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April 2011

Key Questions for Google's New CEO Larry Page

When the world's most powerful company gets a new CEO for the first time in a decade, everyone naturally has a lot of questions.

 

  • When new Google CEO Larry Page decides to become accessible to people outside the insular Googleplex, here are some key questions to ask Mr. Page about: priorities, management philosophy, privacy, antitrust, intellectual property, and social responsibility.

 

 

Priorities:

Implications of Court Ruling Net Neutrality Appeal Premature

On a technicality, the DC Court of Appeals ruled that Verizon's January appeal of the FCC's December Open Internet order was filed prematurely, meaning Verizon must wait for the FCC to officially post it in the Federal Register, before it can re-appeal.

  • This decision has tactical implications about where and when this appeal will be heard, but it has little to no effect on the merits of Verizon's appeal or the merits of the FCC's order.

While technically unsuccessful in accelerating their appeal, Verizon was very successful in establishing early how legally vulnerable the FCC decision will be on the merits, in whatever appeals court ultimately hear the case, (which still could be the DC Circuit where the FCC lost in Comcast vs. FCC, albeit with a different panel.)

Moreover, this technicality does nothing to change how politically controversial the FCC's Open Internet Order is.

Google's Deceptive "one click away" Antitrust Defense -- Part VIII Google Antitrust Pinocchio Series

As reports swirl that the FTC and DOJ may be considering a formal antitrust investigation of Google, like the EU already launched in November 2010, Google continues its deceptive, one-dimensional, superficial, antitrust defense mantra that "competition is one click away," and that Google is only focused on users and innovation.

 

  • It is telling that just last week the FTC charged Google with deceptive privacy practices, and Google tacitly admitted its public deceptiveness and misrepresentation in submitting to the FCC's consent order; so I am not alone here in charging that Google is deceptive and misrepresents itself to the public.

 

So how is Google's antitrust defense deceptive?

First, Google's stale four-year antitrust mantra that competition is but a click away and Google puts users first, is deceptive because Google knows full well that competition and antitrust involves much more than just users -- as they claim -- but an entire competitive ecosystem.

 

3 Big Signs Google's Becoming a Conventional Company Under Page

Ironically after Google's Larry Page pledged in the first line of his 2004 IPO letter -- that "Google is not a conventional company. We do not intend to become one." -- Google under his new CEO leadership is in fact rapidly becoming much more of a "conventional" company.

Three Big Early Signs from Mr. Page's CEO-ship:

Implications of DOJ-Google/ITA Antitrust Settlement

There are many major going-forward implications resulting from the DOJ's latest antitrust enforcement action against Google -- this time to mitigate the anti-competitive effects of the proposed Google-ITA transaction.

 

 

 

Summary of Implications:

  1. Google is clearly the DOJ's main antitrust concern.
  2. DOJ is 4-0 against Google while FTC is 0-2.
  3. DOJ concludes Google is a monopoly -- again.
  4. Remarkably, Google is actively choosing a regulated future for itself.
  5. Google is choosing the trajectory of a regulated antitrust remedy long term over the trajectory of a break-up remedy.
  6. The narrow market definition is good news for those privately suing Google for antitrust violations.
  7. The Google-ITA "firewall" will prove very difficult for the DOJ to police effectively.
  8. The complaint mechanism is important.

 

DOJ: Google Misrepresents Govt. Security Certification -- Google's Federal Rap Sheet Grows

Google's ignominious Federal rap sheet only grows longer.

 

  • Friday the DOJ effectively charged Google with misrepresentation to the public.
    • Google represented that its cloud service for Government was certified under the Federal Information Security Management Act (FISMA) since last July, when in fact it was not FISMA-certified for the product that Google claimed it was.
  • This latest Google misrepresentation revelation came in a DOJ filing to the Federal Court which is hearing Google's case against the Department of Interior of the U.S. Government:
    • "On December 16, 2010, counsel for the Government learned that, notwithstanding Google's representations to the public at large, its counsel, the GAO and this court... Google does not have FISMA certification for Google Apps for Government."

 

I.   What does this mean?

The Net Neutrality Accountability Gauntlet

The House's rejection of the FCC's December Open Internet order 240-179 is just the latest in an ongoing high-profile accountability gauntlet for the FCC's unauthorized, unwarranted and unjustified net neutrality rules.

 

  • While the wheels of democracy, public accountability, and the rule of law can turn slowly, they do turn steadily.
  • And from what we have seen so far, the FCC's out-of-the-mainstream, over-reach effort to regulate the Internet for the first time, has been pummeled in our Government's accountability process gauntlet to date, and it can be expected to continue to be pummeled going forward.

 

The Net Neutrality Accountability Gauntlet:

     

     

    First, the President's January Executive Order, "Improving Regulation and Regulatory Review" to seek the "least burdensome" regulations, was a big post-mid-term election political pivot by the Administration to be more sensitive to business, economic growth and job creation concerns.

     

    • Through the new lens of the President's Executive Order, the FCC's pre-mid-term-election-mindset net neutrality rule making has been viewed as badly out-of-focus with the renewed bipartisan interest in economic growth and job creation.

     

    Google's "Copyright School" Tacitly Admits Liability in Viacom vs YouTube Case

    Ironically Google's new "Copyright School" to better educate YouTube users of copyright law and responsibilities, slides Google down the slippery slope of tacitly admitting liability for copyright infringement in Viacom's billion dollar infringement suit against Google-YouTube.   (See Politico's story.)

    There are two big takeaways from Google's new "Copyright School."

    First, Google continues to basically blame users for copyright infringement while absolving itself of mass facilitation of copyright infringement.

    The big open question here is does Google have a "copyright school" for its YouTube engineers/employees and have any of them attended it?

    • It is telling that whenever the company that claims to work for users, gets in trouble, its users' fault not Google's.
    • (Doesn't this sound eerily like Google implying Google's China's security breach was the fault of users not being careful enough?)

    Second, why didn't Google do this shortly after it bought YouTube over three years ago?

    Expect Google's Privacy Problems to Threaten Bubble 2.0

    Expect Google's bull-in-a-china-shop entry into social, to try and neutralize FaceBook, to bring lots more major unwanted privacy attention to the privacy-challenged social media business model, and to contribute to the eventual bursting of the Internet investment Bubble 2.0.

     

    • The hot air that is inflating the social media Bubble 2.0 is that people somehow want to forfeit their privacy to socialize more efficiently, and that social media business models can indefinitely monetize privacy arbitrage against users' interests without consequence.
      • (See Part I of this series here.)
    • Ironically, the investment fate of social media, and Bubble 2.0, will depend less on what social media companies do, and more of what the leviathan Google does in social media.
      • The venture capital community has long been painfully aware of the Google-leviathan's  outsized effect on every other VC investment, because they always ask start-ups "What if Google Does It?"

     

    I.   Privacy Baseline is on the Move: Bipartisan Interest in Privacy Protection Strengthening

    Anyone following social media or Google would be remiss to not notice the flurry of recent bipartisan, bicameral, and bi-branch interest in increasing privacy protection of online users in just the last few weeks.

     

    Read Randy May's Great NRO Piece "Rolling Back Regulation at the FCC"

    Kudos to Randy May of the Free State Foundation for his outstanding must-read piece in the National Review Online: "Rolling Back Regulation at the FCC --How Congress Can Help Competition Flourish."

    It is a very important reminder that Congress nearly unanimously set U.S. communications policy in 1996 "to promote competition and reduce regulation," in stark contrast to the FCC's Open Internet de-competition policy.

    • Randy is also spot on in encouraging Congress to re-fortify its extremely successful 1996 pro-competition policy by changing the burden-of-proof to assuming competition is superior to regulation, in order to counter the FCC's deep-seated bureaucratic instinct to regulate in order to perpetuate itself.

    Randy is also dead right that the FCC looks backward to preserve its regulatory raison d'etre, rather than looking forward, obeying the law and trusting competition to drive consumer benefits.

    We so need an FCC that genuinely encourages competition and lets consumers and the market choose market winners and losers, not the FCC.

     

     

     

     

     

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    Q&A One Pager Debunking Net Neutrality Myths