Bits Blog: Health Sites Under Scrutiny Over Mining of Data

Millions of people rely on Web sites like WebMD and Health.com for information about depression, sexually transmitted diseases, cancer and other sensitive personal health issues. But it can be difficult for consumers to understand how health sites may capture, analyze and share information about user searches and other activities — even the small minority of people who manage to slog all the way through the privacy policies.

Lisa Madigan, the attorney general of Illinois.

In an effort to increase industry transparency, Lisa Madigan, the attorney general of Illinois, has opened an inquiry into the data-mining practices of some popular health sites.

On Tuesday, she sent letters to officials at eight sites asking for detailed information about their companies’ data collection, data storage and data sharing practices. The sites included: about.com; drugs.com; health.com; mayoclinic.com; menshealth.com; mercola.com; WebMd.com; and weightwatchers.com.

In the letters to the sites’ executives, Ms. Madigan said she was concerned about the potential dissemination of information related to people’s private health concerns.

“Health-related information, which would be protected from disclosure when said in a doctor’s office, can be captured, shared, and sold when entered into a Web site,” she wrote. “These concerns are likely overlooked by consumers, as the disclosures about capturing and sharing their information are often buried in privacy policies not found on websites’ main pages.”

WebMD’s privacy policy, for example, says that the site does not make a user’s personal information – like a name or address — available to third parties for marketing purposes.

But third parties, the privacy policy says, may use non-personal data to target WebMD users with ads related to their interests. The policy added that WebMD may combine personal and nonpersonal information about users on the site, or may collate that data with information gathered from external sources.

Risa Fisher, a spokeswoman for WebMD, said that the company had just received Ms. Madigan’s letter of inquiry and planned to provide the information she requested about its user data practices.

“Privacy is very important to WebMD and our policies are designed to fully protect the personal health information of our users,” Ms. Fisher said.

The Illinois inquiry comes after the publication a few days ago of a research letter in a medical journal reporting that some popular health portals leaked information about users’ health searches to third parties, like social networks or ad networks, operating on their Web sites.

For his research, Marco D. Huesch, a health care policy researcher at the Sol Price School of Public Policy at University of Southern California searched for content related to depression, herpes and cancer on 20 popular health-related Web sites.

In the letter about his study, published in JAMA Internal Medicine, he said that 13 of those sites used third-party tracking elements like cookies or social media plug-ins. Seven of the sites, he wrote, leaked his health searches to third-party trackers.

Although Mr. Huesch wrote that he could not determine whether the third parties misused the information, he found the leakage of the health searches worrisome in itself.

“The ramifications could span embarrassment, discrimination in the labor market,” Mr. Huesch wrote, “or the deliberate decision by marketers not to offer or advertise particular goods and services to an individual, based solely on the companies’ privately gathered knowledge.”

The online advertising industry is keenly aware of such concerns.

This year, the Network Advertising Initiative, an industry self-regulatory association for third-party digital ad companies, revised its code of conduct to require that its members obtain user permission before collecting information about certain specific health conditions.

The conditions that would require user permission include “all types of cancer, mental health related conditions, and sexually transmitted diseases,” the revised code said, but not acne, high blood pressure, heartburn, cold and flu, or cholesterol management.

The self-regulatory group has nearly 100 members, according to its site. The updated version of code of conduct is scheduled to take effect next year.

Antitrust Scrutiny of Telecoms in Europe

BRUSSELS — European Union antitrust authorities said on Thursday that they had investigated major telecommunications companies, including Deutsche Telekom of Germany, on suspicion that the companies were using their dominant market positions to limit Internet providers’ access to their networks.

The European Commission, the executive arm that oversees antitrust policy across the 28-member bloc, did not identify the companies or say how many had been inspected in the operation, which took place Wednesday.

But Deutsche Telekom confirmed on its Web site that a raid had occurred, adding that e-mails and other data had been seized. Reuters reported that the authorities had also raided the offices of Orange of France and Telefónica of Spain.

Big telecommunications companies provide the networks that link smaller sites, like movie-streaming services, to the Web, effectively acting as a gateway. In a statement, the commission said it was concerned that the companies may have violated antitrust rules “that prohibit the abuse of a dominant market position.” Those companies provide services “crucial for the functioning of the Internet” so consumers can gain access to “Internet content with the necessary quality,” it said.

Inspections are a preliminary step in an antitrust investigation. Companies found to have broken European Union competition laws can be fined as much as 10 percent of their annual global sales.

Cogent Communications, a company based in Washington that sells Internet access to third parties, said the inspections were probably linked to complaints it had filed in Germany against Deutsche Telekom and in France against Orange, previously known as France Télécom.

Dave Schaeffer, the chief executive of Cogent, said by telephone that the major telecommunications companies in France, Germany and Spain were impeding his business by refusing to upgrade congested networks. The result, he said, was that services for Cogent clients like Netflix, the film-streaming service, or YouTube, the online video-sharing site, would be slowed or difficult to access.

He cited Dailymotion, the French video-sharing site that is owned by Orange. “For example, Orange owns the direct competitor to YouTube,” Mr. Schaeffer said. Orange “wants French consumers to use Dailymotion instead of YouTube.”

The French state holds a stake of about 27 percent in Orange. This year, the government of President François Hollande expressed its objections to plans by Yahoo to buy a controlling stake in Dailymotion.

Mr. Schaeffer said his company had discussed the matter with the commission but that Cogent had not submitted a formal complaint. He said national authorities in France and Germany had rejected his company’s complaints against Orange and Deutsche Telekom but that Cogent was appealing the French decision. Cogent has also had difficulties in Spain but has not filed a complaint there, he said.

Deutsche Telekom said on its Web site that it was “surprised by the initiation of further investigations by the commission into the global market for Internet traffic, since previous allegations have all turned out to be unfounded.”

“Similar investigations carried out by national regulatory bodies, who have also dealt with the issue in great detail, have also been abandoned,” it said. “This market is dominated by major providers based in the United States, which means we are not the right target for these investigations.”

Orange and Telefónica could not be reached for comment.

DealBook: Google’s Effort to Skirt Regulation May Invite More Scrutiny

Harry Campbell

Google’s motto is “don’t be evil.” But its recent acquisition of Waze, reportedly for $1 billion in cash, shows that just because you’re not evil, it doesn’t mean you can’t be aggressive in pushing the boundaries of the law.

The question now is whether the United States government pushes back and forces Google to give back its new toy.

Waze is yet another one of those blockbuster deals for a technology company with little or no revenue that makes you jealous. Five-year-old Waze has just 110 employees, so Google appears to be paying almost $10 million per employee. As for profits, Waze’s chief executive, Noam Bardin, has said, “This is Silicon Valley. We don’t talk about those things here.” Right.

Google is paying top dollar for Waze because it is at the intersection of two hot fields: map search and social media. Users download Waze’s app to their phone and then supply information about locations, routes and traffic, making the maps more intelligent. And Waze has the usual phenomenal growth in users, with 50 million worldwide. This is a field where there is believed to be oodles of money to be made in related advertising.

From this vantage point, the deal has a number of “must” business justifications for Google. Google is the top dog, dominating the “turn-by-turn” market for mobile maps on smartphones, and Waze makes Google a bigger dog.

Perhaps more important, buying Waze keeps the technology out of the hands of Facebook, which had reportedly bid about $1 billion for the company, and Microsoft and Apple, which also reportedly bid $400 million for the company earlier this year.

A billion dollars not only cements Google’s lead in map search, it does so in a big way. Google has paid large sums to have cars drive around the world to give its maps information content. But Waze is doing the same thing on the cheap by having its own users do the work.

Both types of systems are difficult and hard to build, meaning new entrants are unlikely to come. Just witness the difficulties Apple faced with the controversy over the accuracy of its own map app. If Apple can’t do this easily with its built-in user base of some 400 million iPhone users, not many others can.

So one might think that there would be significant antitrust issues with the acquisition. Google, already the dominant player, is buying what looks like a rising competitor, and it is doing so in a way that deprives other big players an easier way to compete.

It’s here where Google is pushing as hard as it can on the law.

Normally, to acquire a company in the United States, a buyer is required to supply the Justice Department or the Federal Trade Commission with what is known as a Hart-Scott-Rodino filing. This notifies the agencies of the transaction so either can review it for compliance with the antitrust laws.

The filing also prompts a waiting period during which the government can delay the acquisition to begin an in-depth investigation to determine if there is an antitrust problem. This is one reason that public takeovers are completed months after they are announced: the companies involved are waiting to clear antitrust review in the United States or another country.

This is the normal process. Yet Google’s only announcement of the deal appears to say that the companies signed and closed the deal that day, leaving Google the proud owner of Waze.

According to a person close to Google, the company skipped the Hart-Scott-Rodino filing by relying on an exemption. This filing is not required if the acquisition is of a foreign company that has sales and assets in the United States of less than $70.9 million. Waze is an Israeli company with headquarters in Silicon Valley, so it comes under this test.

Waze probably doesn’t have $50 million in revenue worldwide, yet the test also looks at assets. Given that Waze is worth $1 billion, it is hard to see that the value of its intellectual property in the United States business doesn’t meet the test. And the F.T.C. has previously indicated that companies should include this type of intellectual property in informal guidance.

Nonetheless, Google appears to have taken this aggressive position and is forgoing any antitrust review, instead plunging ahead with the acquisition.

So why did Google do this?

A representative from Google declined to comment.

Google may be playing hardball with the government here. Psychologically, it may be harder for the government to undo something that is done. And once Google acquires this company, it will become harder to force it to undo any integration it may have done with its own services. (For now, Google has said it will keep Waze separate.)

Not only that, but the Waze owners may have wanted to sell precisely on this basis, avoiding this huge possibility that the United States government would reject the deal, a risk that Google may have been willing to take with Facebook and Apple hovering.

But given the publicity over the acquisition, the government will almost certainly step in to review. Consumer groups are circling, and the Consumer Watchdog Group has written the government to ask for an in-depth review. That group has noted that Google’s purchase of Doubleclick and AdMob led it to a 93 percent market share in mobile advertising.

As with previous deals, the government can force Google to sell Waze, or put other restrictions in place, if there is a problem.

The standard was set forth in a piece of legislation passed a century ago: Will the acquisition “substantially lessen competition”? In part, this will come from how the market is defined — if it is just maps, well, you have to include companies like Rand McNally.

If it is turn-by-turn maps on smartphones, then according to Berg Insight, Telenav has a 33 percent market share while Google and Waze’s combined North American market share would be 28 percent. But Telenav’s business is stagnant and Google’s grew 30 percent last year, while Waze’s business grew 100 percent, according to Berg.

It may all come down to how easy it would be for another company to replicate what Waze is doing — it built an enormous user base that made it worth a billion dollars.

Even if Google can show that this deal does not decrease competition, the acquisition can be unwound if Waze is found to meet Justice Department guidelines as a “firm that plays a disruptive role in the market to the benefit of customers.” André Malm, a senior analyst at Berg, told me, “There is nothing like Waze.” He noted that the company was shaking up the market, so the authorities will pursue this line of investigation.

Either way, the comments of Mr. Bardin are not going to help, but they do serve as a reminder to other start-up chiefs looking to sell to their competitor not to say they that are the only game in town.

At the least, this all means that the Waze acquisition is likely to get a thorough review by the government. The battle will now begin. That Google will keep Waze without restrictions is no certainty. But the government faces a challenge. If it does decide to try to unwind this acquisition, Google is going to push the bounds of the law as hard as it can. The future of map search is at stake, and Google may not be evil, but this is business.

This post has been revised to reflect the following correction:

Correction: June 19, 2013

An earlier version of this column misstated the threshold that would require a buyer of a foreign company to supply the Justice Department or the Federal Trade Commission with what is known as a Hart-Scott-Rodino filing, which notifies the agencies of the transaction so either can review it for compliance with antitrust laws. It is $70.9 million in sales and assets in the United States for the foreign company, not $60.9 million.

Disruptions: Social Media Product Plugs Draw Scrutiny

Texas Instruments

In 1982, Bill Cosby appeared on television showing off a snazzy new computer. “Looking for a powerful home computer?” he said as he waved his hands over a Texas Instruments PC that looks archaic now. “This is the one! With 16K memory, it can take you a long way.”

The commercial made it obvious that Mr. Cosby, a prominent comedian and television star, was being paid to promote the boxy device.

Computers have changed significantly in the decades since. And, to the confusion of consumers, celebrity endorsements have, too.

Today, when celebrities and people with large followings on social networks promote a product or service, it’s often impossible to know if it’s an authentic plug or if they were paid to say nice things about it.

Take Miley Cyrus, the 20-year-old pop star who was traveling around America last week promoting her new album. One morning she posted on Twitter: “Thanks @blackjet for the flight to Silicon Valley!” The details of the arrangement between BlackJet, a Silicon Valley start-up that arranges for private jet travel, and Ms. Cyrus are unclear. But Dean Rotchin, chief executive of BlackJet, said “she was given some consideration for her tweet.” Ms. Cyrus did not respond to a request for comment.

Thanks @blackjet for the flight to Silicon Valley! #wecantstop

— Miley Ray Cyrus (@MileyCyrus) June 3, 2013

Did her 12 million Twitter followers know about the arrangement? It’s unlikely, and that lack of clarity, increasingly common in the social media postings of celebrities, is starting to draw the attention of federal officials.

“In a traditional ad with a celebrity, everyone assumes that they are being paid,” said Mary K. Engle, associate director of the advertising practices division at the Federal Trade Commission. “When it’s not obvious that it is an ad, people should disclose that they are being paid.”

Under F.T.C. guidelines, companies and the celebrities they are sponsoring risk being deceptive by not noting that these endorsements are advertisements, Ms. Engle said. Sometimes, they are breaking federal rules called “Dot Com Disclosures” that require clarity about sponsorships, even on Twitter. People who violate the law can be given warnings or be fined, though the size of the financial penalty isn’t clearly defined.

Some celebrities are unapologetic about promoting their investments anywhere they can. In 2011, Ashton Kutcher was guest editor of an online-only version of Details magazine, where he profiled a dozen companies in which he was an investor or adviser, but did not disclose the investments. At the time, Dan Peres, the editor in chief of Details, said the magazine stood “by how we communicated Ashton’s involvement with some of the companies.” Mr. Kutcher declined to comment.

Mr. Kutcher has also tried to sneak companies in which he invests onto “Two and a Half Men,” the CBS show for which he is a lead actor, by placing stickers for the tech outfits Foursquare, Chegg and Flipboard on his character’s laptop. He boasted in an interview at the TechCrunch Disrupt conference that he “pulled it off,” until the network found out and started blurring the back of his laptop during the show.

Mr. Kutcher regularly posts about companies he invests in on Twitter, too. He also uses his Twitter and Facebook heft (he has about 14 million followers on both services) when negotiating with companies he wants to invest in, by noting that he will share the product on these social networks. The F.T.C. declined to comment on any particular instances where celebrities have posted about companies with which they have financial relationships. The agency did say there are “open investigations” into companies that have broken federal rules.

“Like advertorials and infomercials, with Twitter, our view would be that the consumers have a right to know. It gives them that additional information, just like a celebrity endorsing something on TV,” said Andrea C. Levine, director the National Advertising Division, part of the Council of Better Business Bureaus, which reviews advertising claims for accuracy.

“It’s a new day, with a new way, but an old issue,” Ms. Levine said.

According to talent agency employees, who spoke on the condition that they not be named because they are not allowed to divulge private dealings with clients, some A-list celebrities can be paid as much as $20,000 for a Twitter post or Facebook update.

In May, Kim Kardashian posted on Twitter: “Pregnancy lips…. @EOS to the rescue! LOL” with a picture attached of her using EOS lip balm. Ms. Kardashian did not respond to a request for comment.

Last month, the actor Michael Ian Black was more forthcoming and told his two million Twitter followers that Dos Equis had paid him thousands of dollars to share an ad for the beer company.

@planetoffinks No, they wrote it and paid me thousands of dollars to run it.

— Michael Ian Black (@michaelianblack) May 11, 2013

Linda A. Goldstein, a partner and chairwoman of the advertising, marketing and media division at the law firm Manatt, Phelps & Phillips, said that in all of these contexts the advertisers, investors and celebrities had a responsibility to disclose that they have something to gain.

“The message to brands is that you are responsible for the action of your spokespeople, so when you engage them, they should be aware of their obligations,” Ms. Goldstein said. In some cases individuals are breaking the law, she said, and she believes the F.T.C., or another government agency, will eventually bring fines against a celebrity for not disclosing his or her financial relationship.

Although there are no specific rules about the language people must use in an endorsement, Ms. Engle of the F.T.C. suggested using the word “ad” to preface a tweet. “It only takes up two extra characters.”

There is a risk, of course, that today’s celebrities could anger fans by not disclosing their financial ties. In an interview with InfoWorld magazine in 1982, William Turner, the marketing manager for Texas Instruments’ consumer products group, was asked why he had chosen Mr. Cosby to represent the company.

“He represents comfort,” Mr. Turner said, “and people trust him.”

Pregnancy lips…. @eos to the rescue! LOL twitpic.com/ctpyjj

— Kim Kardashian (@KimKardashian) May 28, 2013

IPhone Contracts With Carriers Under Scrutiny in Europe

Although they have not filed formal complaints, a group of European wireless carriers recently submitted information about their contracts with Apple to the European Commission, according to a person briefed on the communications with the carriers who asked not to be identified.

This person said the accusations focused on Apple’s contracts with French carriers, though other countries may also be involved.

In a statement, the European Commission, the union’s administrative arm, which oversees antitrust enforcement in the 27-nation bloc, confirmed that it was examining Apple’s carrier deals. But it said it had not begun a formal antitrust investigation. The commission is not obligated to act until it receives a formal complaint of anticompetitive behavior. That it is already examining the contracts suggests that it is taking the carriers’ concerns seriously.

“We have been contacted by industry participants and we are monitoring the situation, but no antitrust case has been opened,” said Antoine Colombani, a spokesman for Joaquín Almunia, competition commissioner of the European Union.

Elaborating at news conference in Brussels on Friday, Mr. Colombani reiterated that no formal complaints had been brought against Apple, and suggested that regulators would need to judge the relevance of any allegations in such a dynamic sector before taking any steps that could lead to a formal antitrust case.

An Apple spokeswoman, Natalie Kerris, said, “Our contracts fully comply with local laws wherever we do business, including the E.U.”

It was unclear how many carriers were in discussions with the European Union. Based on several interviews with people briefed on iPhone contracts, it appears that Apple’s contracts with some smaller European carriers were stricter than those with larger companies.

People briefed on the carriers’ relationships with Apple, who declined to be named because Apple does not permit them to speak publicly about the contracts, said the terms that some European carriers must accept to sell iPhones are unusually strict, making it difficult for other handset makers to compete.

The issues do not appear to apply to carriers in the United States; an executive at an American carrier said the terms of its contract with Apple were aggressive but not unreasonable. Apple is well known for tightly controlling the design of its products, down to the smallest of details, and closely controlling its manufacturing. Its relationship with carriers, long cloaked by strict nondisclosure agreements, offers a window into the similar levels of control Apple exerts on business partners who want to sell the iPhone.

While European carriers quietly grumble about Apple’s muscle in the marketplace, Apple does not force any of them to sell the iPhone — it does not need to. Carriers are petrified at the thought of not having the smartphone because it remains a huge hit with the public, driving waves of customers to their stores, especially in the months after the latest models are introduced and heavily advertised.

Apple’s contract differs with every carrier that sells the iPhone. Such sales accounted for 56 percent of Apple’s $55 billion in revenue last quarter. In most cases, Apple sets a quota for how many iPhones the carrier needs to sell over a set period of time, usually three years. If it does not agree to the quotas, it does not receive the iPhone.

If quotas are not met, the carrier is obligated to pay Apple for unsold devices, according to one person who negotiated with Apple while at a European carrier.

That remains a largely theoretical risk at this point, however, because demand for the iPhone still exceeds supplies almost everywhere it is sold. Apple’s iPhone 5 was the best-selling smartphone in the world during the fourth quarter of 2012, outselling competing models from Samsung, the biggest maker of mobile devices in the world, according to Strategy Analytics.

Charles Duhigg contributed reporting.

Tech Giants, Learning the Ways of Washington, Brace for More Scrutiny

In 2012, among other victories, the industry staved off calls for federal consumer privacy legislation and successfully pushed for a revamp of an obscure law that had placed strict privacy protections on Americans’ video rental records. It also helped achieve a stalemate on a proposed global effort to let Web users limit behavioral tracking online, using Do Not Track browser settings.

But this year is likely to put that issue in the spotlight again, and bring intense negotiations between industry and consumer rights groups over whether and how to allow consumers to limit tracking.

Congress is likely to revisit online security legislation — meant to safeguard critical infrastructure from attack — that failed last year. And a looming question for Web giants will be who takes the reins of the Federal Trade Commission, the industry’s main regulator, this year. David C. Vladeck, the director of the commission’s Bureau of Consumer Protection, has resigned, and there have been suggestions that the chairman of the commission itself, Jon Leibowitz, will step down.

The agency is investigating Google over possible antitrust violations and will subject Facebook to audits of its privacy policy for the next 20 years. Its next steps could serve as a bellwether of how aggressively the commission will take on Web companies in the second Obama administration.

“Now that the election is over, Silicon Valley companies each are thinking through their strategy for the second Obama administration,” said Peter Swire, a law professor at Ohio State University and a former White House privacy official. “The F.T.C. will have a new Democratic chairman. A priority for tech companies will be to discern the new chair’s own priorities.”

In early 2012, an unusual burst of lobbying by tech companies helped defeat antipiracy bills, which had been backed by the entertainment industry. Silicon Valley giants like Facebook and Google feared that the bills would force them to police the Internet.

At the end of the year, Silicon Valley also got its way when the Obama administration stood up against a proposed global treaty that would have given government authorities greater control over the Web.

The key to the industry’s successes in 2012 was simple: it expanded its footprint in Washington just as Washington began to pay closer attention to how technology companies affect consumers. “Privacy and security became top-tier important policy issues in Washington in 2012,” said David A. Hoffman, director of security policy and global privacy officer at Intel.

“Industry has realized it is important to be engaged,” he continued, “to make sure government stakeholders are fully informed and educated about the role that new technology plays and to make sure any action taken doesn’t unnecessarily burden the innovation economy while still protecting individual trust in new technology.”

At the end of 2012, tech companies were on track to have spent record amounts on lobbying for the year. In the first three quarters, they spent close to $100 million, which meant that they were likely to surpass the $127 million they spent on lobbying in 2011, according to an analysis by the Center for Responsive Politics, a Washington-based nonpartisan group that tracks corporate spending. Even the venture capital firm Andreessen Horowitz hired a lobbyist in Washington: Adrian Fenty, a former mayor of the city.

Technology executives and investors also made generous contributions in the 2012 presidential race, luring both President Obama and Mitt Romney to Northern California for fund-raisers and nudging them to speak out on issues like immigration overhaul and lower tax rates.

In a blog post in November, the center said Silicon Valley’s lobbying expenditures have ballooned in recent years, even as spending by other industries has fallen.

This article has been revised to reflect the following correction:

Correction: January 2, 2013

An earlier version of this article referred imprecisely to the federal agency headed by Jon Leibowitz. He is chairman of the Federal Trade Commission, not of its Bureau of Consumer Protection.

Widening Scrutiny of Google’s Smartphone Patents

This time, the focus is on phones — specifically, on patents that apply to lucrative smartphone technology, and the conduct of Google’s Motorola Mobility subsidiary.

The F.T.C. issued subpoenas in June seeking information from Google and smartphone rivals including Apple and Microsoft, and it questioned representatives of the companies as recently as a few weeks ago, said people briefed on the investigation.

Google owns patents covering communications and data-handling technologies that are crucial for the basic operation of smartphones and tablets — what are known as standard-essential patents. The investigators are scrutinizing the company’s policies for licensing these patents and suing other companies that it claims are infringing on them, said these people, who spoke on the condition that they not be identified.

Google’s Motorola unit pledged to technology standards organizations that it would license the patents to others on “fair and reasonable” terms to stimulate the growth of the industry, benefiting all companies.

Bloomberg reported in June that the F.T.C. had opened an investigation in this area. Since then, the agency inquiry has progressed, and the use of standard-essential patents has been an issue in several court cases and before Congress.

Google said in a statement on Tuesday: “We take our commitments to license on fair, reasonable and nondiscriminatory terms very seriously, and we are happy to answer any questions.”

Standard-essential patents, antitrust experts say, are the modern, high-tech equivalent of certain vital railway lines in the 19th century, like the Eads rail terminal and bridge across the Mississippi in St. Louis, the subject of a historic antitrust decision in 1912. Essential patents, like rail bridges, can become anticompetitive bottlenecks if the corporate owner withholds access to the technology or demands unreasonably high payment.

In Senate testimony in July, Edith Ramirez, an F.T.C. commissioner, speaking of the potential abuse of standard-essential patents, said, “Holdup and the threat of holdup can deter innovation by increasing costs and uncertainty for other industry participants, including other patent holders.”

Google is by no means the only smartphone company with standard-essential patents. But when it agreed to buy Motorola Mobility for $12.5 billion, Google picked up 17,000 patents, including a large trove of important patents relating to wireless devices that Motorola had committed to license.

The Google move was partly to defend itself and the smartphone makers that use its Android software, after rivals had already loaded up on patents.

A few months earlier, Apple and Microsoft led a six-company consortium that outbid Google and paid $4.5 billion for 6,000 patents sold by Nortel Networks, a bankrupt telecommunications company.

In the smartphone patent wars, Apple has relied on its patents on design and the way a person interacts with a mobile device, which are not standard-essential patents.

The F.T.C. investigation indicates that it is keeping an eye on the patent buildup by major high-tech companies. “It’s part of the larger concern that the amalgamation of these giant patent arsenals harms competition,” said William E. Kovacic, the former chairman of the F.T.C. who is now a professor at George Washington University.

“The worry,” said Mr. Kovacic, “is that the new Googles and new Apples will bump into too many patent tollbooths.”

The F.T.C. is not the only agency that has raised concerns about Google’s stewardship of standard-essential patents. The Justice Department, when it approved Google’s acquisition of Motorola and the consortium’s purchase of Nortel’s patents earlier this year, issued a statement praising the “clear commitments” by Apple and Microsoft to license standard patents on fair terms. It also noted their pledge not to try to use such patents to seek court injunctions to stop shipments of rivals’ products.

“Google’s commitments,” the Justice Department statement said, “were more ambiguous and do not provide the same direct confirmation of its standard-essential patent licensing policies.”

In June, Judge Richard A. Posner, a prominent federal appeals court judge in Chicago, dismissed a case between Apple and Motorola, finding the patent claims on both sides lacking. Judge Posner said Google’s Motorola unit could not try to calculate a royalty rate on a standard-essential patent based on “the holdup value — conferred by the patent’s being designated as standard-essential.”

“Motorola,” Judge Posner wrote, “has provided no evidence for calculating a reasonable royalty.”

The greatest potential abuse of a standard-essential patent is to get a court injunction to block a product from a market, said Carl Shapiro, a former chief economist in the Justice Department’s antitrust division.

Conventional patents can be used to stop shipment of an infringing product. But in the case of standard-essential patents, “you have made promises to license and that changes the game,” he said. “You’ve agreed to attenuate your property rights to expand the industry as a whole.”

Companies should not be allowed to use standard-essential patents as weapons, said Mr. Shapiro, a professor at the University of California at Berkeley. They should be barred from using such patents to seek market-blocking injunctions, and then pricing disputes should be left to the courts to decide what is fair, he said.