Antitrust

David Carr's (NYT) excellent analysis of how the mainstream media missed the truth behind cycling legend Lance Armstrong's systematic cheating and deception -- that ultimately led to the International Cycling Union stripping him of his seven Tour de France titles, to Nike dropping him as a sponsor, and to his resignation as Chairman of his cancer-survivor foundation LIveStrong -- got me thinking about the many sad parallels there are with how the mainstream media and blogosphere have missed the truth behind tech legend Google's systematic cheating and deception.

Just like the mainstream and sports media had much self-interest and fear in challenging Mr. Armstrong's representations, i.e. the loss of advertising and reporter access to top people in the sport, the mainstream media and tech blogosphere also have much self-interest and fear in challenging Google's representations, because Google is the overwhelming source of Internet traffic for the media (via Google Search, News, YouTube, and Android), and is also the primary monetization mechanism for the blogosphere.

Newspaper and magazine interests in Germany, France, and Brazil are fighting back against Google News' monetization of their headlines and property without compensation by urging lawmakers to pass laws requiring royalties or revenue sharing for ancillary copyright use of their core product news, per AP and NYT reports.

This piece supports three conclusions.

Please see my new powerpoint presentation here: "The Unique Google Privacy Problem; Why Google's Forced-Integrated Privacy Policy is So Problematic," which I presented to the Korea Council on the Protection of Personal Information in Seoul Korea this week.

Please don't miss slide 4: "Google's Monopoly Power = Unique Global Privacy Problem: Unfathomable Scale, Scope and Centralization of Private Info." It provides the latest eye-popping stats on Google's rapidly spreading dominance into video, mobile and social.

Also important not to miss are slides 9-10, which present my new conclusions about what Google's forced-integration of its privacy policy means for sovereign nations and the world at large, given the EU/CNIL's strong challenge last week to Google's privacy policy changes without user permission or opt-out option.

This analysis should be of great interest to the ~35 privacy authorities around the world which currently oppose Google's forced-integrated privacy policy (and other nations and privacy professionals as well), because it provides strong evidence, supporting rationale and conclusions to help nations address the #1 global privacy problem.

Google remains its own worst enemy in trying to resolve EU antitrust charges.

In early 2012, when Google was trying to convince EU antitrust authorities that enforcement action against Google's search practices -- preferring its own content in search ranking over competitors -- would only harm consumers and was unnecessary because competition was but "a click away" for consumers, Google announced it would consolidate 60 privacy policies without user permission or user choice to opt-out, and then did it a month later, over the EU's strong objections.

This was a flagrant strategic mistake because: first the EU prides itself for strong consumer privacy laws and privacy protections; second the EU fully-understands that consumers' privacy is the de facto currency that Google uses to propel its monopoly; and third Google's primary antitrust defense is that they are the ones that are best looking out for consumers interests and that consumers have plenty of choice.

Like most analysts, I am not persuaded by the stated rationale and synergies SoftBank has put forth to justify its acquisition of Sprint. At bottom the deal is financial engineering: balance sheet and exchange rate arbitrage; and market timing. It appears to be a financial partnership, not the stated strategic partnership.

SoftBank hopes its shareholders will imagine that the 2013 and beyond U.S. experience of a maturing wireless smart-phone market and Sprint's late-iPhone-entrant role will somehow be analogous to SoftBank's iPhone first-mover experience in 2008 Japan. That's like asserting rock-climbing uphill is analogous with sliding downhill because they both involve hills.

Politico published my 500-word rebuttal of Tom Lenard's op-ed "FTC should drop case against Google," as a Letter to the Editor, which you can see here, and also as an online op-ed called: Opinion: Google's political play.

In it, I succinctly expose how "Google often plays politics to evade law enforcement culpability."

FT just reported that Google has moved to settle antitrust charges with the EU "by offering to label information from its in-house services that are included in its search results pages..."

I am republishing below a satirical June 26th PrecursorBlog post which anticipated this exact offer of a Google labeling antirust remedy to settle antitrust charges.

• The satirical recommendation memo from Google's lawyers to Google's CEO puts Google's munificent "labeling" offer of cooperation in perspective.

Google's Labeling Antitrust Remedy: "One Trick Away" -- A Satire

As an unabashed Milton Friedman conservative, I strongly agree with Judge Robert H. Bork and Professor J. Gregory Sidak that antitrust law's purpose is to protect competition and the competitive process and not to protect competitors. I also hold my fellow conservatives in highest regard. However, as a highly-experienced and esteemed judge and professor, they know they must prove their case on the merits. In Google's case, they have not.

While it would be difficult to challenge the sophistication of their legal analysis, it is not hard to discredit the sophistication of their economic analysis of the relevant market, economics, and behavior in question. Their defense indicates that they have fully-adopted Google's core economic premises and public-representations, so their skilled legal arguments can do no better than the fatally-flawed material with which Google has given them to work.

Specifically, their legal analyses rest upon a misunderstanding of the relevant market in question. Since antitrust prosecution is fact-driven, not theory dependent, no amount of legal or economic theoretical elegance can overcome a fatally-flawed factual predicate.

Google is mocking EU and FTC antitrust enforcement authorities in seeking to partner (collude) again with Yahoo, its #2 competitor, at the same time Google is deep in antitrust negotiations with the EU antitrust authorities who have already concluded Google is a predatory search monopolist, and while the FTC staff is poised to potentially recommend a sweeping Section 5 antitrust case against Google for deceptive and unfair business practices.

Yesterday Google Chairman Eric Schmidt publicly reiterated that Google would love to be a search partner with Yahoo.

Either Google is somehow confident of back-room political fixes to all their antitrust enforcement troubles, or Google is mocking antitrust authorities with a cavalier "stop us if you can" attitude.

Google continues to act as if it is accountable to no one. Let's review some pertinent history and facts to put in perspective how reckless Google's behavior is in this context.

Summary

Antitrust law enforcement investigating Google have five top lessons to learn.