FTC To Investigate Google Over Antitrust Issues

Is this the big one? Is Google (NSDQ: GOOG) the next Microsoft? (NSDQ: MSFT) That’s what folks are sure to be asking, now that the Federal Trade Commission is opening a wide-ranging investigation about whether Google’s dominance in its core search business oversteps antitrust law, according to a report from the WSJ.

Some of Google’s competitors have been hoping for an investigation like this, and in fact may have seen it coming. A group of companies that banded together under the name FairSearch to opposed the Google-ITA merger was unexpectedly pleased when that merger was approved, because of the tough conditions that were imposed, and because of the possibility of a wider investigation-which has come to pass.

The investigation is still in an early stage, with regulators about to issue formal demands for more information from Google. It’s much too early to know whether the investigation will end up as a huge tech antitrust battle similar to the government’s legal fight with Microsoft in the 1990s. The judgment in the case against Microsoft just expired last month.

Google has understood for some time that an antitrust investigation could be one of its biggest concerns. When it hired a new antitrust lawyer in 2006, he reportedly asked, “Is this really a full-time job?” By 2009, the company was heavily engaged in telling the media and policymakers its own story: that the competition was only “a click away.” Read Google’s 2009 antitrust presentation [PDF].

Still, Google’s dominance in search is hard to ignore. Recent numbers from comScore show the company controls about two-thirds of the U.S. search market, more than Yahoo (NSDQ: YHOO) and Microsoft combined. Every other search engine is an also-ran, at best.

Neither Google nor the government are commenting on today’s reports.

The FairSearch.org coalition expressed their support for the investigation in an emailed statement, saying that Google’s anticompetitive behavior hurts consumers. “[Google’s] anti-competitive practices include scraping and using other companies’ content without their permission, deceptive display of search results, manipulation of search results to favor Google’s products, and the acquisition of competitive threats to Google’s dominance,” the FairSearch statement stated.

U.S. antitrust regulators have taken a hard look at Google before, but it’s always been in the context of a specific acquisition-not an investigation of Google’s overall business. In April, antitrust regulators approved Google’s purchase of ITA. The Department of Justice also In 2008, Google had to drop plans to make an advertising partnership with Yahoo, because government lawyers were just hours away from filing an antitrust suit.

European regulators opened an antitrust investigation into Google last year, which is ongoing, and the company’s arch-rival Microsoft recently made clear how happy that makes them. U.K. authorities, however, have declined to jump on the Google antitrust bandwagon.