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What is "one click away?"

"One click away from competition" is Google's ever-present, antitrust defense slogan that Google does not have any market power to anti-competitively exercise. 

In today's New York Times, Google's CEO Eric Schmidt ratcheted up the centrality of that slogan to Google's antitrust defense by claiming it applied to Google's user "customers." CEO Schmidt said:

  • We are one click away from losing you as a customer, so it is very difficult for us to lock you in as a customer in a way that traditional companies have.”

The problem with Google's "one click away" slogan is that it is untrue and deceptive; it simply does not withstand close scrutiny of the facts or logic.

I. It is untrue -- a false claim.

A. The claim fails the dictionary test.

The dictionary definition of a "customer" is "one that buys goods or services."

  • The signature Google fact is Google's goods and services are free to users.
    • Consumers use Google's products and services, but they do not buy them, so they are not "customers" in a competitive market as Mr. Schmidt tries to represent. 
  • Google's true customers are advertisers and web publishers that buy Google's goods and services and comprise virtually all of Google's $22b in annual revenues.

B. The claim fails the real-world evidence test.

If Google's users were indeed "customers," why does Google have no customer service for users, but has thousands of customer service/sales/support personnel dedicated to service their real advertising/publishing "customers?"

If Google's users were indeed its "customer" base, why does Google not advertise to them like other consumer-customer companies do (offline and online) to their real and prospective "customers?"

If Google's users were really "customers" in a fairly represented market transaction trading their private information for Google's targeted ad services, why are the roughly 70+% of American online consumers largely unaware that they have forfeited control of their private information to Google and other online services? 

C. The claim failed the Government law enforcement test.

If Google's users were indeed Google's "customers" but "one click away from competition," why did all the relevant law enforcement entities in-depth, months-long investigations all conclude that Google's relevant market and customers were: buyers of search advertising, not Google's users, and that Google was in fact dominant in search advertising?

  •  If Google's users were indeed "customers," wouldn't that "fact" have been uncovered by any one of the three independent law enforcement entities that did an in-depth investigation of Google and its relevant competitive markets?
  • Moreover, the DOJ investigation of Google-Yahoo determined that Google does have market power in search advertising and search advertising syndication.
    • In effect, Google's "one click away" slogan is a constant reminder to antitrust authorities that Google does not agree with, or accept their  definition of the relevant market or Google's dominance of it.       

 

II. It is deceptive; not a fair representation claim.

 As CEO Schmidt said:

  • We are one click away from losing you as a customer, so it is very difficult for us to lock you in as a customer in a way that traditional companies have.” [Bold emphasis added]

Google cleverly and deceptively implies that if they don't "lock you in" like "traditional companies have" they can't lock a customer in to their service.

  • However, remember that Google heralds itself as a non-traditional company with non-traditional ways of doing things by almost any measure -- so it's effective "lock-in" techniques would logically be non-traditional too.

Google also appreciates that "traditional" walls are not necessary to lock in users when long distance to an exit can serve just as effectively as walls.

  • Imagine being in the middle of a jungle or desert, and most every direction one goes for a long distance one finds no "walls" only more jungle or desert. 
  • Google well understands that if a user clicks away from Google's main branded service -- there is roughly a 70-90% chance that the user will click to a site of a Google partner site where Google either supplies outsourced search or tracks a user's clicks. 
  • For example, if one clicks to:
    • 8 of the top 12 search engines (after Google), a user will still be using Google search;
    • 6 of the top 10 ecommerce sites, one will still be using Google search; and
    • 5 of the top 10 web portals, one would still be using Google search.
  • The liklihood that one clicks away to another site and remains in Google's vast extended Internet advertising tracking domain is even higher than the top sites above according to a March 2009 research study by UC Berkley grad students that found Google monitors users on:
    • 92 of the top 100 Internet sites;
    • 88% of 393,829 distinct Internet domains studied in March 2009; and
    • ~80% of 766,000 distinct Internet domains in April of 2009.
  • What this means is that Google doesn't care if a user clicks away somewhere else because there is a 70-90% likelihood that that user will remain in Google's extended Internet advertising domain, and that they can still track you and advertise to you -- even if you no longer use the main Google search bar.
    • Google also knows that its effective reach and advertising influence over the Internet is several times greater than its nearest competitor and that it has 26 network effects/competitive barriers that ensure its competitors' can't replicate Google's search advertising dominance.      

Google also appreciates that those users who have downloaded Google's toolbar (via Adobe, Firefox, Chrome, etc.) -- have effectively locked in that customer because if they click away to a competitor, the next time they search they will return to Google search as their default search engine.

  • Undoing the default of the Google toolbar is neither obvious nor easy to accomplish for the average user -- so after they click away they will mostly boomerang back until the search default is disabled.  

In closing, Google's "one click away" antitrust defense is one of the slickest and most effectively misleading competition slogans ever.

  • On the surface, it sounds plausible, benign and on point.
  • However, anyone with an open mind, critical thinking skills, and a willingness to consider the facts and deceptive representation, will find the "one click away" slogan both untrue and deceptive.

Lastly, this untrue and deceptive "one click away" slogan is no way to inspire trust among Federal, State and International antitrust officials, nor among advertisers, publishers, or Federal Judges that may eventually hear a Google antitrust case. 

  • At core, antitrust law enforcement is ultimately fact-driven, not PR-driven.        

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