FTC Commissioner Edith Ramirez, still on the fence

According to sources familiar with the deliberations of the FTC commissioners, Chairman Jon Leibowitz is still searching for the third vote he needs to bring an antitrust case against Google for search result manipulation.

Both Leibowitz and fellow Democratic commissioner Julie Brill are in favor of taking the action, while Republican Maureen Ohlhausen is expected to oppose any serious antitrust charge.

That leaves conservative Democrat Edith Ramirez still on the fence, along with J. Thomas Rosch, the outgoing Republican commissioner who recently came down hard on Google for privacy violations.  Rosch was the sole dissenting vote against the recent settlement between the FTC and Google over the Safari hack, believing that Google should not have been allowed to explicitly deny liability for stealing data from Safari users without their consent.

The direction that the commission takes will likely frame the role of the FTC in the future.  The agency fought the Department of Justice for the right to pursue an antitrust investigation of Google, and according to those knowledgeable about the internal dialogues taking place at the FTC, there is little doubt amongst those at the agency that Google is indeed guilty of manipulating its search results.

They are worried that it will be a tough case to make, however.

The FTC was anxious to take on what many are calling the biggest antitrust case of the era, after having sat on the sidelines while the DoJ pursued the Microsoft case in the 90s.  Many at the agency saw this as their opportunity to plant a stake in the ground and get their antitrust mojo back, so to speak.

Right now they’ve also got a serious leverage problem because Google just doesn’t take them seriously.  They punted on Google’s acquisitions of Doubleclick, Admob and Admeld, as well as the WiSpy scandal, then served up a softball settlement over Google Buzz.  They are concerned not only that the Department of Justice will eat their lunch if they decide to do the el-foldo once again, but that Google will just shrug its shoulders and laugh whenever the FTC tries to play hardball in the future.

Google is out there whispering in the ears of journalists that they are off the hook for search manipulation and that there are three solid votes in opposition to the FTC pursuing the case.  Perhaps they know things nobody else does, but if it’s true, it will raise all kinds of questions about the agency’s balk, particularly with regard to commissioner Edith Ramirez.

Ramirez is a Democrat who who is reportedly angling for a judgeship or the chairmanship at the FTC once Leibowitz leaves, which is expected happen later this year.  And despite the President’s campaign promise to strengthen antitrust enforcement, he’s been remarkably cozy with Google chief Eric Schmidt, whose name has been bandied about as a potential nominee for either Treasury or Commerce Secretary.

To the President’s credit, the DoJ has taken just about every meaningful action against Google’s monopoly in recent years, from blocking the Google-Yahoo deal to opposing the Google books settlement to the ITA consent decree, despite Obama’s close ties to the company’s leadership.  But his recent FTC nominee, Joshua Wright, appears to have only one serious qualification for the job: his opposition to any antitrust action against Google.  It sends the signal not only to Ramirez but to other hopefuls that the best policy for the personally ambitious is a “hands off Google” policy.

Leibowitz is apparently taking a deferential position to the other commissioners in the Google discussions and seems to have one foot out the door.  They, on the other hand, are looking to him as Chairman to get the third vote if that’s what he really wants.

Ultimately, the commission seems to be stalled due to lack of political will.  They don’t doubt that Google manipulates its search results, they just need to decide whether they want to be prosecutors or politicians.  How much of their indecision is due to conflicting personal ambitions remains to be seen.