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Google agrees to modifications to its patent lawsuit strategy, how it handles online data

After nearly two years of investigation, the U.S. Federal Trade Commission's (FTC) probe into internet and mobile services giant Google Inc. (GOOG) is about to wrap up, and Bloomberg is reporting that a settlement has been reached which will protect Google against possible fines.

I. Google Says it Will Change Its Ways

Importantly Google agreed to undisclosed changes in how it uses patents for mobile standards, which are licensed under so-called "fair, reasonable, and non-discriminatory" (FRAND) rules.  Most of Google's FRAND patents came courtesy of subsidiary Motorola Mobility, which Google acquired for $12.5B USD in a denial finalized in Feb. 2012.  

Google had hoped to use Motorola patents to defend its Android partners against Apple, Inc.'s (AAPL) and Microsoft Corp.'s (MSFTaggressive litigation tactics, but those efforts proved largely unsuccessful and came under fire when it became clear that much of Motorola's portfolio were FRAND patents, which come with obligatory licensing demands.

web scraping
Among its promises, Google promises to be be more respectful of others data when web scraping. [Image Source: Google Images/unknown]

The search giant also reportedly agreed to modify other undisclosed business practices; practices that may include making modifications to make Google's search engine less prone to favoring its own internal services.  Google had balked at the idea of letting federal regulators lay their hands on its core search engine code, and ultimately regulators at the FTC appeared to respect Google's concerns, in lieu of its promised concessions.

Reportedly, Google will also modify its so-called "scraping" tactics -- the process of sending scripts to automatically mine data from various internet sites and services, some of which compete with Google.  Another promised modification, according to Bloomberg, is to make it easier for companies to export advertising data from Google's industry-leading advertising platform for use on smaller competitors' platforms.

II. Rivals Complain Settlement is Too Weak

The changes may indeed significantly shift Google's approaches in the mobile and internet spaces, remedying much of the things competitors complained about (if Google follows through).  But competitors are reportedly not happy with the settlement.

Internet services firms like Microsoft, Yelp, Inc. (YELP), and Expedia, Inc. (EXPE) were hoping the FTC would fine Google.  They were also hoping that the watchdog agency would personally supervise Google's efforts to make the changes, rather than agree to a settlement which affords Google greater flexibility to perform the modifications on its own pace and terms.

Expedia Site
Expedia and others are upset at the FTC for letting Google off so easy.
[Image Source: Getty Images]

In a letter to the FTC posted in the FairSearch.org coalition's blog yesterday, the group writes, "If the FTC fails to take decisive action to end Google’s anti-competitive practices, and locks itself out of any remedies to Google’s conduct that are offered in Europe later this month, the FTC will have acted prematurely and failed in its mission of protecting America’s consumers."

FairSearch.org represents Microsoft, Expedia, and other smaller service firms.

In a post on TechNet Microsoft vice president and deputy general counsel Dave Heiner adds:

Google continues to prevent Microsoft from offering consumers a fully featured YouTube app for the Windows Phone. 
....
Google has refused to allow Microsoft’s new Windows Phones to access this YouTube metadata in the same way that Android phones and iPhones do. As a result, Microsoft’s YouTube “app” on Windows Phones is basically just a browser displaying YouTube’s mobile Web site, without the rich functionality offered on competing phones. Microsoft is ready to release a high quality YouTube app for Windows Phone. We just need permission to access YouTube in the way that other phones already do, permission Google has refused to provide.

In the European Union, a similar antitrust probe into allegations of elicit tactics is wrapping up.  The EU has reportedly given Google a final chance to settle.  If the search giant is lucky it may be able to wrap up that dispute in the same manner as it did the U.S. one -- without painful fines or strict government oversight.

Sources: TechNet, FairSearch.org, Bloomberg





"We are going to continue to work with them to make sure they understand the reality of the Internet.  A lot of these people don't have Ph.Ds, and they don't have a degree in computer science." -- RIM co-CEO Michael Lazaridis






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