Dem warns FTC against suing Google

By Brendan Sasso -

Rep. Jared Polis (D-Colo.) is warning the Federal Trade Commission that a lawsuit against Google would be disastrous and could prompt Congress to limit the agency's authority.

"I believe that application of anti-trust against Google would be a woefully misguided step that would threaten the very integrity of our anti-trust system, and could ultimately lead to Congressional action resulting in a reduction in the ability of the FTC to enforce critical anti-trust protections in industries where markets are being distorted by monopolies or oligopolies," Polis wrote in a letter sent last week to FTC Chairman Jon Leibowitz and obtained by The Hill on Monday.

Polis argued that the market for online search is already fiercely competitive. He noted that customers search Amazon for shopping results, iTunes for music and movies, Facebook for social networking and Yelp for local businesses.

"To even discuss applying anti-trust in this kind of hyper-competitive environment defies all logic and the very underpinnings of anti-trust law itself," Polis wrote.

The FTC is nearing the end of a sweeping antitrust investigation into Google's business practices. People familiar with the case say the commissioners are leaning toward taking action against the company.

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The agency is investigating whether Google manipulates its search results to ensure that its own services, such as YouTube, Google Maps and Google Plus, appear above those of its rivals.

Google's competitors argue that the company shouldn't be allowed to use its dominant search engine — which has about a 65 percent market share — to stifle competition.

The company says there is nothing unfair about its search rankings. Even if the results did boost Google products, the company says, it wouldn’t be illegal.

Before being elected to Congress, Polis founded several online businesses, including ProFlowers.com. Polis argued that search engines have helped small businesses tap into new markets and find new customers, bolstering competition.

"As a high-tech entrepreneur and someone who has actually used Google’s advertising tools to grow my businesses, I encourage the Commission to tread carefully and not undertake action that would compromise the important service provided by Google, reduce Google’s ability to rapidly innovate and improve its products, or make search engine results less useful for consumers or businesses," he wrote.

Polis compared a potential antitrust case against Google to the fight earlier this year over controversial anti-piracy legislation. Congress pulled the anti-piracy bills after thousands of websites blacked out in protest, sparking an explosion of voter anger over the issue. Polis said the protest showed that when policymakers try to over-regulate Internet content, consumers will revolt.

"By the same token, the FTC should tread carefully when reviewing Google, Facebook, Twitter or any other tech company, given the dynamism of our tech industry and the potential for making things worse through regulation," he wrote.

He noted that just a few years ago many people called AOL, MySpace and Yahoo "dominant" — but today all three companies are struggling to retain online customers.

"Today’s giant can be tomorrow’s failure without any government intervention," he wrote.

He argued that because the online marketplace is so dynamic and competitive, regulators are likely to do more harm than good if they try to intervene.

"Given how easily consumers can switch to a new service with just one click, regulators should be wary of intervening in the tremendous competition online," Polis wrote.