The U.S. Federal Trade Commission (FTC) recently concluded a 19-month investigation into Google’s Internet search engine practices concluding that Google had not violated any antitrust laws. However, at the conclusion of the investigation, Google was forced to sign a consent agreement intended to reduce confusion and uncertainty currently surrounding Standard Essential Patents. While this agreement only applies to Google, it will likely be a helpful guide for any future Standard Essential Patent and antitrust cases.
One of the main issues at hand in this investigation regarded the Google search engine skewing internet search results to favor its own products and services and portraying unbiased results. Many argue that this practice undermines competition and ends up hurting the consumer. At the close of the investigation the FTC issued a statement saying, “This type of patent hold-up can lead to higher prices, as companies may pay higher royalties for the use of Google’s patents because of the threat of an injunction, and then pass those higher prices on to consumers.” The Consent Orders signed by Google are intended to prohibit the company from seeking injunctions against willing licensees to block the use of standard-essential patents that the company previously committed to license under fair, reasonable, and non-discriminatory (FRAND) terms.
Many believe that the FTC was too easy on Google and argue that the settlement left loopholes for Google to get around. Critics of the settlement argue that during patent litigation negotiations Google can still threaten to sue for injunctions, knowing that many potential licensees would be intimidated by the potential to be in litigation with Google. Yelp, a local directory service that has long been critical of Google’s unfair behavior in the search engine community stated that the FTC’s announcement represents a “missed opportunity to protect innovation and the internet economy, and the consumers and businesses that rely upon it.” FTC Chairman Jon Leibowitz was optimistic about the issuance of the consent agreements, saying, “Today’s landmark enforcement effort will become what we hope will be a template for resolution of [SEP] licensing disputes across many industries.” If Google violates the consent agreement, the FTC can fine the company up to $16,000 for each violation. In addition, Google indicated they it would stop skewing search results and “scraping” rivals website content in search results.
While Google may have been successful with the FTC, it is still facing regulators in Europe where they have been accused of similar anti-competitive practices. A spokesman for the European Commission indicated that they had taken note of the decision made by the FTC in the United States but don’t anticipate it will have any implications for their ongoing investigation.
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