Google investigated on whether it is using its dominance in search advertising to beat competition

Google at centre of government antitrust probe

Google is being investigated in the US over whether it is using its dominance in the search advertising market to beat rivals.

At least three state attorneys general from California, Ohio and New York have begun antitrust investigations into Google, an anonymous source has claimed.

The attorneys general investigation into Google has emerged at the same time as a Wall Street Journal report that the world's number one search engine is about to receive the civil equivalent of a subpoena from the U.S. Federal Trade Commission as part of a probe into the company's internet search business.

Google dominates U.S. and global markets for search advertising and has been accused by competitors of favouring its own services over rivals in its search results.

The FTC plans to send the civil investigative demand with a request for more information, the civil equivalent of a subpoena, within five days, according to the WSJ report.

U.S. antitrust regulators have been concerned about Google's dominance of the Web search industry, and it has been under investigation by the European Commission since last November.

Complaints has been filed with regulators on both sides of the Atlantic, many from Google rivals who specialize in vertical searches like price comparison websites, which are widely seen as a threat to Google's position as a key gateway to online information.

"The distraction that comes from a federal investigation should not be underestimated," Colin Gillis of BGC Partners said, adding that one of Google's best options to grow by moving into adjacent markets was being hampered by antitrust probes.

Gillis noted that the real cost of the FTC investigation was not financial.

"The issue comes down to management distraction, that's a real cost," he said.

Google has weathered other antitrust setbacks, including walking away from a search deal with Yahoo! Inc in 2008 when the Justice Department signaled it was prepared to challenge it.

A New York judge has said that a deal Google had made with publishers and authors to create a massive digital library was illegal, partially because it effectively gave Google the rights to books that are in copyright but whose authors cannot be found.

Google and the FTC have declined to comment on the WSJ report. 

Google was not immediately available to comment on the attorneys general investigation.

The attorneys general of California and New York declined comment while the attorney general of Ohio was not immediately available for comment.

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