Good afternoon and thank you all for coming.
If people want to move down there’s a little more room for press. I’m pleased to be joined
today by Rich Feinstein our director of the FTC’s bureau of competition, his deputy Pete
Levitus, Howard Schilansky, Director of the FTC’s bureau of economics AND CHUCK HARWOOD
our acting director of the FTC and. BETH WILKINSON HAS BEEN GREAT COUNCIL TO THE FTC IN OUR INVESTIGATIONS
OF GOOGLE IS ON A LONGSTANDING VACATION. HER HELP WAS CONSIDERABLE. WE’RE JOINED BY A NUMBER
OF FTC STAFF THAT HAVE WORKED TIRELESSLY OVER THE LAST 19 MONTHS ON THE GOOGLE INVESTIGATIONS.
THIS MORNING BY A BIPARTISAN VOTE OR TWO BIPARTISAN VOTES, 4-1 AND 5-0, THE FEDERAL TRADE COMMISSION
ANNOUNCES COMPREHENSIVE — A COMPREHENSIVE SETTLEMENT OF ALL OF OUR COMPETITION RELATED
INVESTIGATIONS INTO GOOGLE. TODAY’S ACTION DELIVERS MORE RELIEF FOR AMERICAN
CONSUMERS FASTER THAN ANY OTHER OPTION AVAILABLE TO THE COMMISSION AND PROTECTS COMPETITION
AND CONSUMERS IN A NUMBER OF CRUCIAL MARKETS CENTRAL TO THE DAILY LIVES OF HUNDREDS OF
MILLIONS OF AMERICAN CONSUMERS AND BUSINESSES. IT ENSURES AMERICAN’S ACCESS TO SMART PHONES,
TABLET COMPUTERS AND COMPUTER GAMING SYSTEMS AS WELL AS A FAIRER PLAYING FIELD
IN INTERNET SEARCH AND SEARCH ADVERTISING. TODAY’S COMMISSION ACTION FOLLOWS AN EXHAUSTIVE
INVESTIGATION INTO GOOGLE’S BUSINESS PRACTICES. COMMISSION STAFF RECEIVED OVER 9 MILLION PAGES
OF DOCUMENTS FROM GOOGLE AND ITS — AND OTHER PARTIES, INTERVIEWED NUMEROUS INDUSTRY PARTICIPANTS
AND TOOK SWORN TESTIMONY OF KEY GOOGLE EXECUTIVES. THERE ARE TWO ASPECTS TO THE SETTLEMENT WE
ANNOUNCED TODAY. THE FIRST INVOLVES GOOGLE’S MISUSE OF PATENT PROTECTION TO PREVENT COMPETITION.
WE STOPPED THAT ABUSE. THE SECOND CONCERNS ALLEGATIONS THAT GOOGLE UNFAIRLY BIASES ITS
SEARCH RESULTS. WE CLOSED THIS INVESTIGATION FINDING THE EVIDENCE DOES NOT SUPPORT A CLAIM
THAT GOOGLE’S PROMINENT DISPLAY OF ITS OWN CONTENT ON ITS GENERAL SEARCH PAGE WAS UNDERTAKEN
WITHOUT LEGITIMATE JUSTIFICATION. WE DO ACCENT GOOGLE’S LEGALLY BINDING AND COMMITMENTS TO
STOP THE MOST PROBLEMATIC BUSINESS PRACTICES RELATING TO SEARCH IN SEARCH ADVERTISING.
THIS ALSO COMES WITH MONITORING OBLIGATIONS AS WELL.
LET ME START WITH THE PATENT ISSUE. BY A 4-1 VOTE, A BIPARTISAN MAJORITY OF THE COMMISSION
ORDERS GOOGLE TO STOP SEEKING TO EXCLUDE COMPETITORS USING STANDARD ESSENTIAL PATENTS THAT MOTOROLA,
WHICH GOOGLE PURCHASED, HAD FIRST PROMISED BUT REFUSED TO LICENSE UNFAIR AND REASONABLE
TERMS. THESE ESSENTIAL PATENTS AND OTHERS LIKE THEM
ARE THE CORNERSTONE OF THE SYSTEM OF INTEROPEN — INTEROPERABILITY STANDARDS THAT
WE HAVE TAKEN FOR GRANTED.
OVER HALF OF AMERICAN CONSUMERS OWN AND USE ONE OF THESE DEVICES, INCLUDING iPHONES, ANDROID
PHONES AND X BOXES. TODAY’S ACTION BY THE COMMISSION ENSURES THAT COMPETITION ENSURES
TO WORK FOR THE BENEFIT OF AMERICAN CONSUMERS IN THESE IMPORTANT MARKETS.
NOW, YEARS AGO MOTOROLA PROMISED TO LICENSE ITS PATENTS ESSENTIAL TO THESE INTEROPERABILITY
PATENTS ON FAIR, REASONABLE AND NONDISCRIMINATORY TERMS.
THOSE ARE CALLED FRAN TERMS, TO ANY INTERESTED MANUFACTURER. OTHER COMPANIES TOOK MOTOROLA
AT ITS WORD. OVER MANY YEARS RELYING ON THIS PROMISE, THEY
INVESTED BILLIONS AND PROBABLY TENS OF BILLIONS OF DOLLARS IN DEVELOPING AND BRINGING PRODUCTS
TO CONSUMERS USING THESE PATENTS. RATHER THAN OFFERING A LICENSE
OR THE LICENSE IT PROMISED, MOTOROLA CHANGED THE RULES OF THE GAME. THE COMPANY SOUGHT
INJUNCTIONS AND EXCLUSION ORDERS TO PREVENT THE DEVICES FROM COMING INTO THE COUNTRY AGAINST
PRODUCTS USING THEIR PATENTS. AFTER GOOGLE PURCHASED MOTOROLA, IT INHERITED THIS LITIGATION
AND CONTINUED THE SAME PRACTICES. GOOGLE’S UNFAIR CONDUCT THREATENED LAB TOP AND TABLET
COMPUTERS AND SMART PHONE AND GAMING SYSTEMS OR IT COULD HAVE INCREASED THE COST OF THESE
PRODUCTS BY REQUIRING MANUFACTURERS TO PAY HIGHER LICENSING FEES WHICH THEN WOULD HAVE
BEEN PASSED ON TO CONSUMERS. YOU KNOW, HERE’S AN EXAMPLE OF ONE PRODUCT AT ISSUE IN THE
CASE. IT’S AN iPAD. I HAPPENED TO HAVE AN OLDER ONE. HERE’S A NUMBER OF OTHER DEVICES.
X BOXES, GOVERNMENT-ISSUED RESEARCH IN MOTION SMART PHONES THIS ARE ALL — THAT ARE ALL
UNDER — UNDER THREAT IF THIS PRACTICE HAD BEEN ALLOWED TO CONTINUE AND GROW. GOOGLE’S
SETTLEMENT WITH THE COMMISSION REQUIRES TO GOOGLE TO ABANDON THEIR CLAIMED FOR RELIEF
ON ANY ESSENTIAL PATENTS WITH A FRAN COMMITMENT. AND OFFER A LICENSE ON FRAN TERMS TO ANY COMPANY
THAT WANTS TO LICENSE THESE PATENTS IN THE FUTURE. TODAY’S LANDMARK ENFORCEMENT ACTION
WILL BECOME, WE HOPE, A TEMPLATE FOR RESOLUTION OF SEP
LICENSING DISPUTES ACROSS MANY INDUSTRIES AND BUILDS ON MORE THAN 15 YEARS OF BIPARTISAN
WORK AND THE FEDERAL TRADE COMMISSION FROM PATENT REPORTS TO WORKSHOPS TO ENFORCEMENT
ACTIONS LIKE THIS ONE AIMED AT PROTECTING THE INTEGRITY OF THE PATENT SYSTEM AND EVEN
MORE IMPORTANTLY, PROTECTING AMERICAN CONSUMERS. TODAY’S ACTION MAKES CLEAR THE COMMITMENTS
TO MAKE PATENTS AVAILABLE ON REASONABLE TERMS MATTERS AND THAT COMPANIES CANNOT MAKE THESE
COMMITMENTS WHEN IT SUITS THEM, THAT IS TO HAVE A PATENT INCLUDED IN A STANDARD AND BEHAVE
LATER ONCE THE STANDARD IS IN PLACE AND THOSE RELYING ON IT ARE VULNERABLE TO EXTORTION.
TODAY’S COMMITMENT ACTION WILL RELIEVE COMPANIES OF HOARDING PATENTS FOR DEFENSIVE PURPOSES,
SAVINGS WE HOPE THAT CAN BE INVESTED IN JOB CREATING RESEARCH AND DEVELOPMENT. BEFORE
WE TURN TO THE COMMISSION’S INVESTIGATION OF GOOGLE’S SEARCH AND SEARCH ADVERTISING
PRACTICES, LET ME SAY A FEW WORDS ABOUT THE COMMISSION’S SECTION 5 AUTHORITY, WHICH WAS
THE STATUTORY BASIS FOR OUR CHALLENGE TO GOOGLE’S UNFAIR CONDUCT. WHEN CONGRESS CREATED THIS
AGENCY IN 1914, 99 YEARS AGO, IT ENDOWED THE COMMISSION WITH A UNIQUE COMMISSION OF BROAD
JURISDICTION AND LIMITED REMEDIES. OUR SECTION 5 AUTHORITY REACHES BEYOND THE ANTITRUST LAWS
TO PROHIBIT UNFAIR METHODS OF COMPETITION. IT’S LIE A PENNUMBRA. WE CAN
IMPOSE FINES. WE DON’T PUT MALEFACTORS IN JAIL. SECTION 5 VIOLATIONS ARE NOT VIOLATIONS
OF THE ANTITRUST LAWS ARE NOT A BASIS FOR SUBSEQUENT FOLLOW-ON PRIVATE LAWSUITS FOR
TREBLE DAMAGES IN FEDERAL COURT. IN A SOCIETY THAT MANY BELIEVE IS OVERLY LITIGIOUS, THE
JUDICIAL USE OF SECTION 5 REPRESENTS A PRACTICAL WAY FOR THE COMMISSION TO BRING PROBLEMATIC
CONDUCT TO A HALT. IN THE SECOND PART OF THE ACTION, GOOGLE COMMITTED TO STOPPING THE MOST
TROUBLING OF ITS BUSINESS PRACTICES RELATED TO INTERNET SEARCH INTO SEARCH ADVERTISING.
GOOGLE WILL STOP MISAPPROPRIATING OR SCRAPING THE CONTENT OF ITS RIVALS FOR USE OF ITS OWN
SPECIALIZED SEARCH RESULTS. GOOGLE WILL DROP CONTRACTUAL RESTRICTIONS THAT IMPAIR THE ABILITY
OF SMALL BUSINESSES PARTICULARLY TO ADVERTISEMENT ON COMPETING SEARCH ADVERTISING PLATFORMS.
GOOGLE HAS MADE LEGALLY ENFORCEABLE AND BINDING COMMITMENTS TO RESOLVE THE COMMISSION’S CONCERNS.
THESE COMMITMENTS HAVE REPORTING REQUIREMENTS THAT WILL ALLOW THE COMMISSION TO VIGOROUSLY
MONITOR AND ENFORCE COMPLIANCE IF NECESSARY. LET ME TALK IN A LITTLE MORE DETAIL ABOUT
SOME OF THIS CONDUCT. THE COMMISSION INVESTIGATED ALLEGATIONS THAT GOOGLE MISAPPROPRIATED WITHOUT
CONSENT THE CONTENT OF RIVALS WEBSITES TO IMPROVE ITS OWN PRODUCTS AND PASS THIS CONTENT
OFF TO CONSUMER AS IF IT WERE ITS OWN. FOR EXAMPLE, GOOGLE ALLEGEDLY SCRAPED THE USER
GENERATED REVIEWS OF LOCAL RESTAURANTS DISPLAYED ON YELP AND LED CONSUMERS TO BELIEVE THAT
THEY WERE ITS OWN. WHEN SOME WEBSITES COMPLAINED TO GOOGLE ABOUT THE PRACTICE, GOOGLE ALLEGEDLY
— AND I SAY ALLEGEDLY — THREATENED TO REMOVE THEM ENTIRELY FROM GOOGLE SEARCH RESULTS.
NOW, CONGRESS CREATED OUR COMMISSION ALMOST 100 YEARS AGO TO STOP UNFAIR BUSINESS PRACTICES.
AND I WON’T SEEK TO CHARACTERIZE GOOGLE’S BEHAVIOR THAT DESCRIBES CONDUCT THAT IS CLEARLY
PROBLEMATIC AND POTENTIALLY HARMFUL TO COMPETITION BECAUSE IT UNDERMINES INCENTIVES TO INNERVATE.
THAT IS WHY WOULD YOU CREATE A NEW SITE FOR RESTAURANT REVIEWS IF SOMEONE ELSE CAN TAKE
THEM AND APPROPRIATE THEM AS IF THEY WERE THEIR OWN? GOING FORWARD, GOOGLE WILL ALLOW
WEBSITES THE ABILITY TO OPT OUT OF GOOGLE LOCAL OR PRODUCT SHOPPING WITHOUT BEING PENALIZED
OR DEMOTING IN ITS GENERAL SEARCH RESULTS ON GOOGLE.COM. THAT IS IT’S ORGANIC SEARCH.
THIS ARRANGEMENT SHOULD ENSURE THAT THE INTERNET REMAINS VIBRANT AND COMPETITIVE. THE COMMISSION
ALSO INVESTIGATED WHETHER GOOGLE INFAIRLY RESTRICTED THE ABILITY OF BUSINESSES TO USE
TOOLS TO MANAGE THEIR ADVERTISING CAMPAIGNS SIMULTANEOUSLY ON GOOGLE AND ON OTHER COMPETING
ADVERTISING PLATFORMS. FOR EXAMPLE, BING. THIS PRACTICE IS KNOWN
AS MULTI-HOMING. OUR INVESTIGATION INSUGGESTED THAT MOST LARGE ADVERTISERS PREFERRED TO MULTI-HOME.
MULTI-HOMING BY SMALL ADVERTISING AND SMALL BUSINESSES AFFECTED BY THE GOOGLE RESTRICTIONS
WAS MUCH LESS COMMON. SOME COMMISSIONERS WERE CONCERNED BY THE TENDENCY OF GOOGLE’S RESTRICTIONS
TO RAISE THE COST TO SMALL BUSINESS AND GOOGLE HAS COMMITTED TO DROP THE RESTRICTIONS ON
MULTI-HOMING. WE THINK THAT WILL CREATE A MORE COMPETITIVE ENVIRONMENT. MANY OF GOOGLE’S
CRITICS INCLUDING MANY COMPETITORS WANTED THE COMMISSION TO GO FURTHER IN THIS INVESTIGATION
AND REGULATE THE INTRICACIES OF GOOGLE’S SEARCH ENGINE ALGORITHM. THE COMMISSION EXHAUSTIVELY
INVESTIGATED ALLEGATIONS THAT GOOGLE UNFAIRLY MANIPULATED SEARCH ENGINE RESULTS TO HARM
COMPETITORS. A PRACTICE THAT MOST OF US REFER TO AS SEARCH BIAS. TODAY THE COMMISSION HAS
VOTED TO CLOSE THIS INVESTIGATION UNANIMOUSLY. IT CAN ALWAYS, OF COURSE, REOPEN ANY INVESTIGATION
IF IT BELIEVES THAT A COMPANY IN THIS CASE GOOGLE CROSSES THE LINE.
WITH RESPECT TO OUR INVESTIGATION. ALTHOUGH SOME EVIDENCE SUGGESTED THAT GOOGLE WAS TRYING
TO ELIMINATE COMPETITION, GOOGLE’S PRIMARY REASON FOR CHANGING THE LOOK AND FEEL OF ITS
SEARCH RESULTS TO HIGHLIGHT ITS OWN PRODUCTS WAS TO IMPROVE THE USER EXPERIENCE. SIMILARLY
CHANGES TO GOOGLE’S ALGORITHM THAT HAD THE EFFECTIVE DEMOTING CERTAIN COMPETING WEBSITES
HAD CONNECTION, APPLAUSABLE CONNECTION, WITH IMPROVING GOOGLE SEARCH RESULTS, ESPECIALLY
WHEN COMPETITORS TRIED TO GAIN GOOGLE’S ALGORITHM IN WAYS THAT BENEFITTED THOSE FIRMS BUT NOT
CONSUMERS LOOKING FOR THE BEST SEARCH RESULTS. I REMEMBER AN ARTICLE FROM “THE NEW YORK TIMES”
MAYBE A YEAR AGO ABOUT J.C. PENNEY PAYING COMPANIES TO DO PRECISELY THIS. NOT COMMENTING
ON THE VALUE OF SEEING J.C. PENNEY ADVERTISEMENTS RANKED HIGHER OR LOWER IN SEARCH RESULTS.
TELLINGLY, GOOGLE’S SEARCH ENGINE RIVALS ENGAGED IN MANY OF THE SAME PRODUCT DESIGN CHOICES
THAT GOOGLE DID SUGGESTING THAT THIS PRACTICE CAN BENEFIT CONSUMERS. NOW, WHILE NOT EVERYTHING
THAT GOOGLE DID WAS BENEFICIAL ON BALANCE, ON BALANCE, WE DIDN’T BELIEVE THAT THE EVIDENCE
SUPPORTED AN FTC CHALLENGE TO THIS ASPECT OF GOOGLE’S BUSINESS UNDER AMERICAN LAW. AS
CHIEF JUSTICE EARL WARREN WROTE MORE THAN 50 YEARS AGO AND AS THE FEDERAL COURTS HAVE
CONSISTENTLY RULED SINCE, THE FOCUS OF OUR LAW IS ON PROTECTING COMPETITION,
NOT COMPETITORS. NOW, GOOGLE IS UNQUESTIONABLY ONE OF AMERICA’S GREAT COMPANIES, INNOVATIVE
IN FIELDING FROM ITS CORE SEARCH ENGINE TO VARIED VENTURES AS DRIVERLESS CARS. WITH TODAY’S
ACTION BY THE FTC, GOOGLE CAN REFOCUS ON ITS BUSINESS AND ITS PRODUCTS, BUT WITH A CLEAR
UNDERSTANDING THAT IT TOO MUST DO SO WHILE COMPETING FAIRLY. NOW, SOME MAY BELIEVE THE
COMMISSION SHOULD HAVE DONE MORE IN THIS CASE PERHAPS BECAUSE THEY’RE LOCKED IN HAND TO
HAND COMBAT WITH GOOGLE AROUND THE WORLD OR PERHAPS IN A MISTAKEN BELIEF THAT CRITICIZING
US WILL INFLUENCE THE OUTCOME IN OTHER JURISDICTIONS. SOME MAY BELIEVE WE SHOULD HAVE DONE LESS.
I IMAGINE GOOGLE IS ONE THAT BELIEVES THAT. BUT FOR OUR PART, AT THIS VERY WONDERFUL AGENCY,
WE FOLLOW THE FACTS WHERE THEY LEAD APPLY OR STATUTE FAITHFULLY. WE¦ DO IT WITH A VIGOR
AND APPROPRIATE RESTRAINT. TODAY’S BIPARTISAN COMMISSION ACTION BRINGS TO AN END THE COMMISSION’S
INVESTIGATIONS OF GOOGLE IN A FASHION CALCULATED TO BRINGS MAXIMUM RELIEF TO AMERICAN CONSUMERS
IN A TIMELY WAY. IT IS GOOD FOR CONSUMERS, IT’S GOOD FOR COMPETITION, IT’S GOOD FOR INNOVATION
AND IT IS THE RIGHT THING TO DO. WITH THAT, RICH, PETE AND HOWARD
WILL TAKE ANY QUESTIONS YOU. HAVE CHUCK, YOU CAN COME UP, TOO, COME ON UP. SO YOU HAVE
ALL OF OUR BUREAUS HERE. THANK YOU. ONE SECOND AND THEN WE’LL TAKE
QUESTIONS. PLEASE IDENTIFY YOURSELF.>>MR. CHAIRMAN, TO WHAT EXTENT, IF ANY, IS THE FACT
THAT YOUR COMMISSION IS ALSO LOOKING INTO GOOGLE AND ANNOUNCE THE RESULTS OF ITS OWN
INVESTIGATION AND WHAT IF THEY WERE TO IMPOSE A STRICTER PUNISHMENT AND THE U.S. — [INAUDIBLE]
>>I’D SAY THIS. WE TALKED TO THE EUROPEANS OFTEN. I SPOKE TO D.G. COMPETITION THIS MORNING.
WE HAVE GREAT RESPECT FOR THE WORK THEY’RE DOING. I THINK THEY’RE MAKING PROGRESS IN
THEIR NEGOTIATIONS WITH GOOGLE. BUT YOU KNOW, WE APPLY OUR OWN LAWS FAITHFULLY. AND WE TRY
TO RESOLVE DISPUTES IN A TIMELY MANNER. NOBODY DESERVES AN UP OR DOWN VOTE FROM THE COMMISSION
BUT EVERYBODY DESERVES A TIMELY RESOLUTION. THIS INVESTIGATION HAS GONE ON FOR 19 MONTHS,
I BELIEVE. AND WE HAD THE OWED — EVIDENCE WE NEEDED. WE DECIDED TO TAKE THE RELIEF THAT
WE DID BECAUSE WE THOUGHT IT WAS GOOD FOR COMPETITION AND CONSUMERS. AND IT’S TIME FOR
EVERYONE TO MOVE ON HERE. I HAVE GREAT CONFIDENCE THE EUROPEANS WILL
FAITHFULLY APPLY THEIR LAWS AS WELL. THERE IS SOME COORDINATION ON PROCESS, I GUESS,
TO GET BACK TO YOUR POINT, PETER, BUT WE APPLIED THE AMERICAN LAW IN THE FTC ACT. THEY
APPLY EUROPEAN LAW.>>MR. CHAIRMAN, JEFF BLISS.
>>HI, JEFF.>>JEFF BLISS. I JUST WANTED TO ASK YOU WHY YOU SOUGHT THE CONSENT DECREE
ON THE SEPs BUT NOT ON THE SCRAPING AND THE MULTI-HOMES. AND THESE ENFORCEABLE LETTERS
ARE THEY GOING TO BECOME MORE OF A PRACTICE GOING FORWARD AT THE FTC?>>IT’S IMPORTANT
TO POINT OUT THAT WE DO HAVE A CONSENT ON STANDARD AND ESSENTIAL PATENTS. EVERY CASE
IS DIFFERENT. IN THE FORMER OF RESOLUTION HERE, ON APIs AND SCRAPING, GIVES CONSUMERS
GREATER RELIEF FASTER THAN THEY OTHERWISE WOULD HAVE GOTTEN. AND AS YOU POINTED OUT,
IT’S COUPLED WITH AN ORDER ON AN IMPORTANT PART OF THE CASE. I ALSO POINT OUT WE DIDN’T
HAVE A COMPLAINT. THERE WAS NO COMPLAINT. THERE WAS NO BASIS FOR AN ORDER. THERE IS
PRECEDENCE FOR DOING THIS. THERE’S A PILLSBURY CASE IN 2002. AND AFTER COMPANIES HAVE MADE
CHANGES TO BUSINESS PRACTICES — REMEMBER, THESE ARE ENFORCEABLE COMMITMENTS. WHEN YOU
MAKE A REPRESENTATION THAT — TO THE POINT AND TO THE
COMMISSION, THAT YOU WILL DO CERTAIN THINGS OR REFRAIN FROM DOING CERTAIN THINGS, IF YOU
STOP — IF YOU THEN DON’T HONOR YOUR COMMITMENT, AND I HAVE NO REASON TO THINK THAT GOOGLE
WILL HONOR THEIR COMMITMENT, I THINK THEY WILL, IT’S ENFORCEABLE.
IT’S A DECEPTIVE ACT OF PRACTICE.>>JUST TO FOLLOW UP, IS THIS GOING TO BE BECOME MORE
OF THE PRACTICE GOING FORWARD?>>EACH CASE IS DIFFERENT. THE FORM OF RESOLUTION IS DIFFERENT.
I THINK THAT — I THINK THIS IS FAIRLY — THIS IS RELATING TO THE UNIQUE CIRCUMSTANCES OF
OUR — OF THE INVESTIGATION. BUT YOU KNOW, AS A GENERAL MATTER, YOU KNOW, WE USUALLY
— AS A GENERAL MATTER, IT’S TRUE, WE DO ORDERS AND WE GENERALLY LIKE THEM. YOU’LL SEE THAT
IN COMMISSIONER STATEMENTS AS WELL. ANYONE WANT TO ADD ANYTHING? GO AHEAD.>>STEVE FRIESE.
POLITICO. LET’S TALK ABOUT THE ENFORCE ABILITY OF THE GOOGLE AGREEMENT. BECAUSE YOU MENTIONED
YOU DON’T IMPOSE FINES AND YOU CAN’T PUT ANYBODY IN JAIL. SO YOU’RE NOT LOOKING OVER THE SHOULDER
OF GOOGLE TO SEE WHAT IS IN THEIR ALGORITHM. HOW WOULD ANYBODY NOW, HOW WOULD YOU BRING
–>>IF YOU LOOK AT THE COMMITMENT LETTER, IT’S ENFORCEABLE. THERE’S MONITORING REQUIREMENTS.
>>MONITORING REQUIREMENTS –>>MONITORING REQUIREMENTS
WITHIN THEIR COMMITMENTS TO US.>>THE FTC WILL BE CHECKING ON GOOGLE’S SEARCH ALGORITHM?
>>THEY’LL MAKE SURE THEIR HONOR THEIR COMMITMENTS ON SCRAPING, ON NOT SCRAPING COMPETITORS — NOT
SCRAPING COMPETITORS DATA.>>WHICH IS SOMETHING YOU CAN SEE ON THE INTERNET.
YOU CAN SEE IF THEY’RE DOING THAT.>>CORRECT. BUT ON SEARCH, IT’S A UNANIMOUS 5-0 VOTE TO
CLOSE A SEARCH INVESTIGATION. AND THE REASON IS, IT DOESN’T VIOLATE THE
AMERICAN ANTITRUST LAWS. IT’S NOT A VIOLATION UNDER THE FTC ACT. SO YES, WE CAN REOPEN IT
IF CIRCUMSTANCES CHANGE AND OF COURSE WE WOULD. BUT THE ANSWER IS, YOU KNOW, YOU HAVE TO AT
SOME POINT YOU HAVE TO RESOLVE YOUR INVESTIGATIONS. EVEN THOUGH A LOT OF PEOPLE WOULD LIKE US
TO BRING A BIG SEARCH BIAS CASE, THE FACTS WEREN’T THERE UNDER THE LAW THAT WE APPLY.
>>I’M SO NOT HEARING HOW YOU ENFORCE THE SO-CALLED VOLUNTARY AGREEMENT IF THERE’S NO
WAY TO CHECK IF THEY’RE DEMOTING PEOPLE OR NOT. IF I’M A COMPANY AND –>>IT’S A VOLUNTARY
AGREEMENT. MAYBE I SHOULD MAKE THIS CLEAR. VOLUNTARY AGREEMENT DOESN’T RELATE TO THE
OVERALL SEARCH BIAS ISSUE. THE OVERALL SEARCH BIAS ISSUE WE’VE RESOLVED. IT’S THEIR SCRAPING
CONTENT OF RIVALS –>>AND THEY SAY THEY DON’T WANT THEM TO.>>WE
WILL KNOW THAT BECAUSE FIRST OF ALL, THOSE RIVALS KNOW HOW TO COME TO THE FTC.
YOU’D BE SURPRISED HOW MANY DID. AND SECOND OF ALL, THEY’RE UNDER MONITORING OBLIGATIONS
AND WE WILL VIGOROUSLY MONITOR.>>HOW? I UNDERSTAND THE PART ABOUT THE SCRAPING.
WHAT I’M SAYING PART OF THIS AGREEMENT IS THAT IF YOU OPT OUT OF BEING SCRAPED, YOU
ARE NOT PENALIZED IN THE SEARCH ALGORITHM.>>WE’LL KNOW. LET ME ASSURE YOU. YOU ARE
— LET ME ASSURE YOU IF THERE’S COMPLAINTS, IF THERE’S COMPLAINTS THAT SOMEBODY OPTED
OUT AND THEY’RE BEING PENALIZED IN VIOLATION OF THE LAW, THEY’LL COME BACK. WE’LL KNOW
THAT. IT’S A GOOD QUESTION. A COMPLICATED ANSWER. YES, SIR.>>JIM WITH THE L.A. TIMES.
WHAT ARE THE PENALTIES? GOOGLE IS OBVIOUSLY A LARGE COMPANY WITH A LOT OF MONEY. COULDN’T
SOME OF THIS JUST BE THE COST OF DOING BUSINESS? WHAT DOLLAR FIGURE, WHAT ARE THE PENALTIES
THAT WILL APPLY TO THEM?>>IF YOU VIOLATION AN ORDER, $16,000 PER VIOLATION. AND VIOLATION
CAN BE DEFINED IN A WAY THAT MULTIPLIES THAT $16,000 VERY, VERY, VERY QUICKLY. AND YOU
KNOW — AND WE HAVE ALSO — IN A PRIVACY CASE PUT
THEM UNDER ORDER AND SANCTIONED THEM FOR VIOLATING THAT ORDER. BUT I HONESTLY THINK, YOU KNOW,
WITH COMPANIES LIKE GOOGLE, THEY WANT TO HONOR THEIR COMMITMENTS. IF THEY DON’T HONOR THEIR
COMMITMENTS, THEY ENTANGLE THEMSELVES WITH RIVALS, COMPETITORS AND LAW ENFORCEMENT AGENCIES
FOR VIOLATING THOSE COMMITMENTS. ANY GREAT AMERICAN COMPANY DOESN’T WANT TO
BE UNDER THAT MICROSCOPE. SO IT IS TO SOME EXTENT A — IT
IS — SO FROM OUR PERSPECTIVE, THERE’S THE POSSIBILITY OF FINES AND THERE’S A POSSIBILITY
OF FURTHER ENFORCEMENT ACTIONS. ANYTHING ELSE? THEY’RE UNUSUALLY SILENT. GENERALLY THEY’RE
CONSTANTLY CORRECTING ME AND — YES.>>ANDY WITH BLOOMBERG.
>>YES, SIR.>>WHY WASN’T THIS RESOLUTION MARKET TESTED? WHY WASN’T THERE A PUBLIC COMMENT
PERIOD?>>THERE WILL BE A PUBLIC COMMENT PERIOD FOR THE STANDARD AND ESSENTIAL PATENTS.
WE ALWAYS DO THAT. IT’S A 30-60-DAY COMMENT PERIOD.
30-DAY COMMENT PERIOD. ON THE RESOLUTION WITH RESPECT TO SCRAPING AND APIs, WHICH IS PROBABLY
WHAT YOU MEAN, BECAUSE THERE WASN’T A COMPLAINT. YOU KNOW, WE DIDN’T HAVE A COMPLAINT, SO THERE’S
NO BASIS FOR A TRADITIONAL ORDER. EVERY ONE KNOWS — BY THE WAY, EVERYONE WHO HAS CONCERNS
ABOUT SCRAPING AND APIs, YOU KNOW, KNOWS PRECISELY WHAT IS IN THIS AGREEMENT,
RECOGNIZES THAT IT’S ENFORCEABLE. THERE MAY BE SOME FOLKS WHO HAVE — THERE MAY BE SOME
FOLKS THAT ARE COMPLAINANTS THAT — TO THE FTC OR TO, YOU KNOW, REPORTERS IN THIS ROOM.
AT TIMES IT’S PARTICULARLY A COUPLE WEEKS AGO, IT WAS AN ANTI TRUST SPIN ZONE WHO HAVE
OTHER THINGS THAT THEY WOULD LIKE TO SAY OR OTHER POINTS THEY WANT TO MAKE. EVERYONE UNDERSTANDS
THAT THE API RESTRICTIONS ARE BEING DROPPED AND THERE WILL BE NO RETURN TO WHAT WE BELIEVE
TO BE THE PROBLEMATIC SCRAPING. YES, SIR.>>I’M CRAIG TIMBER WITH “THE WASHINGTON POST.”
SO MOST OF THE COMPLAINTS YOU HEAR FROM CONSUMER GROUPS AND OTHER MEMBERS OF THE INDUSTRY HAVE
TO DO WITH SEARCH BIAS. I’M JUST GUESSING A FAIR NUMBER OF THOSE GROUPS WILL SAY TODAY,
WELL, BY UNANIMOUSLY CLOSING WHAT THEY PERCEIVE TO BE THE HEART OF THE CASE THAT GOT THIS
ROLLING, THEY’RE GOING TO EXPRESS CONCERN AND QUITE SURE THAT GOOGLE WILL FEEL EMBOLDEN.
YOU SAID YOU FOUND SOME EVIDENCE OF SEARCH MANIPULATION ON BUT ON BALANCE IT WASN’T ENOUGH
TO MERIT AN ACTION BY THE COMMISSION. I’D BE INTERESTED IN HEARING YOUR THOUGHTS ON
WHETHER THERE’S A DANGER THAT A COMPANY THAT WASN’T INVESTIGATED A LONG PERIOD OF TIME,
WHERE THE ALLEGATIONS WERE TAKEN SERIOUSLY. THAT THERE’S A DANGER THAT COMPANY WILL FEEL
LIKE THEY’RE OFF THE HOOK, THEY CAN CONTINUE TO PUSH THE LINE IS THAT –>>I DON’T THINK
THEY WILL FEEL LIKE — GOOD QUESTION. I DON’T THINK THEY’LL FEEL LIKE THEY’RE OFF THE HOOK.
AGAIN, FROM OUR PERSPECTIVE — LOOK, ANYONE THAT IS IN THE BUSINESS OF BEING THE CHAIRMAN
OF THE ANTITRUST ENFORCEMENT AGENCY, YOU KNOW, WOULD LIKE TO BRING “THE BIG CASE.” THAT’S
SOMETHING YOU WANT TO DO. MORE IMPORTANT THAN THAT, IS THE FAITHFULLY EXECUTE THE LAW. YOU
KNOW, WE FOUND UNANIMOUSLY THAT THERE WASN’T — THAT THEY HADN’T — THAT THEIR — THAT
THEY HADN’T ENGAGED IN THE LEGAL MONOPOLIZATION AND HAD NOT VIOLATED THE FTC ACT, ACTUALLY.
SO I DON’T THINK — I DO BELIEVE THAT COMPANIES, YOU KNOW — COMPANIES LIKE GOOGLE RECOGNIZE
THAT, YOU KNOW, YOU DON’T WANT TO GET IN TROUBLE AGAIN FROM AN AGENCY THAT KNOWS YOUR COMPANY
REALLY WELL. AND SO, YOU KNOW, MY SENSE IS — IT’S AN INTERESTING QUESTION. WE’LL HAVE
TO WAIT AND SEE. OBVIOUSLY WE HAD THEM UNDER ORDER FOR WHAT THEY THINK IS A VERY IMPORTANT
PART OF THE CASE, THE STANDARD AND ESSENTIAL PATENTS AND THEY MADE LEGALLY AND ENFORCEABLE
COMMITMENTS ON SCRAPING AND ON APIs. OF COURSE, IF THEY CHANGE THEIR PRACTICES AND CROSS THE
LINE, COMMISSION CAN COME BACK AND REOPEN AN INVESTIGATION. SO THAT’S WHAT WE DO. WE
HOPE NOT TO HAVE TO.>>KIRK VICTORED WITH THE FTC WATCH. HAVING
HAD A UNANIMOUS VERDICT HERE, WOULD YOU SAY THE JUSTICE DEPARTMENT SHOULD NOT PURSUE AN
INVESTIGATION?>>I THINK WE WORK THOSE THINGS OUT BETWEEN
OURSELVES AND THE JUSTICE DEPARTMENT. I DON’T BELIEVE THAT’S A
SERIOUS — I DON’T BELIEVE THAT THAT’S — THAT THOSE PEOPLE THAT HAVE RAISED THOSE ISSUES
REALLY BELIEVE THEM TO BE SERIOUS. REALLY DON’T BELIEVE THAT TO BE A SERIOUS POSSIBILITY.
IT WON’T BE. BY THE WAY, I BELIEVE THAT BILL BEAR IS BEING SWORN IN TODAY AS THE HEAD OF
THE ANTITRUST DIVISION. HE WILL BE A TERRIFIC HEAD OF THE ANTITRUST DIVISION AND WE’RE DELIGHTED
TO START WORKING WITH HIM. YES, MA’AM.>>I HAD A QUESTION ON THE SEP CASE. YOU ALL ARE
INVESTIGATING SEPs, THE JUSTICE DEPARTMENT IS AS WELL, BUT YOUR STATEMENT SEEMS TO IMPLY
THAT YOU THINK THAT THE FTC IS THE BETTER AGENCY TO INVESTIGATE THOSE BECAUSE OF ITS
SECTION 5 AUTHORITY. I MEAN, DO YOU THINK THAT’S A FAIR ASSESSMENT?>>NO. I THINK I
THE JUSTICE DEPARTMENT IS TERRIFIC AT INVESTIGATING THESE ISSUES BECAUSE THEY’RE REALLY A WONDERFUL
AGENCY. THE ANTITRUST DIVISION IS VERY COMPETENT. I DO THINK — IF YOU LOOK AT SUPREME COURT
DECISIONS THE LAST 20 YEARS, I THINK 16 OUT OF 17 HAVE BEEN DECIDED
FOR THE DEFENDANTS. I THINK PART OF THAT IS THEY’RE VERY CONCERNED ABOUT PRIVATE TREBLE
DAMAGE LITIGATION. AND WE HAVE A UNIQUE STATUTE TO WHICH WE GET
WHAT IS KNOWN AS CHEVRON DEFERENCE TO STOP UNFAIR COMPETITION.
AND IT IS CONCEIVABLE GOING FORWARD THAT THIS WILL BE THE MORE FLEXIBLE STATUTE AND THIS
WILL BE A STATUTE THAT ALLOWS US TO STOP ANTI-COMPETITIVE CONDUCT AS WE’RE SUPPOSED TO DO.
NO, NO, NO. I THINK THE JUSTICE DEPARTMENT IS EXCEEDINGLY COMPETENT AT DOING THOSE TYPES
OF INVESTIGATIONS. WE HAVE A GREAT RELATIONSHIP WITH THEM. QUESTIONS FROM THE PHONE.>>THANK
YOU. LADIES AND GENTLEMEN, ON THE PHONE LINES AT THIS TIME, WE’LL TAKE QUESTIONS FROM THE
PRESS ONLY. IF YOU ARE WITH THE PRESS, YOU WANT TO ASK QUESTIONS, PRESS STAR AND ONE.
WE’LL START OFF WITH THE LINE OF IAN THOMPSON FROM THE REGISTER.>>THANKS. JUST TO CHECK.
YOU SAID YOU FOUND SOME EVIDENCE OF SEARCH MANIPULATION. CAN YOU GO INTO ANY MORE DETAIL
ON THAT?>>I THINK I WOULD SAY READ THE STATEMENTS OF THE COMMISSIONERS AND READ THE ANALYSIS
TO ANY PUBLIC COMMENT THAT WAS ADDRESSED BY THE STAFF. IT’S VERY GOOD.
AS FOR PARTICULAR ITEMS OR PIECES OF DATA, THAT REMAINS CONFIDENTIAL. IT’S THE EVIDENCE
THAT THE COMMISSION TOOK A LONG TIME TO CAREFULLY WEIGH BEFORE IT MADE ITS DECISION.
>>OKAY. THANK YOU.>>THANK YOU. NEXT WE’LL GO TO THE LINE OF MIKE FROM THE ASSOCIATED
PRESS. PLEASE GO.>>I WAS WONDERING HOW THIS INVESTIGATION WAS AFFECTED BY THE FAST CHANGES
THAT ARE HAPPENING IN THE SEARCH MARKET. GOOGLE CHANGES THEIR ALGORITHMS ABOUT 500 TIMES A
YEAR. SO THEY MAY BE DOING ONE THING ONE WEEK AND SOMETHING DIFFERENT THE NEXT WEEK. WAS
THAT A FACTOR IN TRYING TO — IN THIS INVESTIGATION IN CLOSING THIS SEARCH BIAS?>>I WOULD SAY
IT WAS A FACTOR IN THE SENSE THAT WE RECOGNIZE ITS A VERY DYNAMIC INDUSTRY. AND YOU WANT
TO BE CAREFUL BEFORE YOU APPLY SANCTIONS. SO WE CAREFULLY WEIGH THE EVIDENCE AND DETERMINED
WHERE WE WANTED TO TAKE RELIEF AND WHERE WE DID NOT. DOES ANYBODY WANT TO ADD ANYTHING?
PETE, COME UP AND ADD SOMETHING.>>HELLO. ONE THING WE DID DO, WE HAD OUR CHIEF TECHNOLOGIST
VERY INVEST IN THE INVESTIGATION. HE WAS HELPFUL. IT WAS ED FELTON. HE FIGURED OUT WHAT WAS
GOING ON IN THE MARKET. AS JON SAID, WE WERE AWARE THAT
THE MARKET WAS CHANGING QUICKLY. THE OVERALL RULES AND OVERALL LAWS WE APPLY ARE THE SAME
IN ANY INDUSTRY. DIDN’T HAVE AN IMPACT IN THAT SENSE.>>ALSO
TO SAY, WE WERE REALLY — GLAD YOU MENTIONED THAT.
WE’VE BEEN FORTUNATE TO HAVE ED FELTON WHO IS BACK TEACHING AT PRINCETON WHO IS THE FIRST
CHIEF TECHNOLOGIST. HE’S WORK HAS BEEN INVALUABLE
ON ISSUES LIKE THIS ONE.>>WHEN YOU SAY THE PHONE, YOU POINT TO THE CEILING. IT’S CONFUSING.
>>OKAY. WE’LL GO TO THE LINE OF SUSAN KENNEDY FROM KCBS. PLEASE GO AHEAD.>>THANKS VERY
MUCH. I WAS WONDERING ABOUT THE NUMBER OF COMPLAINTS THAT YOU RECEDE. YOU SAID YOU RECEIVED
QUITE A FEW . CAN YOU GIVE US A NUMBER?>>NO, I DON’T THINK I CAN. RICH, CAN WE GIVE THEM
A NUMBER?>>I DON’T KNOW WHAT IT WOULD BE IF WE COULD. IT’S MANY.>>MANY. THAT REMAINS
CONFIDENTIAL, UNLESS IT’S IN ONE OF THE COMMISSIONER’S STATEMENTS.>>THANK YOU.>>IT WAS NOT JUST
ONE OR TWO PEOPLE WANDERING IN OFF THE STREET.>>THANK YOU. WE HAVE A QUESTION FROM THE
LINE OF DAVID HADER FROM THE SUN SENTINEL. PLEASE GO AHEAD.>>I WAS WONDERING, DID THE
FTC INVESTIGATE GOOGLE’S APPLICATIONS LAST YEAR MORE FOR MORE THAN 100 NEW GTLE DOMAINS
IN THEY DOMINATE THE SEARCH MARKET AND THEY APPLIED FOR DOMAIN EXTENSIONS .SHOP,.BUY.
THESE WILL BE FOCUSED AROUND INTERNET COMMERCE. OTHER COMPANIES LIKE MICROSOFT AND YAHOO,
FOR EXAMPLE, DIDN’T APPLY FOR THESE COMMERCIAL GENERIC TERMS AS OPPOSED TO PEOPLE THAT DID.
>>YOU CAN TALK TO OUR STAFF. WE HAD BEEN VERY WORRIED ABOUT ICAN AND THEIR DRAMATIC
EXPANSION OF DOMAIN NAMES WHICH WILL CAUSE CONSUMER CONFUSION AND EVEN WORSE LEAD TO
MORE AREAS WHERE MALAFACTORS CAN HIDE FROM THE LAW WHILE DEFRAUDING CONSUMERS. THAT’S
AN ON GOING CONVERSATION WE’VE HAD WITH ICAN AND OTHER SISTER LAW ENFORCEMENT AGENCIES.
WITHOUT KNOWING THE DETAILS OF THEIR PURCHASE OF DOMAINS, I KNOW THAT THEY’RE STILL — ICAN
IS STILL WORKING THROUGH COMPETING — SORT OF WHO ENDS UP GETTING WHAT. FOR THE MOST
PART, I CAN’T SPEAK TO GOOGLE BUT A LOT OF THE COMPANIES THAT HAVE PLUNKED DOWN — $185,000
PER DOMAIN NAME. THERE’S BEEN HUNDREDS OF COMPANIES THAT HAVE DONE IT HAVE DONE IT FOR
DEFENSIVE PURPOSES. YOU’RE WELCOME TO TALK TO STAFF. WE’RE NOT LOOKING AT THAT ISSUE
WITH RESPECT TO GOOGLE. WE’RE LOOKING AT THAT WITH RESPECT TO ICAN.
>>THANK YOU. AND WE HAVE TIME FOR ONE MORE QUESTION AND THAT WILL COME FROM THE LINE
OF MITCHELL QUINN FROM POLITCO. PLEASE GO AHEAD.>>HI. THANKS SO MUCH. MY QUESTION
IS — I’M LOOKING FOR THE DOCUMENTS RIGHT NOW. HAS GOOGLE OR IS GOOGLE SAYING THEY’RE
GOING TO WITHDRAW THEIR CASES AT THE ITC? AS YOU KNOW, THE ITC’S ONLY REMEDY IS DO BLOCK
PRODUCTS COMING INTO THE UNITED STATES.>>YES, THEY’RE CERTAINLY — THEY SHOULD BE. I SHOULD
HAVE MENTIONED THIS EARLIER. I BELIEVE THEY WILL BE POSTING THEIR COMMITMENT LETTER TO
US AND THAT THEY’LL HAVE AS THEY USUALLY DO A BLOG WRITTEN BY A SENIOR EXECUTIVE, PROBABLY
THE CHAMPIONSHIP LEGAL OFFICER. MIGHT BE UP BY NOW. IT IS. THAT WE’LL TALK ABOUT THIS,
BUT YES, MY UNDERSTANDING IS THEY WILL BE — THEY’RE GOING TO STOP TRYING TO SEEK THE
INJUNCTION OR THE EXCLUSION ORDER AT THE I.T.C.>>I’D LIKE TO GET TWO MORE QUESTIONS. FIRST
OF ALL, YOU SAID A FEW MINUTES AGO THAT YOU — THAT YOU CAN SEE NO REASON — YOU HAVE
NO REASON TO THINK THAT GOOGLE WON’T FULFILL ITS PROMISES. IT WASN’T MORE THAN MAYBE A
MONTH OR SO AGO THAT THE FTC HAS TO FINE GOOGLE FOR A 20-YEAR AGREEMENT REGARDING PRIVACY.
ISN’T THIS A GOOD REASON TO BE CONCERNED ABOUT WHETHER GOOGLE WILL FULFILL
ITS PROMISES TO YOU?>>I WOULD SUPPOSE AT SOME LEVEL WE’RE IN A TRUST BY VERIFY MODE.
ON THE OTHER HAND, THEY DON’T — WE’VE HAD A LOT OF TALKS WITH SENIOR GOOGLE EXECUTIVES.
I DON’T THINK THEY WANT TO GO THROUGH THAT AGAIN. I WANT TO BELIEVE THE BEST ABOUT PEOPLE
AND COMPANIES, THAT THEY WILL HONOR THEIR COMMITMENTS. IF THEY DON’T, THEN, YOU KNOW,
WE WILL BE BACK WHERE WE STARTED AND I DON’T THINK ANYONE WANTS TO BE THERE. IF WE HAVE
TO, WE WILL.>>THERE’S BEEN A LOT OF DISCUSSION THAT YOU WANTED TO SUM UP THIS CASE BEFORE
YOU YOURSELF DECIDED TO STEP DOWN FROM YOUR POSITION. IS THAT TRUE? HOW DO YOU REACT?
>>I LOVE WORKING AT THE FEDERAL TRADE COMMISSION. AND I CERTAINLY WANTED TO GET THROUGH A VARIETY
OF MATTERS, AND I’M CONTINUING TO DO THAT. WHEN 2013 COMES — IT HAS ALREADY — I’LL
THINK ABOUT NEXT STEPS. BUT I LOVE THIS JOB, I LOVE MY COLLEAGUES. YOU KNOW, THEY WERE
INCREDIBLY — THE STAFF DID JUST REMARKABLE JOB IN UNDERSTANDING — LEARNING TO UNDERSTAND
THIS INDUSTRY, IN WORKING WITH — IN WORKING THROUGH GOOGLE DOCUMENTS AND UNDERSTANDING
THE CONCERNS OF COMPLAINANTS. THE COMMISSIONERS, WE HAD HOPED TO ACTUALLY WRAP THIS UP A FEW
WEEKS AGO AND THE COMMISSIONERS WERE SORT OF DETAILED IN THEIR REVIEWING OF THE DOCUMENTS.
WE HAD MULTIPLE COMMISSION MEETINGS. SO YOU KNOW, WE’LL SEE WHAT THE FUTURE BRINGS.
I’M JUST REALLY HAPPY THAT WE HAVE CONCLUDED THIS CASE IN THE WAY REQUIRED BY LAW.
>>THAT’S IT.>>THANK YOU ALL FOR COMING.