Antitrust

I was very impressed with Ohio State law Professor Peter Swire's insightful analysis of why, in the context of the FTC antitrust review of the Google-DoubleClick merger, privacy harms are relevant to the traditional antitrust analysis.

• "In brief, privacy harms can reduce consumer welfare, which is a principal goal of modern antitrust analysis. In addition, privacy harms can lead to a reduction in the quality of a good or service, which is a standard category of harm that results from market power. Where these sorts of harms exist, it is a normal part of antitrust analysis to assess such harms and seek to minimize them."
• "To the extent proponents of the merger seek to justify the merger on efficiency grounds, such as personalization, then privacy harms to consumers should be considered as an offset to the claimed efficiencies."

In my Googleopoly analysis and my Senate Judiciary Subcommittee testimony on the Google-DoubleClick merger, I viewed the massive aggregation of customer clickstream data to be highly anti-competitive as it would create a tipping point and unsurmountable barriers for others to compete.

The American Antitrust Institute, an independent non-profit advocacy organization just released its white paper:

• "Google Acquisition of DoubleClick: Antitrust Implications" in which it urges the FTC to block the Google-DoubleClick merger as anti-competitive.

Like my Googleopoly analysis from this July and my Senate Judiciary Subcommittee testimony in October, the aai concludes that Google and DoubleClick are indeed direct competitors and that: "the merger presents a relatively straightforward case for challenge under the horizontal and non-horizontal merger guidelines."

• Moreover, the aai stated: "We also see a risk of significant foreclosure effects from Google's control over DoubleClick's publisher and advertiser tools and integration of those tools with Google's dominant search engine and contextual advertising network."

Bottom line: This merger obviously raises serious anti-competitive issues and I continue to believe it should be blocked, but that does not mean that I still think it will be blocked by the FTC -- I no longer do.

Isn't it illuminating that eBay, the online auction monopoly with 95% market share per Jupiter Research, and the owner of Skype that is lobbying hard for regulation and legislation to force the "unlocking of phones" and mandate net neutrality regulation -- is so uncooperative with law enforcement trying to crack down on organized theft?

• Could it be that calling for others to be "open" is just code, cover and justification for stealing other's property or property rights?

Reuters reported last week: "U.S. retailers want online sellers to fight theft." 

•  "U.S. retailers and police called on Congress on Thursday to require online auction sites such as eBay to post the serial numbers of items for sale to help crack down on gangs of professional shoplifters." 

• ""Operators of sites such as eBay have historically failed to provide any meaningful information to retail investigators," said Karl Langhorst, director of loss prevention for Randall's and Tom Thumb stores, a division of Safeway Inc.""

Seems like more hypocrisy and situational ethics from eBay, where they seek corporate welfare from government, while not cooperating fully with law enforcement to fight "organized theft."

• Maybe there is "Honor among thieves."

In addition to delivering another spectacular quarter of revenue growth, Google provided some new and current information that is highly relevant to the FTC and EU review.

First, compelling evidence of Google's market power is mounting.

Art Brodsky's of Public Knowledge recently posted his long defense of Moveon.org and Google for their blocking the free speech of U.S. Senator Susan Collins.

• Brodsky claims that Moveon.org has called off its trademark protection dogs and is now allowing Google to place anti-Moveon.org ads now that they blocked last week at Moveon.org's urging.
  • How skulkingly magnanimous of them!

What appears to be missing from this sleight-of-hand mea culpa, is Google/Moveon.org or both of them:

• admitting they made an egregious mistake in conspiring to block the free speech of a U.S. Senate candidate;
• taking full responsibility for the Internet free speech censorship;
• pledging it won't happen again; and
• explaining that they have taken sufficient actions (policy changes) so it won't reoccur.

I doubt a congressional panel, the press or the blogosphere will drop this issue just because one of Google's Poodles organizations, Public Knowledge, posted a preemptive defense on the Huffington Post to try and frame this issue before their "progressive" base got a whif of their week-old anti-free speech droppings.

Mr. Brodsky also claims that Google and Moveon.org have never limited free speech before.

How timely for the Google-backed Open Internet Coalition to be writing Congress asking for Congressional hearings on allegations of censorship of free speech on the Internet.

Robert Cox, the Founder and President of the Media Bloggers Association, a non-partisan professional standards group, reports that Google has blocked the running of U.S. Senator Susan Collins' anti-Moveon.org ads on Google.

•  "Internet giant Google has banned advertisements critical of MoveOn.org, the far-left advocacy group that caused a national uproar last month when it received preferential treatment from The New York Times for its “General Betray Us” message."
• "The ads banned by Google were placed by a firm working for Republican Sen. Susan Collins’ re-election campaign. Collins is seeking her third term."

  Google has a particularly tortured concept of "free speech" if it is willing to editorially ban Republican speech that opposes its most important and high-profile lobbying ally in the net neutrality fight.

  • It is painfully ironic that Google CEO Eric Schmidt just gave a major policy speech in August on Google's main public policy priorities and stated that:

    • "We need to defend freedom of speech as more speech comes on line."

    • By banning opposing political views, is Google defending free speech or practicing "Internet censorship" as the "Ultimate Internet Gatekeeper?

Kudos to Professor Joseph Turow on his spot on editorial "Don't give Google double the power" about the very troubling implications of the Google-DoubleClick merger.

• Don't miss reading it.   

http://washingtontimes.com/article/20070930/COMMENTARY/109300009/1012/commentary

Below is the summary of my testimony before the Senate Judiciary Subcommittee on Antitrust yesterday on why the Google-DoubleClick merger should be blocked.

• I find the Google-DoubleClick merger review process to be one of the most illuminating and fascinating ways to explore the future of the business of the Internet.
  • I also strongly believe the trajectory of Internet content business will be profoundly affected by the outcome of this merger review.
• I highly recommend you review the six charts I prepared which provide a very useful visual overview of why this merger is so far-reaching, little understood and important. 
• My full testimony and my previous white paper, "Googleopoly" can be found at www.googleopoly.net.