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Feds escalate Google probe, hire top litigator to help antitrust review

Published: Friday, Apr. 27, 2012 - 12:00 am | Page 6B

Federal regulators have ramped up their antitrust investigation of Google on Thursday by hiring a high-powered litigator, sending a strong signal they are prepared to take the Internet giant to court.

The Federal Trade Commission is examining Google's immensely powerful and lucrative search technology, which directs users to hundreds of millions of online and offline destinations every day. The case has the potential to be the biggest showdown between regulators and Silicon Valley since the Microsoft suit 14 years ago.

Then as now, the central question was whether power was abused. The agency's inquiry has focused on whether Google has abused its dominance by manipulating its search results, making it less likely that competing companies or products appear at the top of the results page.

A spokeswoman for Google, which is based in Mountain View, declined to comment.

FTC officials cautioned that no decision had been made about a formal case against Google. But the hiring of Beth A. Wilkinson, a former Justice Department prosecutor who played a lead role in the conviction of Oklahoma City bomber Timothy McVeigh, immediately catapulted the investigation to another level. The FTC has hired outside litigators only twice in the last decade.

"It's a watershed moment when you hire someone like this," said David Wales, a former FTC official now in private practice. "This shows Google that if it doesn't give you the remedy you want, you're going to litigate."

Several antitrust experts compared the hiring of Wilkinson – who has brought about 40 major cases in public and private practice and won them all – to the government's hiring of David Boies to represent it against Microsoft.

"It increases the likelihood that there will be a case," said Douglas F. Broder, a law partner at K&L Gates in New York and the author of several textbooks and articles on antitrust law.

The Microsoft case in the late 1990s transformed the tech industry, ultimately hobbling its most powerful company and allowing for the rise of new firms like Google. Now Google wields the same sort of power that Microsoft once did, and is under the same sort of scrutiny.

It has been involved in one privacy controversy after another over the last year. Indeed, the announcement of the hiring of Wilkinson – made by the FTC chairman, Jon Leibowitz, at a meeting here Thursday with reporters – eclipsed Google's formal response earlier in the day to a fine by the Federal Communications Commission for obstructing a separate investigation.

Wilkinson is a partner at the law firm of Paul, Weiss in Washington. Her work for the FTC, which will be part time, begins Monday. Any decision about filing a suit is likely to be months away.

The general issue underlying the Google antitrust investigation is whether Google abuses its power in the market for Internet search. Google controls about 66 percent of the U.S. search market, more than all of its competitors combined, according to comScore. Microsoft's Bing accounts for about 15 percent of Internet searches, with Yahoo gathering 14 percent.

Competitors have said that Google at times adjusts the algorithm that produces its search results to lower the likelihood that a link to a competitor or a potential competitor for Google's products appears near the top of the results.

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