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How Google-Android’s “Big MetaData” Collection Model Is Anticompetitive
Submitted by Scott Cleland on Tue, 2016-01-19 10:31
The EC’s Antitrust Chief, Margrethe Vestager, is signaling that some Big Data may be anticompetitive. She recently told a conference: "These incredible powerful tools, like search engines and social media, are available for free. In many cases, that's because we as consumers have a new currency that we can use to pay for them – our data. …If a company's use of data is so bad for competition that it outweighs the benefits, we may have to step in to restore a level playing field."
The issue of whether privacy/data protection violations can be anti-competitive in Google’s case is now especially ripe.
First, European privacy authorities are convening February 2nd to determine the fate of the US-EU Data Safe Harbor; and they also are working towards adopting a new EU General Data Protection Regulation.
Second, Ms. Vestager currently is in the process of very likely ruling that Google did abuse its search dominance; and that a new additional Statement of Objections is warranted because Google also has abused its Android OS dominance.
Google’s unique consolidating dominance of most all of the largest Internet functions (search, mobile, advertising, analytics, video, browser, maps, apps, email, translation, DNS routing, and #2 in social to Facebook) means Google in the only comprehensive “Big Metadata” company that collects macro and micro metadata and personal data, on global Internet usage of all types, functions, systems and devices.
As big as Facebook has become, it probably captures less than a tenth of the global meta-data that Google does. So when it comes to vacuuming up global metadata and personal data, Alphabet-Google is a category of one.
How do we know Google’s uniquely big data sets can be anti-competitive?
In 2009, the U.S. DOJ officially concluded in the then proposed Google Book Settlement, that "The seller of an incomplete database... cannot compete effectively with the seller of a comprehensive product," in its friend of the court brief, which challenged the proposed Google Book settlement as anticompetitive.
How do we know Google has been purposeful in creating the world’s biggest database to gain, maintain, and extend its market dominance? Listen to Google:
“Never delete anything, always use data – it’s what Google does…” Tom Kershaw, Google Cloud Platform director NYT 3-15.
"Scale is the key. We just have so much scale in terms of the data we can bring to bear." Google Chairman Eric Schmidt Bloomberg 10-09.
"We don't have better algorithms than everyone else; we just have more data." Google’s Chief Scientist Peter Norvig ECPM Blog 3-10.
"What's ubiquitous and cheap? Data. And what is scarce? The analytic ability to utilize that data…”Google’s Chief Economist Hal Varian, Wired 5-09.
“It’s obvious what our strategy should be. It’s to work on problems on a scale no one else can.” Google co-founder Sergey Brin. Wired 6-09.
"Our model is just better… Based on that, we should have 100% share.” Google Chairman Eric Schmidt 12-09 .
“We're still 1 percent to where we should be…what I'm trying to do is… really scale our ambition.” Google CEO Larry Page, Fortune 12-12.
How do we know Google appreciates that violating user privacy is an anticompetitive advantage?
"I don't believe society understands what happens when everything is available, knowable and recorded by everyone all the time," Google Chairman Eric Schmidt WSJ 8-10.
"We know where you are. We know where you've been. We can more or less know what you're thinking about." Google’s Eric Schmidt Atlantic 10-10.
“Virtually everything that we want to do, I think, is somewhat at odds with locking down all of your information for uses you haven’t contemplated yet…” Google CEO Larry Page NYT 10‐12.
“The impact of the data revolution will be to strip citizens of much of their control over their personal information....The communication technologies we use today are invasive by design, collecting our photos, comments and friends into giant databases that are searchable and, in the absence of regulation...[it is all] fair game” Google Chairman Eric Schmidt CSM 5-13.
Why is Google’s Big Metadata dominance anti-competitive?
Google is the only company with omni-directional global Internet ambitions and efforts in train. All other “big data” companies collect relative slivers of the metadata and/or personal data that Google routinely collects.
All other “big data” companies have huge relative data collection holes or blind-spots relative to Alphabet-Google, because the don’t have anywhere near the combination of: global users (2 billion); information/data stored >100m gigabytes; URLs crawled >60 trillion; machine readable facts ~1.6b facts; Internet traffic usage involvement (~50%); operating system adoption 1.4b devices; browser adoption >1b devices; tracking analytics (~98% share of top 15m sites); digital advertising ($58b ~5x #2); infrastructure (1400 server points-of-presence in 140 or 68% countries); comprehensiveness of offered apps; and etc.
Thus Google can and does anti-competitively leverage its Big Metadata dominance to extend its dominance into ever-increasing adjacent markets, by predatorily using its unbeatable metadata knowledge and control to preference Google products and services over competitors’ products and services in the adjacent markets.
What is the main point here?
Given that EU authorities have already concluded that Google is Europe’s single biggest competition and privacy problem, and given that EU authorities are realists and can expect little significant FTC or DOJ enforcement of U.S. antitrust or privacy law against Google given its exceptional political power, EU competition and privacy authorities need to be very practical.
The EU needs to focus their competition and data protection law enforcement where it will have the most return for Europe and the world, by applying the famed Pareto principle, i.e. the 80-20 rule or law of the vital few, to Google, and practically focus most of their antitrust and privacy enforcement effort on the only comprehensive “Big Metadata” company which also is the worst global privacy bad actor – Alphabet-Google.
Logically and practically, if the evidence proves the Big Metadata problem is relatively concentrated, the EU solution needs to be relatively concentrated to match the problem.
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 emergent enterprise risk consultancy for Fortune 500 companies, some of which are Google competitors, and Chairman of NetCompetition, a pro-competition e-forum supported by broadband interests. He is also author of “Search & Destroy: Why You Can’t Trust Google Inc.” Cleland has testified before both the Senate and House antitrust subcommittees on Google and also before the relevant House oversight subcommittee on Google’s privacy problems.