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Stress-testing Google's Top Ten Antitrust Defenses -- Part IV of Antitrust Pinocchio series

Google announced it was under preliminary investigation by EU Antitrust authorities due to several antitrust complaints filed against it, and it began to frame its antitrust defense against the charges.

  • How well do Google's top ten antitrust defenses hold up to scrutiny?  

    1.   "This kind of scrutiny goes with the territory when you are a large company." (Julia Holtz, Google's Senior Competition Counsel, Google Policy Blog post

    • No. Over 99% of the Global Fortune 1000 are "large," but are not under antitrust investigation for monopolization.
    • This kind of antitrust scrutiny occurs to a very select few companies -- only companies that serially act anticompetitively. 

    2.   "We've always worked hard to ensure that our success is earned the right way -- through technological innovation and great products, rather than by locking in our users or advertisers, or creating artificial barriers to entry." (Julia Holtz post)

Foundem FCC Filing Documents Google search network discrimination; Window into EU-Google antitrust case

Foundem, a UK vertical search competitor to Google, documents serial anticompetitive discrimination on Google's search network, in a data-driven filing to the FCC in the FCC's Open Internet regulation proceeding.

  • It is logical that the data-driven analysis in Foundem's public FCC filing is an integral part of Foundem's antitrust case against Google, which Foundem recently submitted to the EU, but which has not been released yet.
  • Therefore, Foundem's FCC filing may be the best publicly available window into what the EU investigation of Google's anticompetitive practices entails.   

In essence, the Foundem filing accuses Google of monopolistic self-dealing and bundling.

FERC approves Google Energy -- Keep an eye on this one...

"U.S. energy regulators approved a request by Google Inc. to become an electricity marketer, allowing the Internet giant to buy and sell bulk power like a utility" per the WSJ.

My www.GoogleMonitor.com site will keep watch over Google on Google Energy's trading in energy derivatives because it is ripe for abuse, as I explained in my earlier post: "Google's Energy trading proposal sounds eerily like Enron's disastrous derivative scheme".

Per the WSJ: "A spokeswoman for the company has said Google has no plans to sell its energy management service or speculate in energy markets. But she acknowledged the company isn't completely sure how it will proceed."

The concern here is that Google publicly has given itself wide latitutde here to speculate in energy markets in the future... because of their statement above... and because the FERC approved in its order Feb 18th  "blanket authorization... to issue securities and assume obligations or liabilities as guarantor, indorser, surety, or otherwise in respect of any security of a another person..."

Techdirt blames Google Buzz victims

Unfortunately I have to respectfully challenge Mr. Masnick of Techdirt for his reflexive apologia of Google in blaming Google's victims for exerising their legal rights to protect themselves and to get their day in court -- in filing a class action privacy suit over Google Buzz.

  • See Mr. Masnick's post: "And of course, class action lawsuit filed against Google Buzz"  

    Mr. Masnick appears to be ignoring some extremely relevant Google facts, history and serial patterns of misbehavior.

    First, Google has NO customer service!

    • Everyone knows there is no way for a Google user with a problem/concern to connect with a human being by phone or email in order to be heard.
    • Google believes personal interaction and common human courtesy is inefficient and does not scale.

    Second, Google routinely represents itself to the public as highly valuing privacy, security and users. When the record clearly shows it does not.

    •  
      • (Note: Please see my Watchdog site www.GoogleMonitor.com for copious evidence/proof of how Google does not live up to its representations and how many complaints/lawsuits there are against Google on many of the same subjects: privacy, IP, security, and antitrust.)
    • What are people supposed to do when they feel wronged or injured by Google and they can't reach Google for personal resolution? Comment on Techdirt?

    Third, Techdirt is aware, much better than most, that Google is a serial offender on privacy issues.

How much should Google be subsidized?

Pending FCC policy proposals in the National Broadband Plan and the Open Internet regulation proceeding would vastly expand the implicit multi-billion dollar subisidies Google already enjoys, as by far the largest user of Internet bandwidth and the smallest contributor to the Internet's cost relative to its use.

Interestingly, the FCC's largely Google-driven policy proposals effectively would:

  • Promote Google's gold-plated, 1 Gigabit broadband vision for the National Broadband Plan at a time of trillion dollar Federal budget deficits;
  • Recommend a substantial expansion of public subisidies for broadband that would commercially benefit Google most without requiring Google to contribute its fair share to universal broadband service; and
  • Regulate the Internet for the first time in a way that would result in heavily subsidizing Google's out-of-control bandwidth usage. 

I.   Does Google need more subsidies?

Google is one of the most-profitable, fastest-growing, cash-rich companies in the world, with over $10b in annual free cash flow, 17% revenue growth, and ~$25b in cash on hand.

"Boldly Deceptive: FreePress' extreme agenda in their own words" -- great Americans for Prosperity report

Kudos to Phil Kerpen of Americans for Prosperity for their spot-on report of quotes from FreePress that exposes what FreePress is really all about.

Their report shows, in FreePress' own words, that they are a dystopian nightmare masquerading as a public interest group protecting freedom of the press.

 

Google to DOJ/Court on Book Settlement: Good Intentions Trump the Law

Google effectively blew off the DOJ's antitrust, copyright and class action objections to the amended Google Book settlement in Google's 77-page brief to the Federal Court adjudicating the settlement. 

In a nutshell, Google argued that its settlement is "remarkably creative" (p 28), and "fair, reasonable and adequate" (p 67). It focused on the settlement's benefit to humanity: "the benefits of approval are bounded only by the limits of human creativity and imagination" (p 2). Google also effectively instructed the Judge to accept its redefinitions of copyright, antitrust, and class action law and to reject the DOJ's interpretation of the law and its "cramped view of the court's jurisdiction" (p 10).    

The core thrust of Google's argument is political. Google essentially asks the court to make a political, not a legal, decision to:

  • Disregard existing antitrust, copyright, and class action law;
  • Ignore the opinion, expertise and standing of the DOJ, the United States' Chief Law Enforcement Officer;   
  • Effectively rewrite copyright law; and
  • Permanently enthrone Google as effectively the derivative use caretaker and gatekeeper of millions of "orphan works" which Google illegally copied.  

I.   Google's argument is fundamentally political.

Google's Privacy "Buzz" Saw -- Privacy vs Publicacy Series Part XIX

Kudos to Nicholas Carlson of Silicon Valley Insider for an outstanding must-read post on Google's new social media additions to gmail it calls Google Buzz: "WARNING: Google Buzz has a huge privacy flaw."

Takeaways from DOJ's Opposition to Google Book Settlement; Winning the Battle Losing the War?

While Google may be slowly losing the legal battle over the amended Google Book Settlement Agreement, the protracted legal process and Google's political "slow rolling" of the broader process are enabling Google to win the much larger marketplace war for global dominance over digital content and distribution.

  • From a big picture perspective, Google is cleverly "playing" and slow rolling both rights holders and the DOJ because Google understands that time is on Google's side, not the side of rights holders or the Government.
  • Google's market dominance is only growing and becoming more irreversible, and copyrighted material is only being devalued as long as Google is the only entity that can copy it without permission and currently commercialize it for themselves via search without any compensation to rights holders.   

Takeaway #1: DOJ still strongly objects to the proposed amended settlement (ASA).

In the DOJ's latest statement of interest to the court, the DOJ continues to strongly object that the ASA violates three bodies of law: class action, copyright and antitrust. Key opposition quotes: 

Google's "Immaculate Collaboration" with NSA? Part XIX of Privacy-Publicacy Series

Ellen Nakashima may have a career-making scoop with her front page Washington Post investigative reporting piece: "Google to enlist NSA to help ward off cyberattacks."  

  • As Publisher of the Google watchdog site, www.GoogleMonitor.com, I can't say I am surprised about a Google-NSA connection, especially given that over the last year my PrecursorBlog has posted: 
  1. An 18-part "Privacy vs. Publicacy" series;
  2. A 6-part "Security is Google's Achilles Heel" series; and 
  3. A 16-part "The Open Internet's Growing Security Problem" series

Ms. Nakeshima's revelation that Google sought out NSA's help shortly after it suffered massive cyber-attacks, apparently from China, opens a Pandorra's Box of privacy issues given that Google's aggressive "publicacy" (anti-privacy) business model, policies and practices have shown little respect for people's privacy in practice over the last decade.

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