In a rare public antitrust defense, Google posted a rebuttal of Washington Post columnist Steven Pearlstein's challenge of Google's strategy of buying its way to broader market dominance (via its pending acquisition of ITA Software that is being reviewed by the DOJ.)

Google's standard misdirection warrants fact-checking.

First, Google claims: "All companies make 'build vs. buy' decisions. The clear subtext here is that Google is no different than any other company making acquisitions, so if others have had their mergers approved so should Google -- fair is fair.

This is misleading because Google is omitting highly material facts of how Google is very different than other companies, and why ITA arguably is a very special case.

• Google is the world's leading antitrust scofflaw; no other company has been officially opposed by antitrust authorities FIVE times in just the last TWO years.
  • 2008: DOJ blocked the Google-Yahoo Ad Agreement by threatening a Sherman Section 2 anti-monopolization case against Google.
  • 2009: Google's CEO was forced off competitor Apple's board of directors by the FTC.
  • 2009 and 2010: DOJ twice opposed the Google Book Settlement, (here & here) as being illegal under three bodies of law: antitrust, copyright, and class action.
  • 2010: DOJ sanctioned Google for anti-competitively colluding with tech companies to limit the fair market compensation of their own employees.
• Google is the only company acquiring major companies like ITA, when under a broad antitrust investigation by the EU for potential antitrust violations highly material to the ITA transaction.
  • Moreover Google is on an acquisition tear, having acquired ~40 companies this year alone.
• In addition, Google is unique in having been sued by multiple companies for antitrust violations highly material to the Google-ITA acquisition: TradeComet, MyTriggers, Foundem, Ciao, Ejustice.FR, Navx, etc.
• Google has a history of acquisitions like ITA, which have proven in the real world to have "substantially lessened competition:" YouTube, DoubleClick and AdMob.
• Google is a market making platform for monetizing much of the online economy's content. The antitrust charges against Google are that it routinely self deals in hard-coding its own content the top ranked result, and burying competitors results where they won't be found, which is highly material to the concerns raised about Google-ITA.

Second, Google claims: "We are competing against other companies for acquisitions."

This is more clever misdirection.

This antitrust review is not about whether or not their was fair competition in the auction for ITA, it is about whether Google-ITA would "substantially lessen competition" in markets Google and ITA are in.

• The question is whether it is anticompetitive for the world's dominant search engine to buy the world's dominant, Google of specialty travel search engines, ITA.

Third, Google claims: "Acquisitions are typically good for consumers and the economy." The pretext of this argument is that if one opposes this particular ITA acquisition, one must be anti-economic growth.

• The highly relevant facts that Google is omitting here yet again, is that the people who oppose this particular acquisition involving these particular facts have not opposed the other 39 acquisitions Google has made this year or the literally thousands of acquisitions that have been made by others this year.
• Moreover, the cold facts that Google is misdirecting people from here is that the DOJ and FTC review very few of the thousands of acquisitions made each year and usually challenge only a handful each year at most.
• Its fallacious logic for Google to imply that if one opposes one acquisition on one particular set of facts one must be generally anti-acquisition and anti-growth.

Fourth, Google claims: "Courts and regulators recognize efficiencies in mergers into new spaces."

• Once again, Google chooses to claim that its factual circumstances are analogous to other mergers, like Oracle-Siebel and Adobe-Macromedia.
• Importantly, those transactions did not carry the Google-ITA baggage catalogued in part one of this post.

In sum, the crux of the problem with Google's antitrust defense is that they are still arguing they are not dominant despite overwhelming evidence to the contrary. This blind eye to the facts, allows Google to continue the masquerade that Google has no obligation to operate in a different way in the marketplace, than do competitors that are not dominant.

• Another big problem is that Google is imagining that no one will look at Google in the context of their overall pattern of anti-competitive behavior over several years in several markets, and that no one will fact check their many false assertions.

The facts in the Google-ITA case are powerful that the transaction will "substantially lessen competition;" the DOJ should block Google-ITA.

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Google Antitrust Pinocchio Series:

Part V: "Google does not reap the benefits of significant network effects"

Part IV: Stress-Testing Google's Top Ten Antitrust Defenses

Part III: "Google-AdMob: 'Its too new to dominate'"

Part II: Google: Antitrust's Pinocchio?

Part I: What is "One click away?