You are here

Facebook

The Unfair and Deceptive Online-Offline Playing Field – FTC Hearing Filing

Submission for: U.S. FTC  Fall 2018 Hearings on “Competition and Consumer Protection in the 21st Century” Topic #2: “Competition and Consumer Protection in Communication, Information, and Media Technology Networks” FTC Project # P181201 (PDF of this filing is here.)

The Unfair and Deceptive Online-Offline Playing Field of Divergent U.S. Competition and Consumer Protection Policy
Internet policy* has been the determinative dynamic of U.S. competition and consumer protection in the 21
st
Century. Government exemptions/immunities evidently heavily favor regulatory arbitrage over free market competition, and drive the evident divergent reality where most of U.S. competition and consumer protection problems occur online not offline.

Google-Android’s Deceptive Antitrust Defenses Presage a US v. Alphabet Suit

The likely probability of an eventual U.S. v. Alphabet Sherman monopolization case improved further now that we know how weak Alphabet-Google’s likely primary U.S. antitrust defense of Android is.

This means not only is a potential U.S. v. Alphabet antitrust case stronger than the seminal successful and upheld U.S. v. Microsoft precedent, but Google’s relative antitrust defense is much weaker too.

Google’s CEO Sundar Pichai’s public Android antitrust defense has fatal flaws.

First, Google-Android claims Apple iOS is a direct competitor when factually in an antitrust context it is not.

New U.S. Privacy & Data Protection Law Is Inevitable Like a Pendulum Swing

It is a matter of when, not if, Congress will pass national privacy and data protection law for the 21st century.

It’s inevitable, because the U.S. privacy policy to date is operating as predictably as a pendulum swinging. Consider the evident big picture, pendulum dynamic at work here.

The Sea Change Significance of Simons-FTC Privacy and Antitrust Hearings

Much bigger change is afoot at the FTC than many may appreciate. An awakened and reinvigorated Simons-FTC lies ahead as do eventual new FTC calls for 21st century privacy and data protection legislation. Don’t be fooled by the glacial pace of the 2017-18 FTC appointment/confirmation process for a near clean slate of FTC leadership.

We now have strong official directional evidence from FTC Chairman Simons that the next two-and-a-half years are going to be very different from the last five years, 2013-17.

Buying WhatsApp Tipped Facebook to Monopoly; Why Didn’t FTC Probe Purchase?

Anyone concerned with the anticompetitive state of digital advertising, and how to fix it, should focus like a laser on the circumstances surrounding the 2014 FTC’s pass on formally investigating if the Facebook-WhatsApp acquisition would “substantially lessen competition” under the Clayton Antitrust Act.

That obvious FTC mistake in hindsight, triggered a winner-take-all domino effect that not only tipped Facebook to a social advertising monopoly, but also tipped the overall digital advertising market to the anticompetitive digital advertising cartel that evidently predominates today.

Some brief context is helpful here. This big 2014 FTC mistake was the fourth of a pattern of big anticompetitive FTC mistakes concerning the digital advertising marketplace over the last decade.  

What Happened Since FTC Secretly Shut 2012 Google-Android Antitrust Probe?

If only the 2012 FTC appreciated “an ounce of prevention is worth a pound of cure,” the Simons-FTC would not be left to treat and contain the now evident, out-of-control, Androidopoly epidemic.

Google’s 2012 search-syndication monopoly scale has rapidly metastasized Google’s market power in scope to: Android licensable OS, Google Play app store, Google Location Services, Chrome browser, Google Maps, and YouTube video.

Lax 2013-2017 FTC antitrust enforcement has consequences.

Evident Internet Market Failure to Protect Consumer Welfare -- White Paper

Below is the executive summary of my new white paper, “Internet Market Failure to Protect Consumer Welfare,” which can be accessed here.

It is a timely and relevant submission to two different and current U.S. Department of Justice efforts to learn more about the impact of Internet-related issues.

 

1.      Submission for: the U.S. DOJ Cyber-Digital Task Force June 2018 Report to the Attorney General
 Tasked to “…ensure that Internet-based technologies remain sources of enrichment, rather than becoming forces of destruction and vectors of chaos;” and

 

The U.S. Needs Network Reality Policy

In 2003, Professor Tim Wu coined the term “net neutrality.”

Fifteen years later, it’s now time for a network reality check. That’s because net neutrality is back in the news with a quixotic Senate vote that proposes what a majority of the House and the FCC, and the President all oppose, all while rejecting real legislative proposals to enshrine net neutrality consumer protections permanently into law.   

How is network reality today different from 2003?

When net neutrality was conceived in 2003, Amazon was a company with ~$5b in revenues, Google just started generating revenues, and Facebook didn’t exist. Now America’s largest network company by annualized revenues is Amazon at $193b, not AT&T, at $160b.

The annualized revenues of the three largest edge-networks, Amazon, Google, and Facebook will likely surpass the collective revenues of the three largest ISP networks, AT&T, Verizon, and Comcast, sometime this fall.

If current revenue growth rates continue, expect Amazon, Google, and Facebook’s collective revenues to be twice that of AT&T, Verizon, and Comcast in less than three years.

That is network reality.

New FTC Faces Same Unfair Competition Problem with Google Amazon & Facebook

Note: This analysis is a response to DOJ Antitrust Chief Makan Delrahim’s public call last month for “fresh thinking” on antitrust approaches to digital platforms. He said: “…we should encourage fresh thinking on how our legal tools apply to new digital platforms. We need more thinking—diverse thinking—about these questions. And, we need a civil discourse on this topic.” “I believe that, as enforcers, we should be open and receptive to empirical evidence that companies in digital markets may be engaging in predatory pricing or other exclusionary conduct to drive out competition and cause long-run harm to consumers.”

 

Summary: Fresh Thinking on the Unfair Competition Problem of Google, Amazon, and Facebook.

Will protecting the process of fair competition be a priority of the new Simons-FTC?

Why New FTC Will Be a Responsibility Reckoning for Google Facebook Amazon

“The Responsibility Reckoning” that everyone has been witnessing over the last year evidently is finally coming to the FTC -- the Federal Government’s main Internet accountability agency in “The Era of Internet Irresponsibility” -- with the Senate confirmation of a clean slate of FTC commissioners -- Joe Simons (Chairman), Rohit Chopra, Christine Wilson, Rebecca Slaughter and Noah Phillips.

Close observers of the FTC appreciate that since Google politically shut down all five FTC antitrust probes of itself January 3, 2013, FTC antitrust and privacy accountability of Google, Facebook, and Amazon, evidently ceased, and remained dormant until yesterday’s Senate confirmation of the new FTC sheriff and deputies that will be sworn in soonest.

The facts of this de facto, 2013-2017, FTC political pardon of Internet platforms -- are overwhelming (see below.) 

Sadly, potential complainants against Google, Facebook and Amazon, got the tacit message over the last five years that the FTC’s leadership was more concerned with protecting Internet platforms’ welfare than consumer welfare, so they reasonably took their complaints to the EU.

Pages

Q&A One Pager Debunking Net Neutrality Myths