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Consumer Watchdog Asks Justice Department To Take Over Google Antitrust Action As Chairman Schmidt Equates Google With 1990s Microsoft

WASHINGTON, Dec. 18, 2012 /PRNewswire-USNewswire/ -- Consumer Watchdog today called on the U.S. Department of Justice to take over the ongoing federal antitrust probe of Google after the company's chairman in a news interview equated it with antitrust poster child Microsoft in the 1990s. The Federal Trade Commission appears ready to conclude its 20-month investigation "with no more than a scolding."

"This is baffling in light of recent comments by Google Executive Chairman Eric Schmidt comparing his company to Microsoft in the 1990s, when the Department of Justice prosecuted the software company for abusing its monopoly of desktop computers," the nonpartisan, nonprofit group wrote in a letter Tuesday to Attorney General Eric Holder. "In other words, the FTC is settling for rubbish just as the new computer monopolist equates its own power and dominance with the last poster child for government antitrust action. The public deserves to know how even Google's executives see the company's dominance of mobile and online markets."

The public would have been better off if the Justice Department had taken charge of the investigation from the start, Consumer Watchdog said. The only meaningful checks on Google's wrongdoing have come from the Department, when it negotiated a settlement that fined Google $500 million for illegally advertising drugs.  The Department also took the lead in opposing the anticompetitive Google Books settlement.

Consumer Watchdog President Jamie Court, Washington Director Carmen Balber and Privacy Project Director John M. Simpson signed the letter to Holder.  They wrote:

"Press reports suggest that the FTC will close its probe of Google's anti-competitive practices by accepting a letter that promises the company will play nice with others.  Such a 'pledge' is meaningless for a company with Google's track record of lying to regulators and the public about its business activities and violating consent agreements. Consumers need the Justice Department to step in and fill the vacuum that will be left if the FTC abdicates its responsibility to protect consumers from Google's abuse of its monopoly to manipulate consumers in the online and mobile worlds."

Read Consumer Watchdog's letter here:  http://www.consumerwatchdog.org/resources/ltrholder121812.pdf

"Given the FTC's track record with Google we were not optimistic when the Justice Department deferred to the Commission's antitrust investigation. And, if press reports are correct, that pessimism is justified. The Department of Justice has fared far better in its dealings with the Internet giant, which is why we call upon you to reopen the Department's investigation," the letter said. "Consumer Watchdog believes the best course of action is for the Department of Justice ultimately to bring an antitrust suit and go to trial.  The fully developed public record that would result from a trial would ensure that effective remedies could be put in place.  A negotiated settlement will inevitably invite cynicism about the results, and keep any documents obtained in the course of the investigation out of the public eye."

Consumer Watchdog said the remedies that the Justice Department should seek include:

  • Google should be required to divest Motorola Mobility, whose standards essential patents it is using unfairly by not making them available for license on a fair basis.
  • Google should be broken into different companies devoted to different lines of business so there is no incentive to unfairly use search to promote other services.
  • Google's search services should be separated from services where Google provides its own content.
  • Google's search engine's importance as a gateway to Internet requires a maximum degree of openness and transparency. Google's monopoly position and importance to the Internet means that the company should be closely regulated like a public utility.
  • Google should be forced to disgorge its monopolistic gains through the imposition of substantial financial penalties.  The amount disgorged could be tied to paying back consumers for monetizing their private information and content without asking them permission or compensating them.

Consumer Watchdog is a nonprofit consumer advocacy organization with offices in Santa Monica, CA and Washington, DC. Visit Consumer Watchdog online at www.consumerwatchdog.org.

SOURCE Consumer Watchdog

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