Google

Kudos to Tom Hazlett and Vernon Smith for a cogent free market stance against Google's attempt to communalize the airwaves for Google's benefit -- in a great Op Ed in the Wall Street Journal today.

The authors are dead right to challenge Google's "free the airwaves" campaign on spectrum.  Google does not use the word "free" the way most people use it. When they say "free the airwaves," Google is saying, like it does in its push for net neutrality and open access, that it seeks to turn the airwaves in to a public commons where spectrum is communalized, not owned or licensed, available to anyone at no cost to use.

• There are at least four big problems with this communal Google approach:
  • It does not ensure the spectrum is put to its "highest valued use" as Hazlett/Smith argue;
  • It fleeces the taxpayer out of billions of dollars that a public auction would generate;
  • It facilitates mass interference, ruining the utility and value of the spectrum; and
  • It is a corporate welfare and industrial policy designed to freeze in place Google's Internet dominance and protect Google from competition from spectrum owners or broadband providers.  

At core Google's model requires free inputs so it can disintermediate everyone else with its world dominant advertising model.

Senate Antitrust Subcommittee Chairman Kohl sent a letter to the DOJ on the Google-Yahoo ad agreement stating "we conclude that important competition issues are raised by this transaction."

"These issues include: 

• Whether the agreement will lead to higher advertising prices;
• whether search and display are interchangeable and substitutable; and 
• Whether this transaction will strengthen Yahoo as a competitor or perpetuate its decline and even exit from this market; and
• whether there are significant barriers to entry impeding new competitors in this market."   

The letter ends with the thought that they "...would encourage the Department to intervene to protect competition..." if this deal now or in the future were to "...cross the line into an unacceptable, anti-competitive collaboration among competitors..."

It is important to note: Ranking Republican Member Orin Hatch was not a signatory of this letter; he was a signatory of the Subcommittee's letter to the DOJ on the Google-DoubleClick merger. 

Bottom line: The timing of this letter suggests that the DOJ is close to a decision on whether it will block or bless the proposed ad agreement between Google and Yahoo.

The Google-Yahoo ad agreement is at great risk of being blocked by antitrust authorities because of a very serious "tip of the iceberg" problem.

• Google and Yahoo continue to publicly frame the issue as only what is above-the-surface in plain-sight -- i.e. the proposed ad agreement -- or what I describe as the 'tip of the iceberg.'
• Unfortunately for the companies, skilled and dutiful antitrust investigators look deep beneath the surface for the 90% that is  hidden and secret -- the true relationship and incentives between Google and Yahoo -- or what I describe as the rest of the iceberg.
• The reason why the public and press may be surprised if the DOJ challenges the Google-Yahoo ad partnership, is that very few have bothered to dive in and look beneath the surface of this ad agreement to what it means for the overall relationship between Google and Yahoo. 

There are sound reasons our judicial system requires that parties/witnesses testify under oath to tell the truth, the whole truth, and nothing but the truth.

Just when you thought there couldn't possibly be another creepy way Google could threaten privacy, Google does not disappoint. Google is now adding faceprints to what it already knows about you: voiceprints, searchprints, clickprints, homeprints, emailprints, DNAprints, and readerprints -- because Google does not "know enough about you..."

• An excellent article by Jefferson Graham in USA Today informs us that Google is now an industry-leader in... facial recognition technology!
  • In 2006, Google acquired a leading company in facial recognition, and Google is using it now to help simplify the tagging and organization of people's rapidly growing archives of digital pictures through its Picassa photo application.
  • Mr. Graham found a great quote to capture the privacy concern:
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      "I don't like it at all," says Rob Williams, who blogs for the Techgage website. "Google knows what I search for, where I live and how much time I spend on websites. Now they know what my friends look like, too. That's just too much."

The problem is this is part of a much bigger pattern of disrespect of privacy by Google.

Behavioral advertising industry... you have a problem. A BIG problem.

• Consumer reports just released a major consumer poll that shows that the vast majority of American consumers are unaware of how the behavioral advertising industry invades their privacy and that American consumers overwhelmingly want more personal control over their privacy online.  

The BIG problem the behavioral advertising industry has is that the consumer evidence strongly suggests that the industry has not respected anti-fraud consumer protection laws that require fair representation.

• Specifically, the industry has not fairly represented that they are invading individuals' privacy in ways most Americans do not approve of.  
• Simply, the behavioral advertising industry finds itself squarely on the wrong side of the American consumer, as the public and Washington focus attention on the serious Internet privacy problem of Unauthorized Tracking. 

Consider the stark poll results of the widely respected and independent Consumer Reports:     

There was a major tectonic shift in the Internet privacy debate today at the Senate Commerce Committee hearing on Internet privacy. 

Norman Hawker of the American Antitrust Institute released a measured and balanced white paper, "The proposed Google-Yahoo alliance" that recommends the agreement be blocked if Yahoo can't remain a viable competitor to Google and Yahoo.

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  One telling quote: "It strains credulity, however, to believe that Google would agree to an arrangement that gives its chief rival $800 million

  to invest in efforts that would, if successful, reduce Google’s market power."

The paper is well done. It is a value-added read for those focusing on the outcome of this issue. It is also a good complement to my recent white paper: "Googleopoly II Google's predatory playbook to thwart competition."

I found the Wired Magazine's post where they created a Google "Evil Meter" both interesting and telling... 

My new Googleoply II White Paper (see www.googleopoly.net) identifies and documents the twenty-six sources of Google's market power and the five different anti-competitive strategies Google employs to foreclose competition.

• This original and trenchant analysis brings into sharp focus the moorings of a potential antitrust case against the Google-Yahoo ad pact.
• The White Paper also should give pause to even the biggest apologists and cheerleaders for Google -- if they are 'open' to reading it.
• Simply, it is a must-read piece for anyone trying to understand why the DOJ's investigation of the proposed Google-DoubleClick is so serious and important.

The press release for my White Paper is included below:

Internet Expert Unearths Google’s Predatory Playbook:

Why the DOJ Needs to Block the Google-Yahoo Ad Partnership

Partnership Would Further Cartelize Search Advertising -- Harming Advertisers and Publishers

Google's main defense of why Google-Yahoo is not a price-fixing arrangement that prices are set by competitive auction -- is simply not true. The "its an auction" defense is a sham, superficially appealing, but still a cover-up.  

• Google's full court press defense of the deal -- with back to back blogs by Google, plus a New York Times op ed defending the deal -- signal its crunch time at DOJ and that Google is mighty concerned.

Why is Google's "auction" defense a sham?