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The Broader Implications of DOJ's Book Settlement Investigation
Submitted by Scott Cleland on Wed, 2009-04-29 15:00
To start however, it is important to get an update of important facts since antitrust is so fact-driven. Recent facts only confirm and bolster the DOJ's public assessment 11-05-08 that Google had monopoly market power in search advertising and search advertising syndication.
It is in the context of this increasing market dominance of search advertising that the DOJ is investigating the competitive effect of the Book Settlement. The main question is whether or not the Google Book Settlement could effectively extend Google's search advertising monopoly further -- by de facto granting Google 100% share of search advertising of the 5 million digitized orphan works in the settlement.
Broader Implications of the DOJ Investigation:
I. Overall Antitrust Enforcement:
First, this investigation could have broader implications for antitrust enforcement in the new Administration.
Nothing like this happens in a vacuum. The new DOJ antitrust leadership have made it clear that, it strongly disagreed with the Bush antitrust effort to revise Section 2 monopolization guidelines to make it very difficult for the DOJ to bring a monopolization case against a company in the future. Three FTC commissioners, including the new FTC Chairman, strongly opposed the Bush-DOJ's attempt to substantially weaken monopoly enforcement. Many expect the new Adminstration to revise that Section 2 report to reflect the new DOJ/FTC consensus for more rigorous antitrust enforcement.
If the new DOJ is intent on reinvigorating antitrust enforcement, Google would appear to be the company potentially facing the most antitrust liability/risk.
II. Behavioral Advertising:
Second, since the FTC has pending behavioral advertising principles and FTC Chairman Leibowitz is threatening new regulations if the industry does not shape up and better protect privacy... the DOJ Book investigation also has implications for behavioral advertising. In what way?
Per the NYT, the FTC reportedly struggled with the DOJ for jurisdiction over the book settlement. The reason could be that the FTC is concerned that the FTC's approval of Google-DoubleClick merger was a mistake and strongly contributed to the DOJ finding Google to be a monopoly only 11 months after the FTC approved the Google-DoubleClick deal.
Third, the issue of privacy is strongly implicated in the DOJ review of the Google Book Settlement. Privacy concerns are inextricably intertwined with behavioral advertising because the whole open question surrounding bahavioral advertising is whether advertisers must give consumers the freedom to control the private information behavioral advertisers like Google use in their behavioral advertising.
Moreover, in last week's public discussion of the Google Book Settlement sponsored by the ITIF at the Library of Congress, the American Library Association stated one of its most serious objections to the settlement was that there were none of the privacy protections for readers of the books in the settlement that library researchers routinely enjoy.
In short, the DOJ investigation of the Google Book Settlement suggests a broader antitrust spotlight may be returning to Google -- with potentially far-reaching implications for antitrust enforcement overall, behavioral advertising, and privacy.