• by Wendy Davis , Staff Writer @wendyndavis, January 3, 2013

After investigating Google for 20 months, the Federal Trade Commission today definitively endorsed the concept that search engine operators have the discretion to decide how to display search results.

The FTC officially cleared Google of engaging in unfair competition by prominently displaying results for its services while pushing other companies' links to the bottom of the results page. The agency accepted Google's argument that it sometimes returns its own results prominently in order to give consumers the information they are looking for.

The decision marks a huge victory for Google, given that the search giant has long made that  argument. But that wasn't Google's only argument. It also said it had a First Amendment right to display results as it saw fit, and commissioned constitutional law scholar Eugene Volokh to author a paper advocating that point of view. Volokh's paper, submitted to the FTC in April, argued that Google has the same free-speech rights as newspapers, encyclopedias or other publishers to decide what content to feature.

Volokh's not the only one to think so. Some judges have sided with Google in civil lawsuits by companies who said they were unfairly demoted by Google in the search results. Google mentioned two examples -- a lawsuit by SearchKing and one by KinderStart -- in a blog post about the FTC's decision. KinderStart sued Google in 2006 after it stopped showing KinderStart's site in the results. A federal district court judge in California not only tossed the lawsuit, but also ordered KinderStart's attorney to pay $7,500 in sanctions for having brought the action. SearchKing lost its similar case in 2002 on the ground that Google had a free speech right to return whatever results it wished.

If the FTC's decision is good news for Google, it's also a big blow to Microsoft and other companies that pressed for an antitrust investigation of Google. As New York Law School professor James Grimmelmann puts it, "The settlement is a giant F-U to Google's accusers: it's worse for them than if there'd been no investigation at all."

Google's rivals likely will continue to pressure lawmakers and state attorneys general to investigate. One group, the Microsoft-backed FairSearch, already condemned the FTC's decision as "disappointing and premature."

At this point, however, momentum is clearly on Google's side.