Brendan Sasso | National Journal | March 30, 2015 | 0 Comments

Senate to Investigate White House Role in Google's Antitrust Victory

Sen. Mike Lee, R-Utah, speaks during a news conference on Capitol Hill in Washington, Thursday, Feb. 12, 2015. Molly Riley/AP

A Senate panel plans to investigate whether the White House inappropriately derailed a federal investigation into accusations that Google was stifling online competition.

Sen. Mike Lee, the chairman of the Senate Judiciary's Antitrust Subcommittee, plans to contact the Federal Trade Commission, Google, and other online companies to discuss the issue, Emily Long, a spokeswoman for the Utah Republican, said Monday. The subcommittee has no plans yet to hold a hearing on the issue, she said.

The Senate probe comes after The Wall Street Journal reported earlier this month that the FTC staff had prepared a report in 2012 recommending that the agency take Google to court for abusing its market power in online search and advertising. In early 2013, the five FTC commissioners rejected the staff recommendation and voted not to pursue charges against Google.

The FTC meant to keep that staff recommendation secret, but accidentally disclosed portions of the report to the Journal in response to a request under the Freedom of Information Act. Documents that include sensitive business information or internal agency deliberations are usually exempt from public information requests.

Last week, the Journal reported that the FTC only closed its investigation after a flurry of meetings between top Google executives and officials at the FTC and the White House. Google Chairman Eric Schmidt and other company executives have close ties to the White House, and a number of former Google employees have joined the Obama administration. Since the beginning of the Obama administration, Google employees have met with White House officials an average of once a week, the paper reported.

Although Lee is a staunch conservative who is usually skeptical of government regulation, he has also been a fierce critic of Google.

"In short, we are interested in how the FTC allowed a confidential report to be disclosed and, second, what conversations if any the FTC or Google had with the White House about the pending investigation," Long said in an emailed statement. "We are not likely at this time to reexamine the underlying merits of the investigation, which was closed. Our interest is in oversight."

It's not the first time that the White House has come under fire for allegedly putting pressure on an independent agency. Congressional Republicans are also investigating whether the White House inappropriately influenced the Federal Communications Commission's decision to enact tough net neutrality regulations.

"We look forward to discussing these matters with Sen. Lee's office," said FTC spokesman Justin Cole.

Last week, the three current FTC commissioners who were at the agency when it voted on the Google case issued a statement denying any wrongdoing.

The Journal report "makes a number of misleading inferences and suggestions about the integrity of the FTC's investigation," Chairwoman Edith Ramirez, and Commissioners Julie Brill and Maureen Ohlhausen said.

"The article suggests that a series of disparate and unrelated meetings involving FTC officials and executive branch officials or Google representatives somehow affected the Commission's decision to close the search investigation in early 2013," they said. "Not a single fact is offered to substantiate this misleading narrative."

But they expressed "regret" over the "inadvertent disclosure" of the staff report in the Google case, and said the commission takes its obligation to protect sensitive business information seriously.

Speaking to reporters on Air Force One Monday, Eric Shultz, a White House spokesman, emphasized that the FTC "makes decisions independently."

"I know that there was a news report about meetings with Google executives at the White House, and I would tell you that we meet with business leaders all the time," Shultz said, according to a transcript provided by the White House.

Google is also not taking the accusations lying down. In a blog post last week, the company suggested the news stories were driven by a personal vendetta that Rupert Murdoch, the chairman of News Corp, which owns the Journal, has against Google.

Google said employees met with White House staff, not to discuss the FTC's antitrust investigation, but to talk about patents, education, self-driving cars, cybersecurity, trade, and other issues.

"We understand you have a new found love of the regulatory process, especially in Europe, but as the FTC's Bureau of Competition staff concluded, Google has strong pro-competitive arguments on our side," Rachel Whetstone, a Google spokeswoman, wrote in the blog post, which was addressed to "Rupert." She pointed to language from the FTC report that acknowledged that Google faces competition from Microsoft and others.

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