Antitrust

Summary

Does Alphabet Inc. -- arguably the world’s largest organization, with two billion plus users, most all the world’s information, most of the world’s top applications, limitless global ambitions, limited accountability, and self-proclaimed “don’t be evil” moral authority -- actually “do the right thing” as Alphabet publicly professes?  (Alphabet Inc. is the restructured company formerly known as Google Inc.)

If it matters to people that their leaders do what they say, to governments that corporate leaders obey the law, to the media that public leaders are honest to the public, and to the public that the leaders they trust are trustworthy, then this attempt to bring accountability to Alphabet-Google’s near unprecedented leadership, branding, and investment value has merit.

Accumulating evidence of Google’s amoral unaccountability certainly has merit and value to EU law enforcement and to U.S. State Attorneys General law enforcement, because it goes to whether or not Alphabet can be trusted to operate its business honestly and legally on its own; and to be trusted to make honest representations to law enforcement and the public.   

The world is watching and taking note of the FCC’s blatant competition double standard that totally favors America’s dominant edge platforms above most everyone and everything else.  

Consider an apt and illuminating comparison between the competition U.S. wireless broadband providers face versus the competition Silicon Valley’s edge platforms face.

The FCC’s Non-Neutral Internet Competition Policy

The FCC’s 2015 Open Internet Order has an implicit blind-eye competition premise in that it reclassified the broadband provider half of Internet access, and not the “edge” platform provider half, as subject to FCC Title II common carriage regulation.

That is because the FCC focused only on broadband and concluded its level of competition required the strongest possible net neutrality regulation, while it turned a blind-eye toward “edge” platforms in uncritically assuming that “edge” platform networks were competitive and thus did not have to be neutral, open, or transparent.

Are several arms of the U.S. Government giving Google special treatment to enable it to secretly conduct a nationwide, two-year, test of Project Loon -- Google’s ambitious scheme to be the first company to commercialize the stratosphere -- in a manner that risks public safety, and environmental, and other harms?

Google is the ringleader thwarting the FBI’s high priority to make smartphones subject to the Communications Assistance to Law Enforcement Act, CALEA, like all other communications technologies were before smartphones, so that the FBI can continue to wiretap, investigate and thwart terrorism (ISIS etc.), and crime, like it routinely did prior to the smartphone era.  

(Anyone that doubts Google is the de facto encryption ringleader, see the evidence here. And don’t miss the fourth segment of this analysis about how Google cleverly thwarted the FBI in lobbying for a de facto anti-CALEA, last-minute, change to the FCC’s Open Internet order.) 

Google is unique in its leadership, plans, and global marketpower to accelerate the majority of all global Web traffic “going dark,” i.e. encrypted by default. Google’s “going dark” leadership seriously threatens  to neuter sovereign nations’ law-enforcement and intelligence capabilities to investigate and prevent terrorism and crime going forward.

Google is not the only U.S. Internet company endangering the national security of many countries by “going dark” via end-to-end corporate encryption in an environment of exceptional terrorist risk -- Apple has been self-servingly irresponsible as well.

Nevertheless, Google warrants the spotlight and primary focus here on “going dark” for three big reasons.

Google’s ongoing mass indiscriminate surveillance of Europeans’ private activities could threaten quick resolution of the European Court of Justice’s ruling that the US-EU Data Safe Harbor was invalid given the NSA’s “mass indiscriminate surveillance” exposed by Edward Snowden.

Google’s unique, systematic defiance of European sovereignty on these matters could warrant specifically excluding Google from what could be a timely reconstitution of the US-EU Data Safe Harbor, so that one bad actor does not spoil the whole process for the thousands of companies that have respected their Data Safe Harbor responsibilities.

Google is cleverly and stealthily leveraging a Google-friendly-FCC and lax U.S.-Google antitrust enforcement to extend its global Android mobile operating system dominance to increasingly disintermediate and dominate the spectrum administration function embedded in the firmware of smartphones, connected cars, and Internet of Things devices.

Summary

How the DOJ and FTC handle two high-profile Google market behaviors that appear on their face to violate two different U.S. antitrust precedents, will speak volumes to the world about whether U.S. antitrust law still applies to Google, or not.

First, does the DOJ believe that the new search partnership between #3 Yahoo and #1 Google -- in the highly-concentrated U.S. search market -- is anti-competitive like the DOJ concluded previously in opposing the 2008 proposed Google-Yahoo search partnership?

The world’s self-professed know-it-all apparently does know a lot more than we do.

This piece assembles the evidence that Google’s benign PR explanation and stock-enhancement justification for its Alphabet holding company restructuring -- may be the truth, but apparently is not the whole truth and nothing but the truth, about the structural antitrust and privacy risks ahead that it clearly foresees, but is not disclosing.

What we have learned in the last two months is that Google is much more worried than it says about the risks it faces from a variety of real structural changes it may have to make in its core business overseas in the months and years ahead -- where the vast majority of Google’s users are, and from where over 50% of its revenues come.

U.S. merger review double standards are not smart.

Kudos to Senators Mike Lee and Orin Hatch, and Rep. Blake Farenthold for their leadership and wisdom in advancing the SMARTER Act, H.R. 5402, “Standard Merger and Acquisition Reviews Through Equal Rules.”

Senators Lee and Hatch are right in exposing that there is no good reason for companies to have to confront different standards in enforcing our nation’s laws at the Federal Trade Commission and the Department of Justice. Specifically, Senator Hatch hits the nail on the head in saying, “businesses seeking to merge deserve consistent treatment without regard to which agency decides to review the merger.”

It is common sense that companies in every industry should be able to know in advance what consistent antitrust/competition standard they will face if they decide to merge or acquire.

What is not common sense is that only U.S. communications companies must also suffer a second merger review double standard – the FCC’s Public Interest Test (PIT) for mergers. 

Other sectors do not face the redundant burden of securing antitrust agency approval and an additional approval froman independent regulator.