Fraud

Google again seems to be presumptuously trying to make official announcements for sovereign governments.

• In announcing for the Japanese antitrust authority, that the Government of Japan has approved Google's proposed monopolization of search advertising in Japan (by allowing Yahoo-Japan to outsource its search advertising engine and platform to Google), Google appears to be once again imperiously trying to dictate outcomes to sovereign governments in advance and in public.
• Just like Google tried and failed to dictate outcomes to China over the first six months of this year, it appears that Google has learned nothing about "face" and due respect from its China fiasco and is once again treating a sovereign nation, Japan, as someone that works for Google.   

Doesn't Google's announcement strike anyone else as over-the-top presumptuous?

The fateful policy decision by the FTC/DOJ to exclude privacy as a factor in antitrust enforcement has fostered a perverse market dynamic where many online advertising companies now effectively compete on the basis of who can most take advantage of consumer privacy fastest, rather than compete on the basis of who can best protect consumer privacy. 

• Consumers' online privacy Waterloo was the FTC's failure in its 2007 review of Google-DoubleClick to fundamentally understand the online advertising business model, i.e. that consumers are not the "customer" of online advertising, but the "product" that Google and DoubleClick effectively sell to advertisers and publishers.
• In getting it wrong that consumers are the real "customer" in Google's online advertising brokering-triangle of advertisers, publishers and users, when users don't pay Google at all, the FTC fundamentally misunderstood consumers' real interests.
• The FTC unwittingly aimed the worst part of this business model's privacy arbitrage at consumers' vulnerabilities rather than aiming it at protecting consumers' privacy. 

This analysis will show: 

• The implications of exempting privacy from antitrust enforcement;
• Why privacy is an antitrust issue;
• How consumers are harmed by exempting privacy from antitrust enforcement; and
• In conclusion, how Google has become the "poster child" of this problem.  

I.   Implications of exempting privacy from antitrust enforcement.   

37 States are now involved in a "powerful multi-state investigation" of "Google's Streetview snooping" per a press release from investigation leader, Connecticut Attorney General Richard Blumenthal, who released a new follow-up letter to Google asking for more information and clarification of its representations to date. 

The letter shows the investigation is very serious. Its prosecutorial exactness strongly suggests that investigators believe Google has not been forthright in its answers to date and that it could be covering up material information to the investigation. 

• Several questions in the letter also indicate that the investigators are seriously concerned about the integrity and completeness of Google's systems of internal controls and supervision to ensure the safety and privacy of consumers. 

What appears to be the most problematic line of inquiry is whether or not Google tested this software before it was used in public to collect private information on consumers. 

The Google Fiber for Communities pledge to offer one or more U.S. communities ultra-fast Internet access at one gigabit speeds, is Google's latest stealth manipulation of the public.

• In essence, Google's fiber effort is a cynical national lottery that will result in just one or a few big winners and leave everyone else losers, with nothing to show for all their court jester efforts to entertain and get the attention of Google, the self-described "biggest kingmaker on this earth."
• Apparently operating under Circus promoter P.T. Barnum's cynical "a sucker is born every minute" world view, Google is preying on the severe economic hardship and unemployment of over 1100 communities, by teasing Google fiber riches for one (or a few).
  • (This isn't the first time Google has preyed on distressed communities to extract the maximum gain for Google, see the sordid tale of how Google took advantage of the job-loss-ravaged town of Lenoir North Carolina -- here.)
• Google is cynically urging cities to "dream big" when they know they will crush most all of their Google-generated dreams in the end.

How do we know this Google fiber lottery is stealth manipulation?

In ominous cross-pond agreement for Google, the Financial Times and the New York Times agree that Google needs more antitrust accountability:

• See the FT editorial; "Google should be watched carefully"
• The the NYT editorial: "The Google Algorithm."

Google itself has put the issue of "search neutrality" on the map with its FT op-ed and Google blog post and by saying they are for now for search bias after being against it.

Google's proposed acquisition of ITA software to beef up the Google Travel vertical, has put on everyone's radar screen the anti-competitive potential of Google continuing to extend, tie,and leverage its global search monopoly into content verticals like travel.

The FT got the concern over vertical abuse right: "...the potential for antitrust abuse through the tying of vertical services to search raises clear concerns."  

However, the NYT missed the mark on vertical abuse: "Forbidding Google to favor its own services -- such as when it offers a Google Map to queries about addresses -- might reduce the value of its searches."  

Google strongly legitimized the problem of "search neutrality" in arguing in detail in an FT op-ed today why Google's search should not be neutral. 

Skype, one of the high priests of the net neutrality movement, that preaches for Title II monopoly regulation of all the broadband providers it already rides upon for free, has been caught in the act of being blatantly unfaithful to its widely-professed net neutrality principles, by blocking interconnectivity to Fring! 

• Arstechnica and The Hill have both flagged Skype's hypocrisy and infidelity to its supposed net neutrality and openness principles in blocking mobile video calling competitor Fring from access to Skype's dominant network of a ~half-billion interconnected users.  

  Now we know that Skype's proclaimed principled stance for net neutrality and openness was really just a cynical PR and lobbying campaign of crony capitalism, and political cover for an industrial policy where the FCC picks Skype, Google Android, and Amazon Kindle as the "dumb pipe" market winners, and all broadband providers as the "dumb pipe" market losers.

  Skype's "do as I say not as I do" stance is particularly hypocritical because of Skype's dominant size relative to Fring, in that Skype has about a half billion users and is "responsible for 12% of global international calling minutes" per Skype.  

Anyone that cares about freedom generally, and freedom of the press in particular, must read PFF Adam Theirer's outstanding Big Government expose/op-ed putting the spotlight on neo-marxist "FreePress:" "How America's Hugo Chavez Fan Club Plans to 'Reform' the Media Marketplace."

• Adam's analysis and case are brilliant and dead-on; FreePress has one of the most destructive public policy agendas out there, period, full stop.
• It is frightening how much credence this Administration, FCC, FTC and Congress give to FreePress' anti-freedom-of-the-press dsytopian policy agenda.

Thanks Adam. Forewarned is forearmed.   

Today Google publicly admitted for the first time that its purported "neutral" and "unbiased" search algorithm is not completely-automated or computer-algorithmic like Google has long and consistently represented to the public. 

• In a stunning first-time disclosure in a Richard Waters FT article by "the Google engineer responsible for its ranking algorithm," Mr. Amit Singhal:   
  • "Google’s Mr Singhal calls this the problem of “brand recognition”: where companies whose standing is based on their success in one area use this to “venture out into another class of information which they may not be as rich at”. Google uses human raters to assess the quality of individual sites in order to counter this effect, he adds." [Bold added for emphasis.]

Wow. After a decade of passionate public representations that Google's vaunted search algorithm is "neutral' and unbiased, we now learn it has substantial regular human intervention to discriminate what site gets what ranking, who gets found and who does not, and who wins and who loses in the business of online content.

• From Google's website:

Serial beehive kicker Google, just kicked the wrong beehive -- IAC.

• Kudos to FT's Richard Waters for his outstanding front-page story based on an interview with Barry Diller, Chairman of IAC and Chairman of Expedia, on the implications of the Google-ITA deal and Google's lack of search neutrality.
  • Read the article and visualize the angry bee swarm, whose hive has been kicked and which is pursuing the kicker with a vengence.  

So fixated on stomping on the potential competitive threat posed by Microsoft's vertical search competitive differentiation strategy, i.e. by buying the dominant airline software supplier ITA, Google apparently did not look down to see that it was trampling on the honey pot of one Google's biggest and most important partners/allies -- IAC and Barry Diller -- in buying ITA and abruptly heralding its broader ambitions of invading and conquering the vertical space of its many online content partners.

• Google made a very big strategic mistake on this deal that will be hard for Google's legendary PR machine to cover up.  

Why will the IAC sting hurt Google more than other beehives that Google has kicked?