Wall Street Journal published excerpts from a 2012 Federal Trade Commission document. The document was part of the FTC’s investigation of Google after complaints from competitors like Yelp. It was never meant to be public, but was accidentally sent to the Journal after a Freedom of Information Act request.

Here’s what the Journal found when they read the report:

In discussing one of the issues the FTC staff wanted to sue over, the report said the company illegally took content from rival websites such as Yelp, TripAdvisor Inc. and Inc. to improve its own websites. It cited one instance when Google copied Amazon’s sales rankings to rank its own items. It also copied Amazon’s reviews and ratings, the report found.

When competitors asked Google to stop taking their content, it threatened to remove them from its search engine.

“It is clear that Google’s threat was intended to produce, and did produce, the desired effect,” the report said, “which was to coerce Yelp and TripAdvisor into backing down.”

Those last quotes come directly from the report.

The report also found that this activity caused “real harm to consumers and to innovation.”

Eventually, Google offered to let web sites opt out of including their content in Google’s search results, and made some other changes. In 2013, the FTC commissioners unanimously voted 3-0 to drop the investigation.

Two other big findings, according to the Journal:

  • Google was more dominant than most people thought. Google’s internal numbers for U.S. search market share were between 69% and and 84%. ComScore, a widely trusted measurement firm, said at that time that its share was only 64%. Google knew the numbers were wrong: Economist Hal Varian said “from an antitrust perspective, I’m glad to see [Comscore] underestimate our share,” according to a direct quote from the report. (Although he may have been saying that in another context.)
  • Google placed restrictions on web sites who used its search results on what they could do with rivals Microsoft Bing and Yahoo Search. The Journal doesn’t go into detail here, but the FTC staffers writing this report thought it was an illegal use of monopoly power.

The FTC probably won’t reopen an investigation just because this report was leaked. This isn’t news to the FTC.

However, it could give new fodder to European investigators. There, some members of the European Parliament have gone as far as to say that Google should be forced to split its search engine from the rest of its business.

Either way, it’s a huge dent in Google’s preferred image as the largest startup in the world, a hotbed of innovation like self-driving cars and virtual reality.

These sound more like the tactics of a bully.

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