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Wednesday, December 19, 2012

U.S. Inquiry of Google Is Expected to Press On

U.S. Inquiry of Google Is Expected to Press On

WASHINGTON - The Federal Trade Commission is unlikely to finish until January its investigation into whether Google abused its power in the search market, people briefed on the investigation said on Tuesday.

Joaquín Almunia, Europe's competition commissioner.

Eric E. Schmidt, the executive chairman of Google.

The agency's chairman, Jon Leibowitz, has consistently said that the commission was aiming to finish its inquiry by the end of 2012, and all signs have been pointing to an imminent settlement, including reports of a Google proposal to avoid formal punishment by promising to change some of its practices.

Two people who have been briefed on the investigation said that some commissioners had asked for more time to consider possible penalties after recent reports portrayed Google as having persuaded the F.T.C. to give the company little more than a slap on the wrist.

For almost two years, the F.T.C. has been studying whether Google's dominant search engine intentionally produces search results that favor its own commerce and other services. Companies with competing search engines as well as commercial sites that specialize in airline ticket information or shopping have complained that Google has stifled competition by its actions.

Those competitors have reacted with outrage over the last week to reports that the F.T.C. planned not to file charges of antitrust violations or unfair competition. The commission was prepared to accept Google's written assurances that it would alter some practices related to search, according to the reports. The F.T.C. could enforce compliance with such a written assurance.

Google's competitors, which have been urging regulators to take action, stepped up their protests after the recent reports. That outrage has apparently reverberated in the halls of the commission, where displeasure has grown at the portrayals of the commission as having been cowed by the technology giant.

The people briefed on the inquiry said that the F.T.C. would most likely conclude its effort in early to mid-January.

The commission is also continuing its look at whether Google abused its control of certain patents concerning mobile phone technology.

Adam Kovacevich, a Google spokesman, said the company would “continue to work cooperatively with the Federal Trade Commission and are happy to answer any questions they may have.” An F.T.C. representative declined to comment.

Google will also apparently be extending into 2013 a parallel three-year inquiry in Europe, but with hope of avoiding a big fine or a finding of wrongdoing.

After meeting with Eric E. Schmidt, Google's executive chairman, the European Union's competition commissioner, Joaquín Almunia, said in a statement Tuesday that “we have substantially reduced our differences.”

“I now expect Google to come forward with a detailed commitment text in January 2013,” Mr. Almunia said.

Mr. Almunia is also focusing on whether Google's search engine thwarted competition by favoring the company's services in presenting results of search queries.

He said Tuesday that in their discussion, the company indicated it would change “the way in which Google's vertical search services are displayed within general search results as compared to services of competitors.”

The other areas in which Mr. Almunia said he expected to reach a deal included how Google uses and displays content from other companies in its search tool, and the restrictions that Google places on advertising and advertisers. Any concessions Google offered would be tested in the marketplace to assess their acceptability to other companies, before becoming binding, Mr. Almunia said.

If there is a settlement, Google will avoid a possible fine of as much as 10 percent of its annual global revenue, about $37.9 billion last year. It would also avoid a guilty finding that could restrict its activities in Europe. “We continue to work cooperatively with the commission,” Al Verney, a Google spokesman in Brussels, said.

Exactly what concessions on search services Mr. Almunia can wring from Google remained an open question Tuesday, though antitrust specialists agreed that he had more leverage than his American counterparts.

While Google is the dominant search engine in the United States, it holds even greater sway in Europe, accounting for more than 90 percent of searches in a number of large markets. That is one factor giving the Europeans greater leverage in trying to set rules on how Google ranks competing services.

Another factor is European antitrust law, which has long given competitors more protection than United States law provides.

Antitrust law in Europe, and the commission's approach to it, has shifted in recent years, raising the hurdles for complainants against dominant companies, said Emanuela Lecchi, an antitrust lawyer in London with Watson, Farley & Williams.

Even so, Ms. Lecchi said, Europe still offers rivals greater protection. Compared with the United States, European regulators “are more inclined to try and make sure there is always a choice of players on markets, and that's something that might allow Google's rivals to make more progress at the end of the day,” she said.

Edward Wyatt reported from Washington and James Kanter from Brussels. Steve Lohr contributed reporting from New York.

A version of this article appeared in print on December 19, 2012, on page B1 of the New York edition with the headline: U.S. Inquiry Of Google Is Expected To Press On.