Skift Editor’s Note: The Financial Times and other publications reported today that Google faces a record fine of at least $1 billion from European antitrust regulators over search practices in shopping that favor Google’s own products over those of competitors. The fine could go as high as 10 percent of Google’s revenue, which in 2016 stood at more than $90.2 billion, according to reports.
A Bloomberg story on a top U.S. Federal Trade Commission candidate follows:
The race to lead one of the U.S.’s top competition watchdogs just lost a frontrunner. That may be good news for Google.
Utah Attorney General Sean Reyes, who last year urged antitrust officials to consider re-opening an investigation into the search practices of Alphabet Inc.’s Google, was one of President Donald Trump’s top candidates to lead the Federal Trade Commission earlier this year, people familiar with the matter said at the time.
Now he’s out of the running, said two people close to the White House and another person familiar with the matter. FTC Acting Chairman Maureen Ohlhausen remains under consideration, according to one of the people. The White House is also considering Washington antitrust lawyer Joseph Simons, two of the people said.
Alan Crooks, a spokesman for Reyes, disputed that he’s not in play. “I don’t know that Attorney General Sean Reyes is going to get it, but he has been an early and vocal supporter of Donald Trump and it’s our understanding that he’s still in the mix,” Crooks said.
The speculation about the next FTC chair is swirling after some of the biggest U.S. technology companies, including Google and Oracle Corp., made cases to the Trump administration and lawmakers about the decision earlier this year, according to two people familiar with the efforts. People close to those companies denied they had lobbied the White House. Dueling opinion pieces about the candidates and their agendas appeared in political and trade publications.
The White House said there are “no personnel updates to share at this time.” Google declined to comment, and Ohlhausen declined to comment through an FTC spokesman. Simons didn’t respond to requests for comment.
The uncertainty leaves the FTC, one of the main U.S. antitrust overseers, without a permanent leader six months into the Trump administration. Presidents Barack Obama and George W. Bush, in their first terms, tapped candidates to lead the FTC by March.
The other competition enforcer — the Justice Department’s antitrust division, which reviews mergers and investigates anticompetitive conduct — is also awaiting a permanent chief. Makan Delrahim, a former U.S. Justice Department lawyer nominated by Trump to lead the department’s antitrust unit, awaits Senate confirmation.
The FTC is the nation’s primary consumer-protection watchdog, bringing cases against firms over deceptive practices and privacy violations. Two of five FTC commissioner seats are currently filled. Democrat Terrell McSweeny sits on the commission in addition to Ohlhausen.
The philosophy of the FTC chair matters to giant companies that are carving out large sections of the new economy. An active chair could use its mandate to go after technology companies that have been lightly regulated in the U.S. even as some advocates have called for antitrust enforcers to examine their dominance in areas including search, online shopping and ride-sharing.
Google isn’t the only company whose fortunes could shift depending on the administration’s regulatory approach, and calculations of potential winners and losers made Reyes a lightning rod after it emerged in January that he was a Trump favorite.
Back in 2016, as Utah’s top prosecutor, Reyes wrote to the FTC’s then-chairwoman to urge the commission to revisit its closed investigation of Google, after the European Union accused the company of manipulating results to unfairly promote its own content. That stood to make his candidacy popular with the search giant’s rivals including Oracle and Yelp Inc., and travel sites such as Expedia Inc.
Oracle declined to comment. Expedia and Yelp didn’t immediately respond to requests for comment.
A few months into the new administration, Ohlhausen was seen as an increasingly serious contender, one of the people familiar with mater said. She’d staked out a different ground on Google: Ohlhausen voted along with Democrats on the commission to close the FTC’s investigation into Google in 2013. At the time, the agency also asked Google to change some of its practices — a move that Ohlhausen disagreed with, saying she wouldn’t have imposed any conditions on the company.
Opinion pieces supporting the two apparent favorites appeared in the Morning Consult, The Hill, Newsmax and the Independent Journal Review, among others.
In March, Forbes published a piece by James Cooper, a former FTC official, who touted Ohlhausen’s “Economic Liberty” agenda and her efforts to combat “the abuse of government process to limit competition.” Cooper has written favorably of Google’s competition posture in the past.
Cooper has known Ohlhausen for almost 15 years, he said in an email, calling her a deep thinker who would be a fantastic pick. Any suggestion that his views on her are informed by his academic views on privacy or the search-bias case against Google would be “way off base,” he said.
An Ohlhausen chairmanship could cheer other companies, including Qualcomm Inc. In the waning days of the Obama administration, the FTC’s Democratic majority voted 2-1 to file charges against Qualcomm for abusing its market position and cutting an exclusive deal with Apple Inc. Ohlhausen dissented, saying the lawsuit was based on a flawed legal theory and would undermine U.S. intellectual property rights. Qualcomm declined to comment.
If Ohlhausen wins the top job, she would have a path to drop the lawsuit with a fully staffed panel of three Republicans and two Democrats. Currently, Ohlhausen and McSweeny would likely be split.
Apple, which uses Qualcomm chips, followed the FTC’s lawsuit against Qualcomm with its own $1 billion challenge claiming Qualcomm demanded exorbitant licensing rates.
–With assistance from Ben Brody Mark Bergen Ian King Gerrit De Vynck and Alex Webb
©2017 Bloomberg L.P.
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