Google faces new anti-trust inquiry

Google's rivals have again prompted competition investigators at the US Federal Trade Commission to examine the company's business practices, and staff members have begun a preliminary look at whether Google abuses its market dominance in online display advertising, like the banner ads on web pages.

People who have been contacted in connection with the inquiry said the FTC had begun asking questions about Google's practices, and whether it was bundling advertising services in a way that prohibited rivals from competing for the business of advertisers.

The FTC said in December 2007 that it would monitor Google's practices in that area. At that time the commission found Google's proposed acquisition of DoubleClick, an online advertising company that specialised in display ads, was "unlikely to substantially lessen competition".

"We want to be clear, however," the FTC wrote at the time, "that we will continue to watch these markets and, should Google engage in unlawful tying or other anti-competitive conduct, the commission intends to act quickly".

Officials at the FTC and Google declined to comment on Friday on the possibility of a new inquiry. One person close to the matter, who spoke on the condition of anonymity, said the FTC had not yet contacted Google about a new inquiry.

Another person who has been briefed on the FTC's work said the commissioners had not approved the issuance of subpoenas or civil investigative demands, which would be part of any formal investigation. The FTC closed an antitrust investigation of Google's search business less than five months ago, voting unanimously not to proceed with an antitrust case after months of pressure from Google's rivals.

That investigation focused on how Google's search engine presented results of consumer queries, and whether the company purposely gave higher rankings and more prominent display to results that featured its own businesses.

In the new inquiry, according to a person in the advertising business who said he was contacted by the FTC, commission staff members asked about Google's practices in providing, or serving, ads to customers' websites and about the practices of its Ad Exchange, where companies bid on opportunities to aim at certain consumers with ads.

FTC officials were interested in whether Google was tying one application to another by offering below-cost pricing in exchange for a customer's guarantee not to buy ads through Google's competitors, the person said.