Federal regulators escalated their antitrust investigation of Google on Thursday by hiring a prominent litigator, sending a strong signal that they are prepared to take the Internet giant to court.
The Federal Trade Commission is examining Google's immensely powerful and lucrative search technology, which directs users to hundreds of millions of online and offline destinations every day. The case has the potential to be the biggest showdown between regulators and Silicon Valley since the government took on Microsoft 14 years ago.
Then as now, the core question is whether power was abused. The agency's inquiry has focused on whether Google has manipulated its search results, making it less likely that competing companies or products appear at the top of a results page.
Federal Trade Commission officials cautioned that no decision had been made about whether to bring a formal case against Google. But the hiring of a former Justice Department prosecutor who played a lead role in the conviction of the Oklahoma City bomber, immediately catapulted the investigation to another level. The agency has hired outside litigators only twice in the last decade.
This shows Google that if it doesn't give you the remedy you want, you're going to litigate, say Chicago Antitrust and Trade Regulation Lawyers.
Several antitrust experts compared the hiring of the former Justice Dept. prosecutor -- who has brought about 40 major cases in government and private practice and won them all -- to the government's hiring to represent it against Microsoft.
The Microsoft case in the late 1990s transformed the tech industry, reining in its most powerful company and allowing for the rise of new companies like Google. Now Google wields the same sort of power that Microsoft once did, and is under the same sort of scrutiny.
It has been involved in one privacy controversy after another over the last year. Indeed, the announcement of the hiring eclipsed Google's formal response earlier Thursday to a fine by the Federal Communications Commission for obstructing a separate investigation.
The litigator noted that she does not underestimate Google. No one else was underestimating it Thursday either. Antitrust cases charging the abuse of a monopoly are difficult to prove.
The general issue underlying the investigation is whether Google abuses its power in the market for Internet search. Google controls about 66 percent of the United States search market, according to comScore. Microsoft's Bing accounts for about 15 percent of Internet searches, with Yahoo gathering 14 percent.
Competitors have said that Google at times adjusts the algorithm that produces its search results to lower the likelihood that a link to a competitor or a potential competitor for its products appears near the top of the results.
For example, if Google were to program its system so that a consumer's search for "washing machines" is more likely to produce as its top result a link to Google-related shopping sites, that could be interpreted as putting its competitors at a disadvantage.
Questions have also been raised about whether Google has done the same thing with the paid advertisements that appear on the right-hand side of a Google search page.
While critics might say that Google is manipulating its results to hinder competitors, Google might assert that it is tweaking its model to provide the best results to consumers.
Google's power comes not from its large market share, but from the fact that consumers are unable to evaluate the product. It would be difficult to decide in many cases whether the results are exclusionary in a bad way or in a way that helps consumers.
Google argues the latter, and has said many times that competition is a click away. When the company announced in June that the F.T.C. had begun a review of its business, it noted that it makes public much information about how its rankings work.
Earlier Thursday, Google formally denied obstructing a Federal Communications Commission investigation into whether privacy laws had been violated in its Street View project, but agreed to pay a small fine anyway.
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