Antitrust

The FTC is now very likely to file an injunction in Federal Court to block Google's proposed acquisition of AdMob, if Google does not walk away from the deal, given that Bloomberg reports that the FTC is "seeking sworn declarations from Google Inc. competitors and advertisers."    

Thanks to John Simpson's post at the ConsumerWatchdog.org, which flagged this succinct and illuminating 2 min 46 sec video "produced by Hungry Beast, a weekly news show on Australian television puts Internet giant Google's huge ambitions and gargantuan reach into dramatic perspective."

THE BEAST FILE: GOOGLE from Hungry Beast on Vimeo.

It is one of the best and most accessible pieces I have seen for the average person to get a better perspective on all things Google.

Today's New York Times front page story "Google's computing power betters translation tool" by Miguel Helft spotlights that Google arguably owns and operates "the world's largest computer." The article quotes a Google  engineering VP explaining that Google's unparalleled computing power enables Google to "take approaches others can't even dream of."

Combine the world's largest computer, with the best automated translation capability for most all of the world's top languages, with reports from the front page of the Washington Post that Google proactively sought help from America's top spy agency, the NSA, for its cyber-security vulnerabilities, and it is not surprising that foreigners would be growing increasingly wary of Google and the extraordinary potential power that Google holds over them. 

So what do foreigners increasingly see Google doing?

First, they increasingly see "The United States of Google," a term Jeff Jarvis coined in his book on Google. Shortly after Google publicly accused the Chinese Government of being behind or complicit in the cyber-attacks on Google:

"Google does not reap the benefits of significant network effects because its search algorithms are centered on the analysis of links, and operate essentially the same way whether one person or six billion are using it." -- said Randall Stross in his Digital Domain column today in the New York Times. 

• While I enjoy Mr. Stross' weekly column and also enjoyed reading his book "Planet Google," the characterization above on "network effects" appears to be another significant antitrust misrepresentation coming from Google.
• May I apologize upfront to Mr. Stross, if I am incorrectly assuming that he got fed this preposterous characterization of "network effects" from Google's antitrust Pinocchio squad that has given us:
  • "Competition is just one click away;"
  • "Its too new to dominate;" and
  • "We want to be Santa Claus;" 

Given that Mr. Stross' article is trying to make the case that Facebook has lots of network effects and "Google does not reap the benefits of significant network effects," it appears that Google is trying to spin a new antitrust defense tall tale that Google faces lots of competition from the likes of Facebook... to create some "reasonable doubt" for upcoming antitrust jury trials that Google is not a monopoly.

George Ford of the Phoenix Center has penned another incisive analysis about the real world impact of net neutrality and the FCC's Proposed Open Internet regulations.

• "Sabotaging Content Competition: Do Proposed Net Neutrality Regulations Promote Exclusion?" is an important read for anyone seeking a substantitve understanding of the impact of the FCC's proposed rules.
  • George Ford and Michael Stern's core conclusion: "...the proposed net neutrality rules of both the FCC and Congress... can actually promote such exclusionary behavior. That is, the incentive to monopolize is greater under net neutrality."

  The Phoenix Center's profound insight here got me thinking, (which is always my highest compliment) so let me share my takeaways building on their conclusion; takeaways that show why net neutrality is such an intellectually and economically bankrupt concept.

  • First, not only is net neutrality "a solution in search of a problem," but the FCC's proposed "solution" would make the net neutrality "problem" they allege worse than the status quo!

Will the FTC strictly enforce antitrust laws in its review of Google's AdMob acquisition? Google-Admob is a watershed decision for the FTC given that:

• Google recently blew off the DOJ's serious antitrust objections to the pending Google Book Settlement;
• The EU opened a preliminary investigation of antitrust complaints against Google from companies in the UK, France and Germany; and
• The DOJ had to play backstop to the FTC and block the Google-Yahoo Ad Agreement, less than a year after the FTC incorrectly assumed in their 4-1 approval of the Google-DoubleClick deal that:
  • Yahoo and others would provide sufficient competition to Google; and
  • Google acquiring DoubleClick would not "substantially lessen competition" or tip Google to a monopoly.    

A recent New York Post article: "FTC inclined to approve Google's acquisition of AdMob" states the deal "may just squeak by federal regulators."

Google announced it was under preliminary investigation by EU Antitrust authorities due to several antitrust complaints filed against it, and it began to frame its antitrust defense against the charges.

• How well do Google's top ten antitrust defenses hold up to scrutiny?  

  1.   "This kind of scrutiny goes with the territory when you are a large company." (Julia Holtz, Google's Senior Competition Counsel, Google Policy Blog post) 

  • No. Over 99% of the Global Fortune 1000 are "large," but are not under antitrust investigation for monopolization.
  • This kind of antitrust scrutiny occurs to a very select few companies -- only companies that serially act anticompetitively. 

  2.   "We've always worked hard to ensure that our success is earned the right way -- through technological innovation and great products, rather than by locking in our users or advertisers, or creating artificial barriers to entry." (Julia Holtz post)

Foundem, a UK vertical search competitor to Google, documents serial anticompetitive discrimination on Google's search network, in a data-driven filing to the FCC in the FCC's Open Internet regulation proceeding.

• It is logical that the data-driven analysis in Foundem's public FCC filing is an integral part of Foundem's antitrust case against Google, which Foundem recently submitted to the EU, but which has not been released yet.
• Therefore, Foundem's FCC filing may be the best publicly available window into what the EU investigation of Google's anticompetitive practices entails.   

In essence, the Foundem filing accuses Google of monopolistic self-dealing and bundling.

Google's antitrust liabilities continue to grow and proliferate, even if many have not yet connected the dots to recognize this ominous and increasingly obvious pattern facing Google. 

It appears Google Buzz' privacy fiasco has generated a different kind of "buzz" than Google had hoped for.

• Two different groups, Comedy.com and WSJ.com have created hilarious videos on Google Buzz.
  1. Don't miss Comedy.com's video "Google Threatens to kill users".  
     • (2 min 3 seconds and don't miss the ending) 
  2. Also don't miss the WSJ.com's video "You're a Bossy Pants, Google" by Peter Jeffrey.
     • (1 min 41 seconds)

If you enjoy these, there are other links to more short humorous videos on Google at the humor page of my watchdog site www.GoogleMonitor.com from The Onion, The Big Honkin, and The Vacationers among others.

Of the dozen or so humor entries at http://googlemonitor.com/content/sections/humor/ my personal favorites are:

• "Google Roommates Episode I" from the Big Honkin (3 min 3 seconds); and
• "The Google Opt-out Village" from The Onion Network (2 min 9 seconds).

  Enjoy and pass them along.