FTC staff recommends Google be sued over patents - source

WASHINGTON Fri Nov 2, 2012 4:46am IST

A security personnel answers a call at the reception counter of the Google office in the southern Indian city of Hyderabad February 6, 2012. REUTERS/Krishnendu Halder

A security personnel answers a call at the reception counter of the Google office in the southern Indian city of Hyderabad February 6, 2012.

Credit: Reuters/Krishnendu Halder

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WASHINGTON (Reuters) - A Federal Trade Commission staff report has recommended that the government sue Google for violating U.S. antitrust law because it asked courts to stop the sale of some products that infringe its essential patents, a source told Reuters Thursday.

The five-member commission is inclined to vote in favor of suing Google Inc (GOOG.O), the Internet search engine company, according to the source, who declined to be identified to protect business relationships.

Bloomberg News was the first to report the staff recommendation on Thursday.

Apple Inc (AAPL.O), Google and Microsoft Corp (MSFT.O) have sued each other many times in various countries, each alleging that their respective patents are being infringed by rivals in the highly competitive smartphone market.

In many cases, the companies ask that their rivals' products to be banned from stores.

In a few cases, the patents involved are considered "standard essential patents," which holders pledged to license on fair and reasonable terms. Many antitrust enforcers believe it is inappropriate for companies to ask for sales bans based on the infringement of essential patents.

Google has sued both Apple and Microsoft in the United States, saying the companies infringed on standard essential patents, according to Florian Mueller, an expert on the smartphone patent wars.

The FTC is looking into a long list of complaints brought by rivals of the search company, which is also accused of using its dominance to squash rivals in vertical search areas such as shopping and travel.

Google declined to discuss the report, saying "we take our commitments to license on fair, reasonable, and non-discriminatory terms very seriously."

FTC Chairman Jon Leibowitz said in mid-September that he expected a decision in the case by the end of the year. A decision could be a lawsuit or, more likely, a settlement.

Google has settled with U.S. law enforcement agencies in the past.

For example, it settled with the FTC following privacy gaffes during the botched roll out of its social network, Buzz, and later paid $22.5 million to settle charges that it bypassed the privacy settings of customers using Apple's Safari browser.

Google also paid a $500 million settlement in 2011 to the Justice Department for knowingly accepting illegal advertisements from Canadian pharmacies selling in the United States. (Reporting By Diane Bartz; Editing by Claudia Parsons and Andre Grenon)

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