DoJ has hands off Google (mostly); could risk ‘holy war’ if it attempts do-over

This article is provided to FT.com readers by PaRR (Policy and Regulatory Report)— a newly launched product of The Mergermarket Group providing proprietary intelligence and research on competition law and sector-specific regulatory changes around the world. www.parr-global.com

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The Department of Justice (DoJ) will not bail out anti-Google complainants who, in the face of an impending Federal Trade Commission (FTC) settlement, have reportedly been lobbying the department to take another bite at the case.

The DoJ will honor its clearance agreement with the FTC and not interfere with the commission’s investigation of Google (NASDAQ: GOOG), the DoJ’s chief economist, Fiona Scott-Morton, told PaRR.

Scott-Morton declined to say whether the DoJ had in fact met with Google’s competitors to discuss the current FTC investigation of the search-and-social company, as has been reported.

However, she said that if such a meeting had occurred, the DoJ would not have discussed any issues the FTC has carved out for itself in the clearance agreement with the DoJ.

“If the DoJ were to pursue a do-over of the FTC conduct investigation, it would spark a holy war between the FTC and the DoJ,” a source close to the case commented.

Sensitivities between the FTC and DoJ are high, in part because of the long clearance battle over which agency would investigate the so-called “Big Google” matter. “The relationship between the FTC and the DoJ is particularly bad right now,” according to a former DoJ attorney familiar with the matter.

A second senior DoJ official acknowledged the two agencies have established a clearance agreement that ceded some areas of the investigation exclusively to the FTC.

Once an agency wrestles control of an investigation it may refuse to relinquish clearance, thereby maintaining jurisdiction over the issues tied exclusively to that investigation, explained an FTC source who spoke in general terms.

Yet, it has emerged that not all issues related to the FTC’s current investigation of Google are exclusive to the commission.

In particular, the DoJ has previously addressed Google’s licensing of standard-essential patents, an issue the FTC has folded into its high-profile settlement talks with the company. It remains to be seen how the two agencies will divide any future work in this area, and whether patent enforcement will be a point of contention between the FTC and the DoJ.

“The DoJ wants to keep its finger in the patent issue, for sure,” said the source close to the case. “They have clearly weighed in on that issue, as has the FTC. So there is going to be an understandable reluctance to give up on that issue.”

The FTC source who spoke in general terms said the two agencies do not conduct concurrent investigations of the same matter, and that if the DoJ wanted to grant a do-over, the department would first need to receive the FTC’s permission.

“If we’re looking at a conduct case and they’re looking at a merger case involving the same company, that could be done at the same time,” the FTC source said. “But it wouldn’t be the same investigation at both agencies – that just does not happen. The way it typically works is that the agency that has the investigation going would close its investigation before they gave the other agency the OK and it was granted clearance for [the other agency] to pick it up.”

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