Antitrust

Art Brodsky of Public Knowledge comes to Google's defense in an extensive broadside attack on my credibility and integrity because I have the gall to stand up to one of his patrons -- Google -- by testifying tomorrow at the Senate Judiciary Subcommittee on Antitrust -- where I will show in great detail why the Google-DoubleClick merger is anti-competitive and why I recommend that it should be blocked by the FTC. Stay tuned.

Mr. Brodsky is not the first person to come after me for my provocative forward-thinking and unconventional views, nor will he be the last.

A new antitrust analysis by leading academics in the field provides some very relevant and eyebrow-raising new third-party survey data that appears to debunk Google's main defense of the DoubleClick acquisition: that Google and DoubleClick are not competitors. 

• This first and most comprehensive market survey of advertisers suggests that DoubleClick's customers do indeed view Google and DoubleClick offering as substitutes/competitors for their ad dollars.  

For those following this merger review closely, this study is a must read:

• "An Antitrust Analysis of Google's Proposed Acquisition of DoubleClick," by Robert Hahn, Director of the AEI-Brookings Joint Center for Regulatory Studies, and Hal Singer, President of Criterion Economics.

Why is this study important?

Richard Waters of the FT produced a very insightful and newsy article on how Google reportedly passed on buying DoubleClick two years earlier over internal concerns about how that alignment of businesses could clash with Google's famed "don't be evil' highmindedness.

• It's a must read article for Googlephiles.

My big takeaway from this article was an undercurrent of Google's struggle over internal controls to ensure Google's "ethics" are carried out in practice.  

The New York Times (and others) reported yesterday Google's announcement that it was launching a "Gadget ads" program  which is essentially display-ad-serving to "widgets' which are essentially "mini-websites" within websites.

It is getting harder and harder for Google antitrust lawyers to argue with a straight face that Google does not compete in the market of "display-ad-serving" with DoubleClick.

• Google is the world leader in "serving":
  • search text ads
  • contextual ads;
  • video display ads through YouTube,
• And is now entering: 
  • mobile ad- serving;
  • and widget ad-serving to these mini-websites withing websites.
• Google's definition of "ad-serving" is increasingly becoming too-cute-by-half semantic wordplay and not a functional or factual definition.

Antitrust officials should ask Google if they are colluding with DoubleClick to not compete while the merger is pending.

So what are the implications of Microsoft losing its antitrust appeal in the EU's Appeals court -- which was a page one story in all the major papers?

More and different than most may think.

The EU is signalling in it's harsh treatment of Microsoft, that the EU is going to be tough on "dominant" firms. 

The New York Times has twin articles today that provide fresh additional evidence of why the Google-DoubleClick merger is anticompetitive: "Google to sell Webpage ads on Mobile phones" and "Times stops charging for parts of its website." 

The first article is yet more compelling evidence that Google's main merger defense -- that Google and DoubleClick don't compete in serving ads -- is simply bogus.

Evidence continues to mount that the Google-DoubleClick merger presents serious anti-competitive concerns.

Let me share a series of antitrust developments over the last several days that cumulatively are very significant.

First, and most ominous, is that Yahoo, the weak #2 in the search market, which used to use Google's search engine, has been actively considering exiting the search business and outsourcing to #1 dominant Google or distant #3 Microsoft, because investors want the greatly expanded investment returns such a revenue-enhancing and cost cutting move would generate for shareholders.  

The US Department of Justice in comments to the FCC said that it is opposed to "net neutrality" per an AP story.

Now both the US Department of Justice and The US Federal Trade Commission, the agencies legally responsible for investigating anti-competitive practices, officially have stated opposition to net neutrality regulation/legislation. 

It is never a good omen for a merger's approval outlook, when EU antitrust authorities can't wait to investigate the impact of the merger and proactively inititiate their own antitrust investigation -- before their official process even gets started.

Google's antitrust lawyers have to be bummed by the development reported by Reuters that: "EU questions customers over Google-DoubleClick deal."

The Financial Times had a noteworthy article about Google's role as an editor of content and defender of free speech -- when Google finds it convenient: "Thailand lifts Youtube ban after Google agrees to block some clips."

This article is an interesting juxtaposition to Google CEO Eric Schmidt's very recent comments on the importance of free speech at a speech before the Progress and Freedom Foundation. 

• "We need to defend freedom of speech as more speech comes on line. ...Let’s do this in the right way. Let’s preserve the openness and the freedom of speech principles. You could use Internet censorship, for example, as a non-tariff trade barrier, which we all need to fight because governments, especially non-U.S. governments, have an incentive to some degree to control the populations -- to do all the things that are obvious if you’re afraid of empowering your citizens."

 The FT article is a good opportunity to review if Google's actions support Google's rhetoric when it comes to Google defending free speech...