FTC Looking into Microsoft’s Claim of GoogleMultiplying Ad Costs by 50

Posted by at 11:17 am on September 21, 2011

Microsoft complaints against Google have led the FTC to launch an investigation into Google’s practices, says an unnamed person as he’s not authorized to comment publicly. Google allegedly illegally raised Microsoft’s advertising rates by a factor of 50, AdAge reported. Other allegations against Google regarding advertising will also be looked into and are part of a larger antitrust Google probe.

Google may be in violation of the Sherman Act and other antitrust laws. A spokesperson for Google said ad rates are partially determined by how close the ad is to a user’s search.

Another Microsoft representative, Jack Evans, claimed Google “shouldn’t be permitted to pursue practices that restrict others from innovating and offering competitive alternatives,” as it’s doing now.

Back in 2007, Microsoft complained that Google raised the rate for a Windows Live ad, a search engine that competed directly with Google’s. It went to $5 per mouse click from just 10 cents.

Two price comparison sites, MyTriggers.com and Foundem, are also Google competitors and sued Google over a similar practice in an Ohio court case and a European Union complaint, respectively. Judge John Bessey in Columbus dismissed the former case in August, however.

Microsoft is also said to be complaining that Google pressured advertisers into contracts that would make it hard to also advertise with Yahoo or Bing, the source claims. Comparing numbers of clicks between Google and other sites was also made technologically difficult, Microsoft said.

Advertising made up $28.2 billion, or 96 percent, of Google’s annual revenue in 2010. It controls 59 percent of the US online search advertising market.

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