The Federal Trade Commission is raising the ante in its antitrust confrontation with with the commission staff preparing a recommendation that the government sue the search giant.
The government's escalating pursuit of Google is the most far-reaching antitrust investigation of a corporation since the landmark federal case against Microsoft in the late 1990s. The agency's central focus is whether Google manipulates search results to favor its own products, and makes it harder for competitors and their products to appear prominently on a results page.
The staff recommendation is in a detailed draft memo of more than 100 pages that is being shared with the five F.T.C. commissioners, said two people briefed on the inquiry.
The memo is still being edited and changes could be made, but these are mostly fine-tuning and will not alter the broad conclusions reached after an inquiry that began more than a year ago, said these people, who spoke on the condition that they not be identified.
Google said in a statement on Friday, “We are happy to answer any questions that regulators have about our business.†In the past it has said many times that “competition is a click away.â€
The commission is also building a team to take Google to court, if it comes to that. Last spring, it hired a seasoned litigator to help with the case, Beth A. Wilkinson, a partner in the firm Paul, Weiss in Washington. In a further sign that it means business, last week it brought on a well-known economist as a consultant: Richard Gilbert of the University of California, Berkeley.
The F.T.C. staff memo does not mean that the government will sue Google for antitrust violations. Next, the vote of three of the five F.T.C. commissioners would be required. And each step is a further prod for Google to make concessions to reach a settlement before going to court. Last month, Jon Leibowitz, chairman of the F.T.C., said a final decision on whether to sue Google would be made before the end of this year.
The Google investigation echoes the Microsoft case in a basic way. Google, like Microsoft in the personal computer industry, has drawn complaints from rivals and antitrust regulators as it has expanded its business beyond its dominant product, search and search advertising. Google has aggressively built off this main business to fields including online commerce and smartphone software.
As it expands its empire, Google takes on new competitors and brings formidable resources. Rivals may suffer, Google says, but the company is improving its products and services, benefiting consumers and the economy.
The American inquiry is moving in tandem with a major antitrust investigation in Europe. The European authorities are pressing ahead and seeking changes in Google's behavior.
Speaking in New York last month, JoaquÃn Almunia, the European Union's competition commissioner, pointed to antitrust regulators' concerns that Google is “using its dominance in online search to foreclose rival specialized search engines and search advertisers.â€
Google is also being investigated by the attorneys general of six states: Texas, Ohio, New York, California, Oklahoma and Mississippi.
Given the momentum of the investigations, antitrust experts say, the F.T.C. staff recommendation was to some extent expected.
The F.T.C. investigators have looked at a wide range of Google's business practices, according to companies that have been questioned and received subpoenas from the agency.
The areas of inquiry include accusations of manipulating the search results it displays to favor Google commerce services it has developed like Google Shopping for buying goods and Google Places for advertising local restaurants and businesses. In the civilian subpoenas, the F.T.C. calls this “preferencing.â€
The investigators are also looking into whether Google's automated advertising marketplace, AdWords, discriminates against advertisers from competing online commerce services like comparison shopping sites and consumer review Web sites.
