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Google Facebook & Amazon’s Anticompetitive Nontransparent Exchange of Ideas

There can’t be a “free exchange of ideas” without transparent competition for the exchange of ideas.

This is a timely point for three reasons.

First, the DOJ announced: “The Attorney General has convened a meeting with a number of state attorneys general this month to discuss a growing concern that these companies [Google Facebook Twitter] may be hurting competition and intentionally stifling the free exchange of ideas on their platforms." [Bold added.] This “competition” concern ultimately falls in the lap of the DOJ’s Antitrust Division and State Attorneys General.

Second, Senator Hatch, the former Senate Judiciary Committee Chairman who championed the DOJ monopolization case against Microsoft in Congress, wrote the FTC “to urge the Federal Trade Commission  to reconsider the competitive effects of Google’s conduct in search and digital advertising. …much has changed since the FTC last looked at Google’s conduct regarding search and digital advertising.”

Third, twenty State Attorneys General joined the U.S. DOJ in filing an antitrust case against Microsoft in 1998. Current DOJ Antitrust Chief Makan Delrahim served as Senate Judiciary Committee Chairman Hatch’s Chief Counsel and Staff Director throughout the Microsoft antitrust case, and FTC Chairman Joe Simons previously served as Sun Microsystems Inc. lead outside antitrust counsel in 2000 when it was a plaintiff in the appellate U.S. v. Microsoft antitrust case.    

To get to the antitrust crux of whether Internet platforms are “hurting competition and intentionally stifling the free exchange of ideas on their platforms” follow the money, the business model of the online exchange of ideas -- is advertising – whether it be monetization of political, social, or commercial ideas or actions.  

Concerning advertising, the evidence shows America’s most powerful Internet platforms and biggest Internet advertisers, Google, Facebook, and Amazon, are each separate monopoly/monopsony bottleneck exchanges of information, sharing, and ecommerce respectively, that each unilaterally, non-competitively, and non-transparently decide what most consumers find in each of their divided marketplaces part of the Internet.

And each of them evidently has winner-take-all business models that minimally compete directly with each other.

Given the context of this examination above let’s address the two core questions raised: first are Internet platforms “hurting competition?” Second, are these Internet platforms “intentionally stifling the free exchange of ideas on their platforms.

Are Internet platforms “hurting competition?

The short answer is they have already foreclosed most competition for these advertising markets.

Conventional wisdom is incorrect that Google, Facebook and Amazon are direct digital advertising competitors in their core businesses.

In U.S. antitrust precedent, Google is in the search and search advertising business per 2008 and 2010 DOJ Antitrust Division precedents and the 2012 FTC Staff Report on Google antitrust.   

While Facebook was in direct competition with Google in search and search advertising in 2013 via its partnership with Microsoft Bing and Yahoo, it stopped competing with Google in search in 2014 after Google stopped competing with Facebook in social advertising in 2014 in abruptly defunding Google+’s 500m-user social network and shutting down its Orkut 300m-user social network.

It is evident that the fierce competition with Google in PC search and search advertising in 2013 from Facebook, Microsoft, Yahoo, and Apple, doesn’t exist in mobile search advertising today. And the competition and potential competition to Facebook in social advertising in 2012 from Google+, Google’s Orkut, Instagram, and WhatsApp, also doesn’t exist today.

This appears to be classic cartel behavior of dividing up markets and allocating customers.

Conventional wisdom incorrectly sees Amazon to be a direct advertising competitor to Google and Facebook for overall advertising dollars.

However, for antitrust market definition purposes, Google, Facebook and Amazon are in separate advertising markets: Google in search advertising; Facebook in social advertising; and Amazon in merchant platform advertising.

Facebook and Amazon do not search index the web, and the information in each of their apps is <1% of world’s information that Google indexes, so they don’t compete with Google’s search advertising. And Google, Facebook, and Amazon, are the only ad servers that can serve ads to each of their own respective ~90% monopsonies of hyper-aggregated search, social, and ecommerce audiences.

In short, these Internet platforms, Google, Facebook, and Amazon have done more than “hurt” competition, they have effectively foreclosed most competition for the markets of the free exchange of ideas in search, social, and ecommerce.

Are Internet platforms “intentionally stifling the free exchange of ideas on their platforms?”

These platforms are in the fully-integrated business of monetizing the online exchange of commercial, social and political interactions.

When one thinks about the “free exchange of ideas” in an FTC context that means fair and honest competition of ideas affecting commerce, society and politics, given the FTC’s vision statement of: “A vibrant economy characterized by vigorous competition and consumer access to accurate information.

Just like a free market requires the limited government provision of national security, legal tender, and enforcement of contracts and property rights to exist, it also needs an enforcement mechanism of recourse for fraud and misrepresentation (i.e. the FTC.)    

Remember human nature.

If one wanted to “intentionally stifle the free exchange of ideas” for commercial, social, or political purposes, what are the conditions one would want and need to accomplish that outcome?

First, one would need the unlevel playing field that they currently enjoy, where there is asymmetric accountability, i.e. minimal risk that Internet platforms face any real accountability to government beyond episodic public shaming that most users never see or remember.  

Second, one would need no real competitive risk of losing business like Google, Facebook, and Amazon’s winner-take-all, consistent respective revenue growth rates of 20%, 40% and 30% attest and market-leading respective market valuations of $800b, $500b, and $1t confirm.

Third, one would need no real governmental risk of antitrust enforcement and FTC unfair and deceptive practices enforcement accountability for Internet platforms, like Google, Facebook, and Amazon have evidently enjoyed for the last five years.

For example, Google-Android’s over-collection of users’ location data even when users fully opt-out, is just one of seventeen examples of Google deceptively over-collecting users’ personal data without users’ knowledge or meaningful consent.

Pertinent to this current conversation about transparency and “the free exchange of ideas,” is a 2013 Politico Pro article entitled “FTC’s Rosch wanted to sue Google for lying,” which reported that Republican FTC Commissioner Rosch believed Google’s privacy disclosure claim that it collected personal information to improve the user experience was a “half-truth.”

Commissioner Rosch believed Google was really collecting the information to maximize their profits explaining: “That was a fictitious claim. I knew we’d have to litigate that. It was clear to me, because that would wound them very deeply if they had to change that claim.”

Fourth, one would need no requirement for transparency for Internet platforms, unlike what is required of true neutral public exchanges like the NASDAQ and NYSE have for the stock market and the CFTC has for commodity markets, so that there is official transaction transparency, auditability and accountability to prevent the for the unfair and deceptive practices of undisclosed biases/conflicts, self-dealing, front-running, and abuse of business confidential information.   

In sum, America’s most powerful Internet platforms and biggest Internet advertisers Google, Facebook, and Amazon: 1) face minimal competition; 2) are non-transparent and unaccountable businesses; and 3) are not the neutral or indiscriminate public conduits that they publicly represent themselves to be.

Are these platforms “intentionally stifling the free exchange of ideas on their platforms?”

As sure as human nature is clear, if: one has immense power with minimal responsibility, transparency, or accountability; and one can publicly claim to be neutral and objective when it’s evident one is not; and one can benefit greatly from “stifling the free exchange of ideas on their platform;” they non-transparently will stifle the free exchange of ideas.

It is human nature; power corrupts, and absolute power corrupts absolutely.    

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Scott Cleland served as Deputy U.S. Coordinator for International Communications & Information Policy in the George H. W. Bush Administration. He is President of Precursor LLC, an internetization consultancy for Fortune 500 companies, some of which are Google competitors, and Chairman of NetCompetition, a pro-competition e-forum supported by broadband interests. Cleland has testified before the Senate and House antitrust subcommittees on Google. Eight different Congressional subcommittees have sought Cleland's expert testimony and when he worked as an investment analyst, Institutional Investor twice ranked him the #1 independent analyst in his field.

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Precursor LLC Research on Asymmetric Accountability Harms:

Part 1:   The Internet Association Proves Extreme U.S. Internet Market Concentration [6-15-17]

Part 2:   Why US Antitrust Non-Enforcement Produces Online Winner-Take-All Platforms [6-22-17]

Part 3:   Why Aren’t Google Amazon & Facebook’s Winner-Take-All Networks Neutral? [7-11-17]

Part 4:   How the Google-Facebook Ad Cartel Harms Advertisers, Publishers & Consumers [7-20-17]

Part 5:   Why Amazon and Google Are Two Peas from the Same Monopolist Pod [7-25-17]

Part 6:   Google-Facebook Ad Cartel’s Collusion Crushing Competition Comprehensively [8-1-17]

Part 7:   How the Internet Cartel Won the Internet and The Internet Competition Myth [8-9-17]

Part 8:   Debunking Edge Competition Myth Predicate in FCC Title II Broadband Order [8-21-17]

Part 9:   The Power of Facebook, Google & Amazon Is an Issue for Left & Right; BuzzFeed Op-Ed[9-7-17]

Part 10: Google Amazon & Facebook’s Section 230 Immunity Destructive Double Standard [9-18-17]

Part 11: Online-Offline Asymmetric Regulation Is Winner-Take-All Government Policy [9-22-17] 

Part 12: CDA Section 230’s Asymmetric Accountability Produces Predictable Problems [10-3-17]

Part 13: Asymmetric Absurdity in Communications Law & Regulation [10-12-17]  

Part 14: Google’s Government Influence Nixed Competition for Winner-Take All Results[10-25-17]

Part 15: Google Amazon & Facebook are Standard Monopoly Distribution Networks [11-10-17]

Part 16: Net Neutrality’s Masters of Misdirection[11-28-17]

Part 17: America’s Antitrust Enforcement Credibility Crisis – White Paper [12-12-17]

Part 18: The U.S. Internet Isn’t a Free Market or Competitive It’s Industrial Policy [1-4-18]

Part 19: Remedy for the Government-Sanctioned Monopolies: Google Facebook & Amazon [1-17-18]

Part 20: America Needs a Consumer-First Internet Policy, Not Tech-First[1-24-18]

Part 21: How U.S. Internet Policy Sabotages America’s National Security [2-9-18]

Part 22: Google’s Chrome Ad Blocker Shows Why the Ungoverned Shouldn’t Govern Others [2-21-18]

Part 23: The Beginning of the End of America’s Bad “No Rules” Internet Policy [3-2-18]

Part 24: Unregulated Google Facebook Amazon Want Their Competitors Utility Regulated [3-7-18]

Part 25: US Internet Policy’s Anticompetitive Asymmetric Accountability - DOJ Filing [3-13-18]

Part 26: Congress Learns Sect 230 Is Linchpin of Internet Platform Unaccountability [3-22-18]

Part 27: Facebook Fiasco Is Exactly What US Internet Law Incents Protects & Produces [3-26-18]

Part 28: How Did Americans Lose Their Right to Privacy? [4-14-18]

Part 29: The Huge Hidden Public Costs (>$1.5T) of U.S. Internet Industrial Policy [4-15-18]

Part 30: Rejecting the Google School of No-Antitrust Fake Consumer WelfareStandard [4-20-18]

Part 31: Why New FTC Will Be a Responsibility Reckoning for Google Facebook Amazon [4-27-18]

Part 32: “How Did Google Get So Big?” Lax Bush & Obama FTC Antitrust Enforcement [5-23-18]

Part 33: Evident Internet Market Failure to Protect Consumer Welfare -- White Paper [5-31-18]

Part 34: What Happened Since FTC Secretly Shut 2012 Google-Android Antitrust Probe? [6-8-18]

Part 35: Buying WhatsApp Tipped Facebook to Monopoly; Why Didn’t FTC Probe Purchase? [6-19-18]

Part 36: The Sea Change Significance of Simons-FTC Privacy and Antitrust Hearings [6-27-18]

Part 37: New U.S. Privacy & Data Protection Law Is Inevitable Like a Pendulum Swing [7-9-18]

Part 38: Why a US v. Google-Android Antitrust Case Is Stronger than US v. Microsoft [7-16-18]

Part 39: Google-Android’s Deceptive Antitrust Defenses Presage a US v. Alphabet Suit [7-20-18]

Part 40: Case Study of Google Serial Over-collection of Private Data for FTC Hearings [7-30-18]

Part 41: The Unfair and Deceptive Online-Offline Playing Field – FTC Hearing Filing [8-7-18]

Part 42: What Most Stunts FTC Antitrust and Consumer Protection Law and Enforcement? [8-21-18]

Part 43: Why New U.S. Privacy Data Protection Law Will Preempt State Privacy Laws [8-27-18]

Part 44: What’s the FTC Hearing before their Hearings on the Unlevel Playing Field? [9-6-18]

Q&A One Pager Debunking Net Neutrality Myths