One day later and the tech world is still buzzing over the Federal Trade Commission's decision to end its antitrust probe after finding that Google did not abuse its dominance in the search market by highlighting its own products. While the agency did secure some voluntary commitments (pdf) from Google not to use its smartphone patents to stifle competitors or scrape information from other websites on its local search results, the FTC found Google's changes to its search results did not harm consumers, and declined to intervene on behalf of competitors such as Microsoft. The decision will undoubtedly have a long-term impact on both the search market and broader Internet, as regulators declined to step and in and define the search market in a way that would potentially limit the ability of search operators and other websites to offer integrated services beyond their core functions.
The post-mortems have already begun and they are predictable: Google learned the lessons of the Microsoft trial, hit Washington early, and spread enough money around to ensure it had friends when it needed them. Google has been spending freely on K Street, doubling its lobbying contributions this year after doing the same last year, but that is only half the story. While Google has not been as openly disdainful of Washington and regulators as Microsoft was in the '90s, the search giant only began lobbying at current levels two years ago when rumors of the antitrust probe first began to surface. Rather, Google's new-found influence is evidence of just how quickly it is possible to make friends in Washington, especially for an economically dynamic company with deep pockets. Even so, there were no shortage of lawmakers emerging to criticize the FTC for not taking further action, most notably Senate Judiciary Chairman Patrick Leahy, D-Vt., and Antitrust subcommittee ranking member Mike Lee, R-Utah. Connecticut Democrat Sen. Richard Blumenthal, an emerging privacy hawk, also expressed caution and continued vigilance with regard to Google's business practices.
In addition to reflecting Google's spreading influence, the FTC's decision not to take harsher action against Google shows the government has also learned some lessons from the Microsoft trial. The government's case against Microsoft hinged on defining the Web browser market as independent from operating systems, and opened the door for competitors like Google to emerge as dominant players on the Web. But the interim years have seen rapid evolution in technology re-shape the competitive landscape of the Internet at a far greater pace than any regulator could achieve. Government officials have rightly recognized that the pace of regulation lags far behind the Internet's capacity for disruption, and that a judgment against Google might address some short-term concerns at the cost of long-term competition. Few lawmakers also care to see Google go the way of Microsoft, which remains massive enterprise but is no longer viewed as a font of innovation as it once was. Google's brand might have taken a hit in recent years, but the company's appeal on the Hill remains strong.
Unlike Microsoft, which had something of a target painted on its back by the time the feds took action, no one wants to be the one to tarnish Google's brand, at least not yet. How the company conducts itself going forward on issues like privacy and patent litigation will have a lot to do with whether the feds decide to take another look at Google's core business, but for now the search giant has won a clear victory, and looks like a force to be reckoned with in Washington for years to come.
ICYMI: The text of Department of Justice Deputy Assistant Attorney General for the Antitrust Division Fiona Scott's December 7th speech on antitrust enforcement in high-tech industries. (pdf) Documents Confirm Secret Cybersecurity Program to Protect Power Grid: New documents handed over by the government to the Electronic Privacy Information Center in response to a 2010 FOIA request reportedly confirm the existence of a secret National Security Agency program designed to protect the U.S. power grid from a sophisticated cyber attack. The program, dubbed Perfect Citizen, was first revealed in 2010 by the Wall Street Journal. The documents show the program involved hiring 28 personnel, including two penetration testers, to discover vulnerabilities in the software that connects various utility company networks and find solutions to plug the security holes. Raytheon, which was awarded a five-year, $91 million contract in 2009, has been responsible for conducting the operation. The existence of such a program is likely to draw criticism from privacy advocates, concerned about the NSA monitoring legitimate Web activity. The government is also treading on uncertain legal ground, as there are currently few laws that govern how much action NSA and other spy agencies can take with regard to domestic cybersecurity. Blackburn Wants Overhaul of Telecom Law: The newly designated "vice chairwoman" of the House Energy and Commerce Committee, Tennessee Republican Marsha Blackburn, called for an overhaul of telecommunications law and the scaling back of regulations on the wireless industry, during a speech on Thursday. Blackburn plans to use her informal position to push for an agenda that curbs recent FCC regulations, specifically the commission's net neutrality rules, which are currently facing legal challenges in federal court. Blackburn argued the current laws are designed for the antiquated wireline phone system and do not address innovations in broadband and Internet technology. The FCC has pushed broadband and wireless expansion as its primary goal during President Obama's first term, mainly by subsidizing rural broadband carriers and freeing up spectrum for wireless firms. However, the commission has not seriously discussed a broadband mandate that would resemble the universal service concept for home phones. The Economist: Can Internet Activism Turn Into A Real Political Movement? Roll Call's Emily Cahn reports more lawmakers are using social media to interact with their constituents. If you'd like to join them, simply follow your Tech EB editor on Twitter: @gnagesh.