Antitrust

An unusual and notable pattern appears to be developing with Google and DOJ antitrust enforcers. 

"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.

In some of the worst sophistry I have seen in a long time, several pro-regulation groups, who obviously oppose competition policy for communications, petitioned the FCC with a classic straw man argument that essentially asserts that because wireless competition is imperfect, its "demonstrably uncompetitive" "and "produces active and ongoing consumer harms."   

Google's public policy blog said a new Wired article by Steven Levy is "a must-read for policymakers who want to understand online advertising." 

First, I agree; there is a lot to learn from the article.

Google has begun to admit and make concessions that the Book Settlement it originally negotiated with authors and publishers is anti-competitive.

To try and win the support of the biggest libraries, Google has now cut a potentially exclusive side deal giving the largest libraries the benefit of a price oversight/arbitration mechanism per the New York Times.

Reports that Google's CEO Eric Schmidt sees no reason to step down from Apple's Board in the face of a public FTC antitrust investigation over it, is emblematic of Google's long pattern of disrespect for the rule of law in competition, privacy, and copyright/trademark matters.

Google's consistent pattern of behavior is to push the envelope of legality farther than any other entity is willing to, and then arbitrage that unique edge, for (anti-)competitive advantage as long as possible.

The DOJ investigation of the Google Book Settlement suggests that a broader antitrust spotlight may be returning to Google.

Cracks are appearing in the foundation of the Google Book Settlement, which suggests some of it may end up crumbling under the current harsh weather of public scrutiny.

The most recent crack to appear was the Court's quick rejection of Google's preemptory proposal to extend the opt-out notice period for authors for another sixty days, and quick approval of the request by a small coalition of rights holders for four more months until September 4th.  

• This suggests that the court was not impressed with Google's effort to date to notify potentially affected authors, a key component of good faith in the proposed settlement.

An ITIF forum on the Google Book Settlement at the Library of Congress last week exposed some other big cracks in the foundation of the settlement.

Yahoo's announced earnings confirm that Google continues to take substantial search advertising revenue and profit share in the first full quarter of financial results since the DOJ blocked the Google-Yahoo Ad Partnership as anti-competitive.

The crux of the Google Book settlement will be whether the Court effectively sanctions the creation of one de facto world digital book library, or whether it will facilitate the continued proliferation of many libraries of digital books throughout the world. 

• Put differently, will the legal settlement of the greatest alleged book theft in world history -- de facto concentrate control over access to digital books into the hands of only one entity -- Google (the alleged copyright violator)...
• Or will the settlement preserve the current longstanding competitive/cooperative system of  public, private, and academic libraries where control over access to books is dispersed among many independent and diverse organizations around the country and the world?  

The Internet Archive, a "non-profit library," recently petitioned the Court to try and ensure the diverse latter outcome and not the concentrated former outcome.