FTC criticises patent blocking but clears Google of search results bias
The US Federal Trade Commission (FTC) has criticised Google and its subsidiary Motorola Mobility (MMI) for blocking access to essential technology patents but has cleared the company of search results bias after a 19-month anti-trust investigation.
The FTC launched its investigation in June 2011, after Google’s rivals claimed the company was promoting its own services above competitors in search results and was using injunctions to block other companies’ access to patents essential for the development of mobile, tablet and gaming devices.
Commissioners cleared Google of search results bias in a 5-0 decision but said MMI, which has a portfolio of more than 24,000 patents, had engaged in unfair conduct by blocking patent access, something which Google had continued to allow since buying the company for $12.5 billion in August last year.
In response to the FTC’s findings, published on Thursday, Google has agreed to a consent order that limits when it can seek injunctions blocking access to essential patents.
The decree states that Google must submit to a court or arbitrator in disputes over payment rates, and must offer a six-month negotiation period before seeking injunctions at federal courts or the US International Trade Commission, but the company will still be able to seek injunctions against companies that are unwilling to pay for a patent license on fair, reasonable and non-discriminatory terms.
In a statement announcing the settlement, FTC chairman Jon Leibowitz said: “The changes Google has agreed to make will ensure that consumers continue to reap the benefits of competition in the online marketplace and in the market for innovative wireless devices they enjoy. This was an incredibly thorough and careful investigation… and the outcome is a strong and enforceable set of agreements.”
James Kulbaski, partner at Oblon, Spivak, McClelland, Maier & Neustadt LLP, said the order is unlikely to have a significant impact on future patent litigation, but does provide some welcome clarification for patent owners.
“The decree won’t change much, if anything—companies usually negotiate for extended periods before filing litigation, and Google is still permitted to seek injunctions—but it’s good to have guidelines out there. If other companies follow this example, they should be safe from similar anti-trust investigations,” he said.
Google has also agreed to make changes to its search results and AdWords functions, allowing companies to opt out of having data such as reviews appear in Google search result pages, and allowing advertisers to export advertising campaign data from Google AdWords to other third party services.
Under the terms of the agreement, Google is required to report on its compliance to the FTC for five years. If the commission suspects non-compliance at any time during this period, it has the right to review company documents and question employees.
But while Google has been cleared in the US, it is still the subject of a competition investigation into search results bias in Europe. The European Commission has given the company until 18 January to respond to its statement of objections, issued December 18, and if a settlement is not reached, Google could be fined up to 10 percent of its revenue. A spokesperson for the European Commission told press that the FTC's decision has been noted, but will have no direct implications for its own investigation.
