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Bork-Sidak's Fatally Flawed Google Antitrust Defense

As an unabashed Milton Friedman conservative, I strongly agree with Judge Robert H. Bork and Professor J. Gregory Sidak that antitrust law's purpose is to protect competition and the competitive process and not to protect competitors. I also hold my fellow conservatives in highest regard. However, as a highly-experienced and esteemed judge and professor, they know they must prove their case on the merits. In Google's case, they have not.

While it would be difficult to challenge the sophistication of their legal analysis, it is not hard to discredit the sophistication of their economic analysis of the relevant market, economics, and behavior in question. Their defense indicates that they have fully-adopted Google's core economic premises and public-representations, so their skilled legal arguments can do no better than the fatally-flawed material with which Google has given them to work.

Specifically, their legal analyses rest upon a misunderstanding of the relevant market in question. Since antitrust prosecution is fact-driven, not theory dependent, no amount of legal or economic theoretical elegance can overcome a fatally-flawed factual predicate.

An FTC Googleopoly Get out of Jail Free Card? -- Part 7: Google Unaccountability Series

Connecting the dots, Google may gain a de facto Monopoly® "Get out of Jail Free" antitrust settlement from the FTC before the election. Bloomberg reports that the FTC has pushed to move up the conclusion of its antitrust investigation from "end of the year" to mid-September. Assuming that report is accurate, it has big implications. Let's connect the dots.

First, the sudden acceleration of the endgame of the FTC investigation strongly suggests external circumstances (i.e. the EU-Google antitrust settlement negotiations timetable) are driving the timing/outcome of the FTC's Google investigation, given that the EU and Google reportedly reached an "understanding" in late July that could result in a settlement of antitrust charges. This suggests the FTC is considering becoming a tagalong to the EU settlement, despite the very different law and process in the U.S.

Google Mocks the FTC's Ineffectual Privacy and Antitrust Enforcement -- Google Unaccountability Series Part 3

"We set the highest standards of privacy and security for our users," Google said in response to the FTC fining Google $22.5 million: for hacking a competitor's system in order to short-circuit a competitor's privacy protection of its users; and for violating the FTC-Google-Buzz enforcement Order without any admission of liability whatsoever. In addition, Google characterized the problem as a minor unintentional technical mistake (like it originally characterized its Street View WiSpy privacy violations), and then patted itself on the back that no personal information was collected by its actions.

Google's public reaction mocks the FTC's mission statement -- "to prevent business practices that are anti-competitive, deceptive, or unfair to consumers" -- which ironically is featured in the FTC's announcement of the Google privacy fine. Google acceded to a small misrepresentation fine for Google, as simply the cost of doing business the Google way.

Who but Google is Thriving in Online Advertising?

Evidence abounds that the industry business model of online advertising, minus Google, is shockingly weak competitively, given how many people assume advertising is supposed to be the viable competitive monetization engine that will sustain the "free and open Internet" long term.

Anyone open to connecting-the-dots of recent public evidence will see an obvious dichotomy: Google is thriving, while much of the rest of the online advertising industry is struggling despite unprecedented: opportunity to reach users, technological efficiencies, and access to troves of private data to target ads to produce more revenue growth.

Examine the accumulating troubling evidence of how weak online advertising competition has become.

The Internet Advertising Bureau's latest reporting of 15% online advertising growth for the industry in 1Q12 masks the large Google vs. competitor revenue growth dichotomy. Given that Google grew 24% 1Q12 and comprises almost half of all U.S. online advertising per eMarketer, I calculate that the rest of the online advertising industry is growing only about 8%. That means Google is growing three times faster than its online competitors and continues to take market share at an accelerating rate.

Why FTC's $22.5m Google Privacy-Fine is Faux Accountability

If one fact-checks and puts in perspective the FTC's expected $22.5m privacy fine of Google -- for bypassing millions of Apple Safari users' privacy and security settings to add a tracking cookie to track users browsing activity -- it looks like faux FTC accountability of Google. Close scrutiny of the FTC's oversight record of Google's exceptionally bad consumer record and very long privacy rap sheet suggests that Google could have little to fear from the FTC on pending privacy or antitrust enforcement going forward, despite PR and optics to the contrary. Unfortunately, the evidence to date indicates the FTC's enforcement oversight of Google has had minimal accountability or deterrent effect on Google's behavior.

To be fair to the FTC, the FTC does not have all the legal authority it needs to fully address the Google privacy enforcement problem, but that being acknowledged, many poor FTC decisions have further self-limited the FTC's ability to confront the exceptional Google enforcement problem.

I. Google appears to enjoy faux FTC Accountability.

Google Responds to the EU's Antitrust Ultimatum -- A Satire

6 June 2012

Joaquín Almunia
European Commission, Vice President for Competition Policy
Brussels, Belgium

Dear Joaquín Almunia,

Thank you for your May 21 letter sharing your Google antitrust concerns, and for your offer of discussions to avoid "adversarial proceedings."

In this dispute among equals, we would like to counter with Google's concerns about your antitrust investigation.

First, no matter how many times we explain our business or how slowly we talk, your investigators can't seem to grasp the expanse of our algorithmic genius or the fact that our engineers are higher life forms not bound by the laws of man or nature. Going forward we will only talk to fellow gifted engineers.

Second, the velocity of Google's innovation and the fast-moving nature of these markets mean antitrust authorities can't keep up with us. By the time the EU figures out that we have monopolized one market, we will have monopolized many more. Surrender while you still can. Resistance is futile. Get over it.

Google's Privacy Rap Sheet

Compare Google's privacy record over the last decade here with Google's public representations below to determine for yourself if they match up.

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