Google may benefit on U.S. antitrust issue if Trump picks right FTC head: analyst

After a revelation Jan. 27 that Google is in the sights of President Donald Trump’s administration over antitrust issues, attention has turned to Trump’s upcoming pick for chairman of the Federal Trade Commission.

On Feb. 1, Cowen and Company analyst Paul Gallant said in a research note that in the wake of a report suggesting the White House might move against Google on antitrust, several scenarios are possible.

“The more favorable interpretation is that Trump’s people aren’t actually pursuing an antitrust lawsuit, but merely seeking leverage over Google for things Trump actually cares about (maybe more tech cooperation with terrorism tracking; better search results),” Gallant said.

“The more concerning scenario would be that Team Trump ultimately believes Google has too much power and should be reined in by the FTC.”

All that’s certain, Gallant said, is that “President Trump’s advisors are debating whether Google needs more antitrust scrutiny.”

The European Commission, the European Union’s executive arm, has charged Google with antitrust offenses, which the company denies.

“We continue to believe the EC will issue an antitrust ruling against Google — likely in the next few months,” Gallant wrote.

At home, Google in 2013 agreed to change some of its business practices amid an FTC antitrust probe driven by complaints from competitors. It was later leaked to the Wall Street Journal that commission staff had recommended action against Google on the basis that the firm had hurt internet users by abusing its monopoly power.

Last year, there were rumblings of further FTC action.

And now, with the White House, according to the New York Times, eyeballing Google as an antitrust target, the president’s pick for FTC chairman will hold tremendous importance for the Mountain View tech titan, Gallant said.

President Trump designated Republican (FTC) commissioner Maureen Ohlhausen as acting chairman last week,” he wrote. “She is thought to be in the running for permanent chair, as is Josh Wright, a former FTC commissioner.

“We assume there are other candidates as well. But both commissioner Ohlhausen and Mr. Wright have past statements that would seem encouraging for Google should either become FTC chair.”

Ohlhausen had sided with Google over the FTC probe.

Wright, who headed Trump’s FTC transition team, has received research funding from Google for at least four academic papers that “supported Google’s position that it did not violate antitrust laws when it favored its own sites in search engine requests and restricted advertisers from running ads on competitors’,” according to The Intercept.

Google may be protected from White House-driven antitrust action by its status as a dominant U.S. firm, Gallant said in a Jan. 30 research note.

It’s certainly possible that Trump’s ‘America First’ philosophy could offset any campaign-related unhappiness with Google,” he said.

“Google is viewed as an American champion company, and it would not shock us if the Trump administration ultimately concluded that Google is more friend than foe, lest any U.S. action against Google just serve as a green light for other countries to go after Google more aggressively.

“As noted, much will depend on Trump’s pick for FTC chairman. That person will likely have real influence over how this Google issue unfolds in the coming months.”

 

Photo: A Google data center in Council Bluffs, Iowa. (Connie Zhou/Google via AP)

 

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