FTC: Google isn’t a monopoly, it’s just big-boned

This just in: The FTC has decided Google isn’t really evil after all, concluding its 19-month antitrust investigation with a gentle, loving slap on the wrist. That makes some folks happy and others hopping mad. Surprised?

In a nutshell, the feds decided Google wasn’t using its market muscle to promote its own stuff above those of competing search services, despite the fact that Google did quite literally place its own stuff above competitors in its search results.

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According to the FTC report:

A key issue for the Commission was to determine whether Google changes its search results primarily to exclude actual or potential competitors… or to improve the quality of its search product and the overall user experience. The Commission [concluded] Google adopted the design changes… to improve the quality of its search results, and that any negative impact on actual or potential competitors was incidental to that purpose.

Translation: Google really did have our best interests at heart; screwing over Bing and friends was just gravy.

Enhanced translation: The FTC (and by extension the DOJ) did not have the stomach for a protracted, enormously expensive antitrust battle whose conclusion was far from a certainty, so it decided to cut a deal.

In exchange for clearing Google of alleged search bias, the feds got a few items in return. It persuaded Google to not use its trove of Motorola patents to go medieval on the assets of makers of laptops, smartphones, and tablets that rely on standardized technologies invented by Moto Mobility, though it could continue to charge license fees for them. The G-men also agreed to make it easier for advertisers to use both its AdWords program and rival ad platforms, and it vowed to stop scraping content from vertical search sites like Yelp in order to “improve” its search results.

Was this a win-win for everyone or did we all just get rogered? That depends entirely on whom you ask and where they’re sitting.

The Competitive Enterprise Institute, which hates anything that smacks of government regulation and would probably get rid of stop signs if it could, praised the deal. Ryan Radia, the CEI’s associate director of technology studies, says:

The FTC’s unanimous decision not to pursue an antitrust lawsuit against Google reflects the vigorous state of competition on the Internet — and the utter failure of Google’s critics to put forward a serious antitrust case against the company.

Consumer Watchdog, a group that hates Google with such a passion that it would continue to do so even if Google gave every homeless person on the planet $100,000 cash and a puppy, condemned it. Per John M. Simpson, director of the group’s Privacy Project:

The FTC rolled over for Google. They’ve accepted Google executives’ promises that they will change two practices without even requiring a consent agreement, but Google has a track record of broken promises. Don’t forget, this fall the FTC fined Google $22.5 million for violating its most recent consent agreement. Why would the FTC take Google at its word?

Hey look — I just “improved” my blog results by scraping content from other sources. Maybe the FTC will come after me next.

Not surprisingly, Microsoft is less than thrilled with the decision. Deputy general counsel Dave Heiner wrote a blog post in which he called the decision “weak and — frankly — unusual.” He wrote:

There appears to be no reason, despite the FTC’s optimistic statements this morning, to believe that Google recognizes its responsibilities as an industry leader. That is certainly consistent with the lack of change we continue to witness as we and so many others experience ongoing harm to competition in the marketplace.

The Redmondites have been ginning up the anti-Google PR machine for the last couple of years, via intermediaries like FairSearch.org. Last July they decided to get serious and hired ex-Clinton political attack dog Mark Penn to come up with new ideas. His contribution: Scroogled.com, a website that invites consumers to feel “scroogled” by Google’s manipulation of search results, then switch to Bing.

(Penn and Microsoft were apparently unaware of the existence of Scroogle.com, which at one time was a Google knockoff porn search engine and is now a live video chat service. So getting “scroogled” has an entirely different meaning to certain folks.)

Granted, there is no doubt that Google is the 9,000-pound gorilla in the chat room. It wields enormous power over the success or failure of Web enterprises, and its rules are inscrutable and constantly changing. It would not surprise me in the least to find that, despite the FTC’s ruling, Google is manipulating its search results to its own advantage.

But I think the Microsoft antitrust battles of the late ’90s are instructive here. There is also no doubt in my mind Microsoft used its market power to crush Netscape and terrorize hardware OEMs. The arrogance poured off the company like the sweat on Ballmer’s forehead. With Microsoft running the show, software innovation was essentially dead. It was a dark time in the tech world.

What happened since? The tech world changed. Microsoft, still dominant on desktops, is lagging behind everywhere else. New browsers like Firefox and Chrome that were not dependent on OEMs for their success emerged and managed to stick around long enough to gain traction. Mobile OSes, where Microsoft has always sucked, became the big kahuna. Suddenly that desktop OS monopoly doesn’t look so intimidating any more.

In the tech world, when a thing works far better than the competition — and let’s be honest, Google search still is superior, despite improvements by Bing — the world flocks to it. It becomes a de facto monopoly until a more attractive option comes along or the world changes again.

But companies that have grown to the scale of a Google or a Microsoft generally don’t survive major paradigm shifts unscathed. I can’t think of one that has. And so it will be with Google. All we have to do is wait.

Was the FTC too soft on Google? Weigh in below or email me: cringe@infoworld.com.

This article, “FTC: Google isn’t a monopoly, it’s just big-boned,” was originally published at InfoWorld.com. Follow the crazy twists and turns of the tech industry with Robert X. Cringely’s Notes from the Field blog, and subscribe to Cringely’s Notes from the Underground newsletter.