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Competition

Google-Android’s Deceptive Antitrust Defenses Presage a US v. Alphabet Suit

The likely probability of an eventual U.S. v. Alphabet Sherman monopolization case improved further now that we know how weak Alphabet-Google’s likely primary U.S. antitrust defense of Android is.

This means not only is a potential U.S. v. Alphabet antitrust case stronger than the seminal successful and upheld U.S. v. Microsoft precedent, but Google’s relative antitrust defense is much weaker too.

Google’s CEO Sundar Pichai’s public Android antitrust defense has fatal flaws.

First, Google-Android claims Apple iOS is a direct competitor when factually in an antitrust context it is not.

Why a US v. Google-Android Antitrust Case Is Stronger than US v. Microsoft

SUMMARY

The impending EU-Google-Android abuse of dominance conviction and expected record fine and substantial behavioral prohibitions, begs the question of how U.S. antitrust enforcers will eventually act on the outcome of their own Google-Android investigation?  

Buying WhatsApp Tipped Facebook to Monopoly; Why Didn’t FTC Probe Purchase?

Anyone concerned with the anticompetitive state of digital advertising, and how to fix it, should focus like a laser on the circumstances surrounding the 2014 FTC’s pass on formally investigating if the Facebook-WhatsApp acquisition would “substantially lessen competition” under the Clayton Antitrust Act.

That obvious FTC mistake in hindsight, triggered a winner-take-all domino effect that not only tipped Facebook to a social advertising monopoly, but also tipped the overall digital advertising market to the anticompetitive digital advertising cartel that evidently predominates today.

Some brief context is helpful here. This big 2014 FTC mistake was the fourth of a pattern of big anticompetitive FTC mistakes concerning the digital advertising marketplace over the last decade.  

Evident Internet Market Failure to Protect Consumer Welfare -- White Paper

Below is the executive summary of my new white paper, “Internet Market Failure to Protect Consumer Welfare,” which can be accessed here.

It is a timely and relevant submission to two different and current U.S. Department of Justice efforts to learn more about the impact of Internet-related issues.

 

1.      Submission for: the U.S. DOJ Cyber-Digital Task Force June 2018 Report to the Attorney General
 Tasked to “…ensure that Internet-based technologies remain sources of enrichment, rather than becoming forces of destruction and vectors of chaos;” and

 

“How Did Google Get So Big?” Lax Bush & Obama FTC Antitrust Enforcement

A recently aired CBS 60 minutes segment asked: “How Did Google Get So Big?”

The shortest answer is illegal acquisition of market power.

The simple answer is an epic bipartisan failure of antitrust law enforcement by both the W. Bush FTC, in the 2007 bipartisan approval of Google-DoubleClick; and by the Obama FTC, in the 2010 bipartisan approval of Google-AdMob, and in the 2013 bipartisan, abrupt closure of all five FTC antitrust probes of Google for a five year period.

Concerning Google antitrust, both Administrations, both parties, and both the Senate and House overseers own this bipartisan, FTC-created, Google-monopolization mess. It demands bipartisan antitrust enforcement cooperation, investigation, and solutions soonest.

The U.S. Needs Network Reality Policy

In 2003, Professor Tim Wu coined the term “net neutrality.”

Fifteen years later, it’s now time for a network reality check. That’s because net neutrality is back in the news with a quixotic Senate vote that proposes what a majority of the House and the FCC, and the President all oppose, all while rejecting real legislative proposals to enshrine net neutrality consumer protections permanently into law.   

How is network reality today different from 2003?

When net neutrality was conceived in 2003, Amazon was a company with ~$5b in revenues, Google just started generating revenues, and Facebook didn’t exist. Now America’s largest network company by annualized revenues is Amazon at $193b, not AT&T, at $160b.

The annualized revenues of the three largest edge-networks, Amazon, Google, and Facebook will likely surpass the collective revenues of the three largest ISP networks, AT&T, Verizon, and Comcast, sometime this fall.

If current revenue growth rates continue, expect Amazon, Google, and Facebook’s collective revenues to be twice that of AT&T, Verizon, and Comcast in less than three years.

That is network reality.

New FTC Faces Same Unfair Competition Problem with Google Amazon & Facebook

Note: This analysis is a response to DOJ Antitrust Chief Makan Delrahim’s public call last month for “fresh thinking” on antitrust approaches to digital platforms. He said: “…we should encourage fresh thinking on how our legal tools apply to new digital platforms. We need more thinking—diverse thinking—about these questions. And, we need a civil discourse on this topic.” “I believe that, as enforcers, we should be open and receptive to empirical evidence that companies in digital markets may be engaging in predatory pricing or other exclusionary conduct to drive out competition and cause long-run harm to consumers.”

 

Summary: Fresh Thinking on the Unfair Competition Problem of Google, Amazon, and Facebook.

Will protecting the process of fair competition be a priority of the new Simons-FTC?

The Huge Hidden Public Costs (>$1.5T) of U.S. Internet Industrial Policy

This post introduces a new white paper here with a first-of-its-kind, cost-estimation model of the cumulative hidden public costs of U.S. Internet industrial policy* entitled: “Internet Platform Corporate Welfare and Leechonomics.” *U.S. Internet-first, industrial policy in the 1996 Telecom Act, effectively exempted only Internet companies from: all U.S. communications law, regulation, and public responsibilities; normal non-communications Federal/State regulation; and normal civil liability for what happens via their platforms and business models.

Nutshell Summary: Sweeping Government exemptions and immunities from risks and costs overwhelmingly favor zero-sum, parasitic policy arbitrage and corporate welfare, which perversely fosters unproductive “leechonomics.” U.S. Internet policy most incents platform business that maximizes arbitrage spreads, i.e. taking maximal societal risk that un-immunized competitors can’t take, where the benefits can be capitalized by platforms, and the costs socialized to the public (>$1.5T), because the government has only exempted and immunized platforms from normal accountability and responsibility for consumer welfare. 

4 Strategic Hearing Questions for Facebook CEO Zuckerberg

 

If Congress wants to better understand how Facebook is at the center of so many privacy, data security, and consumer protection problems, Senators and Representatives have a rare opportunity to ask Facebook CEO Mark Zuckerberg the four strategic questions below, when he testifies before Congress on Tuesday and Wednesday.

 

All four are designed to help Congress understand: “How could this happen? And keep happening?

 

US Internet Policy’s Anticompetitive Asymmetric Accountability - DOJ Filing

Note: this post summarizes a Precursor LLC presentation filing for the record of the U.S. DOJ Antitrust Division’s 3-14-18 Roundtable on Antitrust Exemptions & Immunities. See the presentation/filing here.

Presentation Title:

“A Market Divided: U.S. Internet Policy Creates Anticompetitive Asymmetric Accountability.”
Government exemptions and immunities overwhelmingly favor regulatory arbitrage over free market competition. Accountability arbitrage harms: consumer welfare; free market forces; the process of competition; and economic growth.

Executive Summary:

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Q&A One Pager Debunking Net Neutrality Myths