FTC turns up heat on Google in antitrust probe

Is Google on the verge of an antitrust showdown with federal regulators?

The Federal Trade Commission, which is investigating whether Google has abused its colossal share of the U.S. search market and put competitors at a disadvantage, has unsheathed a new weapon in its year-old probe of the search giant: It has hired a prominent outside litigator, known for her firepower in the courtroom, to oversee the investigation.

It’s the strongest signal yet that the agency is preparing to take on Google. The FTC has hired a lawyer from outside the agency only twice in the last decade.

Beth Wilkinson will take charge of the probe as the FTC digs more deeply into allegations by rivals that Google has abused its dominance in Internet search to shut out competitors and drive up online advertising prices. Wilkinson is best known for helping convict Oklahoma City bomber Timothy McVeigh in 1997, when she was a Justice Department prosecutor. She’s now a partner at Paul, Weiss, Rifkind, Wharton & Garrison in Washington, D.C.

The move substantially raises the stakes for Google. It also gives the FTC more leverage to negotiate a settlement.

A Google spokeswoman declined to comment on Wilkinson’s hiring. The company has consistently maintained that it has done nothing wrong.

The FTC investigation stems from allegations by rivals that Google has leveraged its share of the U.S. search market to funnel customers to its own services. The European Commission is also considering charges against Google over allegations of abusing dominance in the search and advertising market. A decision could come in the next few weeks.

The gathering regulatory storm could pose a serious legal and business threat to Google, which controls about 66% of the market for Internet search in the United States.

The hiring of Wilkinson brings to mind a similar move that the Justice Department made 14 years ago, when it brought in high-powered litigator David Boies to represent it against Microsoft. Wilkinson’s work with the FTC begins Monday. She could not be reached for comment.

Silicon Valley antitrust lawyer Gary Reback, who represents companies that have complained about Google’s tactics, called the hiring “enormously significant.”

“By bringing in this kind of experienced outside counsel, the FTC has established that it can bring a good case in court as opposed to an administrative hearing, and it has established that it can actually inflict pain on Google which wasn’t clear before,” Reback said. “Google can see this lawyer’s resume, her history of getting jury verdicts and that she knows her way around a courtroom. Around Silicon Valley, we think this was a very bad day for Google.”

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