Google Inc. (GOOG), operator of the world’s biggest search engine, faces possible antitrust probes by Ohio and Wisconsin over its business practices, according to a state official and a person familiar with the matters.
Ohio Attorney General Mike DeWine is “evaluating the facts to determine if it’s something we want to review,” Dan Tierney, his spokesman, said. In Wisconsin, Attorney General J.B. Van Hollen is weighing a probe of Google’s bid to buy ITA Software Inc., according to a person familiar with the matter who declined to be identified because the process isn’t public. The U.S. Justice Department is already reviewing the deal.
Google, based in Mountain View, California, faces growing scrutiny by antitrust regulators as it bolsters its search business and expands into areas such as mobile advertising. Officials in Texas, the first state to open its own probe of Microsoft Corp. (MSFT) in 1997, are also questioning Google.
“In the Microsoft case, there was a constant drumbeat from the states,” Harry First, a professor at New York University School of Law in Manhattan, said of the antitrust suit brought by states and the U.S. in 1998. “Their intent was to hold the Justice Department’s feet to the fire,” said First, who ran New York state’s antitrust bureau during Microsoft’s appeal.
Adam Kovacevich, a Google spokesman, said the company is answering inquiries from the Texas attorney general and the European Commission, which is investigating whether Google skews search results to benefit its own services. He declined to comment on possible action by the states.
“If they got two or three different decrees they had to comply with, it would be a mess,” said Herbert Hovenkamp, a professor of antitrust law at the University of Iowa College of Law in Iowa City. “Google operates in a worldwide market. If they have to change their policies for Texas, that’s a mess.”
The year after Texas opened its probe of Microsoft, 20 states joined an antitrust lawsuit against the software maker alongside the Justice Department. The Redmond, Washington-based company’s antitrust troubles started in 1990 with an investigation by the Federal Trade Commission. The Justice Department took over the probe in 1993.
Neither the Justice Department nor the FTC is pursuing a broad antitrust inquiry of Google, according to people familiar with the agencies. Gina Talamona, a Justice Department spokeswoman, and FTC spokeswoman Cecelia Prewett declined to comment on possible investigations of Google.
Investigations by antitrust regulators seek to determine whether companies are using their dominance in a market to restrain competition and harm consumers.
Google, which had 65 percent of the U.S. search market in February, according to ComScore Inc. (SCOR), an Internet marketing research company, is buying companies to boost its online services, spending about $1.8 billion on more than 45 acquisitions last year, according to regulatory filings.
On Feb. 9, Attorney General Chris Koster of Missouri offered to assist the Justice Department’s investigation of Google’s planned purchase of ITA. His spokeswoman, Nanci Gonder, declined to comment on whether the office is conducting its own review. Ohio officials declined to elaborate on what aspects of Google’s business they might explore. Bill Cosh, a spokesman for Wisconsin’s attorney general, declined to comment.
Attorneys general from several states informally discussed the possibility of Google investigations at a meeting of the National Association of Attorneys General in Washington this month, according to a person familiar with the matter. Some 15 attorneys general and their staff attended the meeting, said the person, who declined to be identified because the meeting was private.
Stepped Up Enforcement
Washington-based policy group American Antitrust Institute favors stepped up antitrust enforcement against acquisitions by the search-engine operator, and has called for the Justice Department to block its proposed purchase ITA, a maker of consumer flight information software.
U.S. Senator Herb Kohl, the Wisconsin Democrat who heads the Senate antitrust subcommittee, said he plans to examine Google’s business practices, and Senator Mike Lee of Utah, the panel’s senior Republican, has called for hearings.
Google said last year that Texas was looking into whether its business practices thwarted competition. The information sought by Attorney General Greg Abbott includes Google’s formula for setting advertising rates, according to a civil investigative demand for documents. The demand, similar to a subpoena, compels a company to turn over written material and make executives available for interviews.
Investigators are also seeking documents that show “manual overriding or altering of” search result rankings, according to the demand.
“In today’s world of antitrust, which was ushered in by Microsoft, these big companies have to consider lots of different enforcers,” First said. “It’s states and Europe and other jurisdictions in which they operate. Their practices are going to be tested in many different places.”