Google

Please don’t miss my latest The Hill Op-ed: “Internet giants, not broadband providers, are the top threat to consumers”.

Please don’t miss my latest The Hill op-ed:   “Google’s ad blocking exposes the company’s hypocrisy on net neutrality” (& copyright).  

There are potentially big implications for Google, complainants, and antitrust authorities around the world, from Google’s antitrust settlement with Russia’s Federal Antimonopoly Service (FAS)

FAS previously ruled officially, and was upheld by the Russian Supreme Court, that Google-Android illegally abused its dominance in forcing handset manufacturers to strongly preference Google search and other apps, as a contractual requirement to license Google’s official Android operating system.

In this settlement, Google agrees to a variety of significant Android/Chrome behavior changes that, if they work in practice as represented, will enable other search engines, like Yandex, and app developers to have significantly more competitive opportunities in Russia. The arbitration agreement is for six years and nine months and comes with a fine of ~$7.8m -- the equivalent of 46 minutes of Google’s annual revenues.

What Google gets in return, is big brand protection in that it can claim: a) the settlement was voluntary; b) there is now no more Russian official finding/legal precedent that Google is dominant or a monopoly, or has done anything wrong (even though it officially did before this superseding settlement); and c) a Google-Android antitrust settlement template that Google can shop to other countries, (that is friendly to Google in that Google knows this settlement won’t be as effective elsewhere, because other countries sans China and South Korea, do not have a material competitive mobile search offering to Google like Russia’s Yandex.)

FOR IMMEDIATE RELEASE, March 23, 2017, Contact:  Scott Cleland 703-217-2407

Public Knowledge/Big Internet Oppose FCC Business Data Services Deregulation Because They Want More Unnecessary Title II Utility, Price Regulated Resale Subsidies Instead of Facilities-Based Competition & New Fiber and Fixed Wireless/5G Broadband Investment

WASHINGTON D.C. – The following may be attributed to Scott Cleland, Chairman of NetCompetition:

“This Thursday, the FCC will vote on its Business Data Services Order and is expected to finally deregulate broadband prices for the business market, a decade after the FCC fully deregulated broadband prices for the consumer market. Thus, this FCC BDS order is all about the future of facilities-based broadband competition and transitioning away from Title II, price-regulation-dependent, resale competition.”  

“Kudos to Chairman Pai and Commissioner O’Rielly’s vision for promoting more facilities-based broadband competition to replace slow, pre-1996, legacy copper facilities with modern fiber optic or gigabit fixed wireless facilities, to promote infrastructure investment, economic growth and job creation.”

“Twenty years after the 1996 Telecom Act promoted competition over regulation, and now that the cost of deploying gigabit speed, fixed wireless, broadband facilities over the last 500 to 2000 feet has fallen precipitously in the last few years, it is high time that for-profit corporations providing broadband data services to the business market, get off the FCC price regulation dole and individually, or as a private consortia, build their own competitive broadband facilities.”

The evidence is compelling that the DOJ will replace the FTC as the lead Sherman Act antitrust enforcer on the biggest Google antitrust matters during the Trump Administration.

A huge action forcing event for the Trump DOJ Antitrust Division is coming, most likely this June/July, when EU antitrust authorities most likely will conclude the first of three antitrust cases against Alphabet-Google, and officially rule Google is a 90+% search monopoly that has anticompetitively abused its monopoly position in search, and impose a traditional monopoly nondiscrimination principle remedy that Google treat its shopping comparison competitors as it treats itself.

While conventional wisdom assumes the FTC will continue as the Google antitrust lead, that is very unlikely to continue, because of two Google antitrust gamechangers, the replacement of President Obama with President Trump, and the EU’s coming official antitrust conclusion that Google is in fact a monopoly that acts anticompetitively in over 30% of the world.

Since so much flows from the baseline assumption of which U.S. entity will be the Google antitrust lead, the DOJ or FTC, it warrants closest examination.

Summary of six reasons DOJ will take the Google antitrust lead from FTC

(1) Institutionally, DOJ is the United States’ antitrust lawyer and the official liaison with other countries.

At best the notions of net neutrality and consumer privacy are somewhat in tension.

At worst, they are in opposition, and harm consumer privacy as happened when the Wheeler-FCC subordinated the goal of what’s best for consumer privacy to the conflicting and overriding goal of what was best for imposing maximal, Title II net neutrality.

Net neutrality and consumer privacy are in tension because they are very different concepts, priorities, and approaches for the handling of information online.

However, the original tension between the FCC’s first concept of net neutrality and consumer privacy was very limited because the Martin-FCC’s 2005 Internet Policy Statement on net neutrality was an extension of the Powell-FCC’s “Internet Freedoms” concept of net neutrality, and both approaches were consumer-first, i.e. very clearly centered around what consumers could expect from the Internet.

What thrust them into the more opposing concepts that they are today?

It was when net neutrality flipped from being primarily a consumer-centric principle to an edge-provider centric principle defined by Google, Amazon, Facebook and Netflix; and from the enforcement of a general broadband nondiscrimination principle, to the preemptive imposition of “the strongest possible,” specific, utility rate regulation framework – i.e. Title II of the 1934 Communications Act -- on a competitive industry that had done nothing wrong to warrant it.

Conclusions:

Most of what we have learned in the five months since the election indicates that the Trump Administration is not going to be Google’s antitrust advocate and protector like the Obama Administration effectively was from 2013-2016, in de facto shutting down any real U.S. antitrust scrutiny of Google, and in turn implicitly discouraging antitrust enforcement of Google in the EU and around the world.  

This antitrust enforcement sea change has three big picture implications: for the EU, for the U.S., and for markets.

Please see PBS NewsHour’s five minute segment here with Gigi Sohn and I discussing Congress’ rescission of the FCC’s unimplemented broadband privacy order that the Wheeler-FCC majority passed last October by a 3-2 vote.

Please see my latest The Hill op-ed: “Congress was right to save consumers from privacy rules imposed under net neutrality.”

Consumer privacy has been the biggest loser from net neutrality proponents’ politicization of privacy.

President Trump’s impressive nominee to head the DOJ Antitrust Division, Makan Delrahim, enters the global antitrust stage when one company, America’s Alphabet-Google, has been under near constant antitrust investigation around the world for a decade and faces multiple pending antitrust enforcement actions.

What is the global and U.S. antitrust community to glean from this nomination?

Mr. Delrahim’s background speaks volumes, especially if one believes the adage, people are policy.

Overall, Makan Delrahim is a widely-respected, veteran antitrust official, attorney, expert, and professor, with high-level antitrust experience that check all the right boxes, organizationally, functionally, and professionally.

Mr. Delrahim’s antitrust-specific experience is outstanding.