Back in 2011, the Federal Trade Commission (FTC) launched an antitrust investigation against Google. As the search engine’s power grew, so too, did government scrutiny of its vast influence over technology. The FTC concluded that Google employed anticompetitive measures and took advantage of its monopoly to destroy competition and indirectly hurt consumers — yet Google got off with a light slap on the wrist, nothing more. The lawsuit was settled, and charges of wrongdoing and monopoly dismissed.
At the time, it was unclear why the lawsuit against Google was dismissed so quickly, but in mid-March, a series of White House visitor logs and emails obtained by the Wall Street Journal detailed the astounding 230 meetings that took place between top-level members of the White House and Google executives since President Barack Obama took office in 2009. One of Google’s top lobbyists, Johanna Shelton, met with the White House more than 60 times.
The cozy relationship Google cultivated with Obama’s White House hints that Google sweet talked its way out of trouble.
The subject of these meetings is not documented, though the Journal’s sources indicate that the top subject of discussion in 2011 and 2012 was the antitrust lawsuit leveled by the FTC against Google.
The high number of White House visits and the cozy relationship Google cultivated with Obama, through sizable campaign donations, assistance with voter turnout software, and help fixing healthcare.gov, seem to hint that Google sweet talked its way out of trouble, the Journal said. The report also points to frequent mentions of Google in the president’s State of the Union addresses to demonstrate the kind of relationship the president has with the company.
Updated on 03-30-2015 by Malarie Gokey: Added news that the Senate will investigate the FTC’s dismissal of the antitrust lawsuit against Google. Also added statements from the FTC and Google.
Senators investigate claims of interference in the probe
Shortly after the article was published, Utah Republican Sen. Mike Lee, who is the chairman of the Senate Judiciary’s Antitrust Subcommittee, stated that the Senate will investigate claims that the White House interfered with the FTC’s investigation into Google’s tactics.
“In short, we are interested in how the FTC allowed a confidential report to be disclosed, and second, what conversations, if any, the FTC or Google had with the White House about the pending investigation,” Lee’s spokesperson, Emily Long, said in a statement to the National Journal. “We are not likely at this time to re-examine the underlying merits of the investigation, which was closed. Our interest is in oversight.”
The subcommittee is still looking into the matter, and has yet to plan a hearing on the subject, Long added.
“We look forward to discussing these matters with Sen. Lee’s office,” FTC spokesman Justin Cole said, after the Senator made its current investigation public.
The FTC argues that “not a single fact is offered to substantiate this misleading narrative.”
However, despite the FTC’s willingness to discuss the matter, the agency is undoubtedly stirred up about the claims. The Wall Street Journal’s report “makes a number of misleading inferences and suggestions about the integrity of the FTC’s investigation,” Chairwoman Edith Ramirez and Commissioners Julie Brill and Maureen Ohlhausen said in a statement.
“The article suggests that a series of disparate and unrelated meetings involving FTC officials and executive branch officials or Google representatives somehow affected the Commission’s decision to close the search investigation in early 2013. Not a single fact is offered to substantiate this misleading narrative,” the statement continued.
An uncharacteristically biting retort from Google itself also claims that the Journal’s report is unfounded. The blog post, which is addressed to Rupert Murdoch, the owner of the Wall Street Journal and News Corp., the news organization with which Google has a feud, takes issue with the article’s facts. It also contains two GIFs that are used to mock the report.
“We understand you have a new found love of the regulatory process, especially in Europe, but as the FTC’s Bureau of Competition staff concluded, Google has strong pro-competitive arguments on our side. To quote from their report ‘… the record will permit Google to show substantial innovation, intense competition from Microsoft and others, and speculative long-run harm,'” wrote Rachel Whetstone, Google’s Senior Vice President of Communications and Policy.
Google, the White House, and FTC defend the first ruling
Of course, both Google and the FTC argue that the settlement was reached so quickly not because Google cozied up to the White House, but because Google addressed its concerns and the evidence in the case didn’t incriminate the company.
Jennifer Friedman, a White House spokeswoman, told the Journal that the FTC “is an independent agency and we respect their independent decision-making.”
Co-founder Larry page met with the FTC one day, and settlement talks began the next.
She also said that the White House didn’t interfere in the FTC matter, but rather talked with Google abut other pressing concerns.
“White House officials meet with business executives on a range of issues on a regular basis. These meetings help keep the White House apprised of outside perspectives on important policy issues,” she said. “Our staff is cognizant that it is inappropriate to discuss issues relating to regulatory enforcement.”
Justin Cole, an FTC spokesman, confirmed her statement with the following missive: “The FTC is an independent law enforcement agency. Its enforcement decisions are driven by the applicable law and evidence in each case.”
For its own part, Google said it has lobbyists for the same reason that everyone else does, and there’s nothing nefarious about its behavior.
“We think it is important to have a strong voice in the debate and help policy makers understand our business and the work we do to keep the Internet open, to build great products, and to fuel economic growth,” said Google spokeswoman Niki Christoff.
Doubts still linger over the probe’s abrupt end
In spite of all Google’s and the FTC’s assurances that the huge number of meetings and the giant increase in lobbying around the time of the investigation were just coincidental, the numbers show a different story.
In 2014, Google spent $16.8 million on lobbyists, which is almost as much as Comcast spent and more than what every other company shelled out, according to lobbying disclosures. To make matters worse, Google didn’t have much of a lobbying presence before 2010, which is around the time the FTC’s antitrust investigation started. Based on numbers from the Center for Responsive Politics, Google’s lobbyist spending has tripled since then, and Google has around 100 lobbyists at 20 different lobbying firms on its side.
The Journal even goes so far as to map out the events chronologically to show that after every high-profile meeting between either the White House or the FTC with Google, things began to go in Google’s favor. Co-founder Larry page met with the FTC one day, and settlement talks began the next, emails and visitor logs reveal. In the end, Google avoided being labeled a monopoly and the possible destruction of its entire business model.