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Google settles on patents, other antitrust claims

SAN FRANCISCO (AP) — Google is pledging to license hundreds of key patents to mobile computing rivals under more reasonable terms and to curb the use of snippets from other websites in Internet search results in a settlement that ends a high-profile antitrust probe.

In a major victory for Google, the Federal Trade Commission unanimously concluded that there isn't enough evidence to support complaints that Google unfairly favors its own services in search results.

Thursday's announcement caps a 19-month antitrust investigation by the FTC over Google Inc.'s business practices.

The outcome "is good for consumers, it is good for competition, it is good for innovation and it is the right thing to do," FTC Chairman Jon Leibowitz said.

Google is still trying to settle a similar antitrust probe in Europe. A resolution to that case is expected to come within the next few weeks.

The U.S. government's wide-ranging investigation ended with Google agreeing to charge "fair and reasonable" prices to license hundreds of patents deemed to be essential for mobile devices. Google makes the Android operating system that runs many phones, and the agreement ensures the key technologies can be used in Apple Inc.'s iPhone, Research in Motion Ltd.'s BlackBerry and smartphones running on a Microsoft Corp.'s Windows software. Those patents came as part of Google's $12.4 billion acquisition of device maker Motorola Mobility Holdings last May.

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To placate regulators, Google also promised that upon request, it will exclude snippets copied from other websites in its summaries of key information, even though the company had insisted the practice is legal under the fair-use provisions of U.S. copyright law. Despite the fair-use defense, Google already had scaled back on the amount of cribbing, or "scraping," of online content after business review site Yelp Inc. lodged one of the complaints that triggered the FTC investigation.

Under the FTC resolution, Google's rivals will now be able to request that their excerpts are left out of Google's search results without having to fear that links to their sites will be penalized in Google's search rankings.

In another concession, Google pledged to adjust the online advertising system that generates most of its revenue so marketing campaigns can be more easily managed on rival networks.

The FTC's investigation focused on allegations that Google has been abusing its dominance in Internet search.

Microsoft Corp. and other Google rivals say the search company has been highlighting its own services on its influential results page while burying the links to competing sites. Google has fiercely defended its right to recommend the websites that it believes are the most relevant. While the FTC said it uncovered some obvious instance of bias in Google's results during the investigation, the agency's five commissioners unanimously concluded there wasn't enough evidence to take legal action.

"Undoubtedly, Google took aggressive actions to gain advantage over rival search providers," said Beth Wilkinson, a lawyer that the FTC hired to help steer the investigation. "However, the FTC's mission is to protect competition, and not individual competitors."

The FTC's findings vindicated Google, which has depicted its methods as a more convenient way to capsulize key information so users can get the information they desire more quickly and concisely.

"The conclusion is clear: Google's services are good for users and good for competition," David Drummond, Google's top lawyer, wrote in a Thursday blog post.

Throughout the FTC investigation, Google executives also sought to debunk the notion that the company's recommendations are the final word on the Internet. They pointed out that consumers easily could go to Microsoft's Bing, Yahoo or other services to search for information. "Competition is just a click away," became as much of a Google mantra as the company's official motto: "Don't be evil."

The FTC's implicit endorsement of Google's approach to Internet search is a blow for Microsoft and other rivals who had lodged complaints with regulators in hopes of goading the government into taking legal action that would split up or at least hobble the Internet's most powerful company.

The Computer & Communications Industry Association, a technology trade group, applauded the FTC for its restraint.

"This was a prudent decision by the FTC that shows that antitrust enforcement, in the hands of responsible regulators, is sufficiently adaptable to the realities of the Internet age," said Ed Black, the group's president.

Microsoft didn't immediately respond to requests for comment. But FairSearch, a group whose membership includes Microsoft, call the FTC's settlement "disappointing and premature," given that European regulators might be able to force Google to make more extensive changes. "The FTC's settlement is by no means the last word in this case," FairSearch asserted.

Yelp also criticized the FTC's handling of the case, calling "it a missed opportunity to protect innovation in the Internet economy, and the consumers and businesses that rely upon it."

Microsoft and its allies could still try to persuade the U.S. Justice Department to pick up the antitrust probe where the FTC left off. That's what happened in the 1990s the Justice Department took over wide-ranging investigation into Microsoft's dominant position in personal computer software after the FTC backed off.

The attorneys general in at least six states — California, Texas, New York, Ohio, Mississippi and Oklahoma — also have been examining whether Google's business practices throttled online competition. The status of those state inquiries is unclear.

Investors had already been anticipating Google would emerge from the inquiry relatively unscathed.

Google's stock rose 64 cents to $723.89 in afternoon trading Thursday. Microsoft shed 35 cents, or 1.3 percent, to $27.27.

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