EU

Government scrutiny of Internet platform unaccountability is here to stay because it is a strong bipartisan concern and interest.   

Yesterday’s House Judiciary Committee hearing on “Transparency & Accountability: Examining Google and its Data Collection, Use and Filtering Practices” featured Google CEO Sundar Pichai as the lone witness.

The hearing provided a ~30 congressperson data-set and proxy for where Google specifically, and Internet platforms generally, stand politically at this point in the techlash gauntlet.   

Are Google, Facebook, and Amazon, pro-competitive Internet “new entrants” or anti-competitive enduring monopoly Internet platform incumbents?

Apparently, that critical distinction depends less on evidence, and more on one’s antitrust predilections and prosecutorial presumptions – i.e. does one view the Internet competition glass half-empty (pessimistic) or half-full (optimistic).  

Recent evidence from the Trump DOJ Antitrust Division suggests it’s in the Internet competition optimist camp almost to the point of Internet competition Pollyannaism, despite the evident Internet platform antitrust enforcement drumbeat around the world, in Congress, and the White House, to the contrary over the last 18 months.

We all have been played.

One of Google, Facebook, and Amazon’s greatest innovations to date may have been deceiving the U.S. government and voters with the narrative that their core Internet business models and practices were only good, innovative, pro-consumer, and worthy of no regulation, when they knew it was untrue, while at the same time lobbying that if an ISP pursued their same Internet business models and practices, that it would be anti-innovation, anti-privacy, and worthy of maximal telephone utility regulation, including a permanent, user-subsidized, price-of-zero for Google, Facebook, and Amazon’s outsized, pure profit,  commercial downstream Internet traffic usage.

Can you say: “winner take all” industrial policy?

Can you say: “regulatory arbitrage” game?

Can you say: “unlevel playing field?”

After this year’s revelations of Google, Facebook, and Amazon’s many bad, unfair, and deceptive practices, it warrants revisiting if their past forceful policy positions that only ISPs are a risk to consumers, privacy, and competition, and only ISPs warrant utility-grade net neutrality, non-discrimination, and maximal privacy regulation, were self-serving, anticompetitive, and deceptive distractions from their own anti-privacy, discriminatory, paid-prioritization practices?

We have all been played like a fiddle.

What is the simple key to passing bipartisan net neutrality and online privacy legislation?

Put consumer interests first with a new Federal consumer-centric law, not last like today, where technology interests come first, in technology-centric law which minimizes responsibility to safeguard consumers’ choices, privacy, and security.

The tell for whether someone supports bipartisan Internet legislation to protect consumers and level the playing field or not, is whether they are focused on what is best overall for the online consumer or focused on special treatment for one technology over another. It is that simple.

Only people vote, bleed, or care. Technologies do not.

The Bipartisan Case

The origin of the term “Internet” is “inter-networking” per Robert Khan, co-inventor of TCP/IP, the Internet protocol that essentially enables and thus defines which networks are interoperable parts of the Internet’s overall network of networks, which now effectively encompasses ISPs, Internet services, Intenet platforms, cloud providers, apps, and others.  

In this post-mid-term election sea of partisanship, expect a political safe harbor for bipartisanship in the next Congress to protect consumers and level the playing field, by bringing more accountability and transparency to the Internet’s unchecked, winner-take-all, biased-brokers, of online supply and demand: Google, Facebook, and Amazon.

This is timely and relevant because conventional wisdom appears to dismiss bipartisanship in this area as a phase and not lasting to conclude that no Internet-related legislation passes next Congress.

This analysis considers the political reasons why a Republican-controlled Senate and Democrat-controlled House could cooperate and pass bipartisan legislation that brings much more accountability and transparency to the unaccountable Internet triad of Google, Facebook and Amazon.

The Reasons Efforts for More Google Facebook Amazon Accountability Will Remain Bipartisan 

First, there are evident high-level lasting concerns from both the right and left about the Internet triad’s unaccountable power.

Summary

Why do Google, Facebook, and Amazon apparently so befuddle, overwhelm, and run circles around antitrust authorities to date?

Google, Facebook, and Amazon defy normal narrow, static antitrust market definition analysis and understanding, because what is new and most defines them in an antitrust context is their exceptional, wholistic, centripetal-force dynamic, which is vortex effects and efficiencies, i.e. an effective whirlpool dynamic that in encircles, swirls, and sucks everything near, deeper into an increasing vacuum power trap.

Simply what is different and under-appreciated with these companies is the extraordinary and unprecedented nature, purpose, and effect of the efficiencies their platforms generate and proliferate.

To date antitrust authorities myopic mistake has been to narrow their scope to a market segment and miss the big picture of the enterprise’s combinatorial nature, purpose, and effect -- as a whole, because the purposeful whole can be much different and more powerful than the random sum of its parts.

Google and Facebook’s cartel dominance of social media, consumer data, digital advertising, and content/news discovery represents a quintessential unlevel playing field in the information/content economy.

The Google+Facebook cartel now controls most mass online info-flows to consumers, without the competitive or public accountability controls other companies face.

However, recent news of Google+ deciding to permanently not compete with Facebook going forward raises an important question:

Is Google+ jumping out of the proverbial privacy frying pan into the Google+Facebook antitrust fire?

SUMMARY:

U.S. antitrust enforcement is evidently undergoing a sea change in how it treats consumer privacy in its antitrust investigations. 

Since the early 2000s through apparently late 2017, DOJ and FTC antitrust enforcers did not consider privacy to be a “non-price factor” in antitrust enforcement.

However, since 2018 the evidence catalogued below indicates that privacy now can, and will increasingly be, a factor in antitrust enforcement involving Internet multi-sided business models going forward, in determining whether a commercial practice anticompetitively harms innovation, choice, or quality.

That’s because of increasingly evident consumer “revealed preferences” for privacy; personal data’s effects on competition for markets; and the inherent “flexibility” of the antitrust consumer welfare standard to adapt to new technological, market, economic, and consumer developments. 

A big reason many investors and the marketplace have concluded that Google and Facebook face no serious antitrust risk going forward was the backward-looking, core conventional-wisdom presumption that harms to consumers’ privacy and data security were largely irrelevant because of the consumer welfare standard focus on price reduction in Internet markets where the “price” is already zero, i.e. free.  

Consider the ways that the EU’s announced antitrust probe of Amazon is a game changer in spotlighting how Amazon Marketplace’s conflicted-expanse is a de facto unlevel playing field.

First, the ongoing probe will spotlight that Jeff Bezos, Amazon, investors, and U.S. antitrust authorities can no longer dismiss that Amazon faces antitrust risk.

The EU’s competition commissioner, Margrethe Vestager has launched a preliminary, expert, bulls-eye antitrust probe at by far the most antitrust-vulnerable part of Amazon’s online market-monopsonization model – i.e. the anticompetitive Amazon Marketplace structure where Amazon first commands unchecked, most of its competitors’ most sensitive business confidential information/data and metadata; and second non-transparently and unchecked, determines their competitors’ rank and costs to commercially access Amazon’s monopsonized online consumer demand.

Simply the EU is investigating whether Google’s unchecked dual role as an economy-wide merchant and platform make it an inherently anticompetitive biased-broker?

There can’t be a “free exchange of ideas” without transparent competition for the exchange of ideas.

This is a timely point for three reasons.

First, the DOJ announced: “The Attorney General has convened a meeting with a number of state attorneys general this month to discuss a growing concern that these companies [Google Facebook Twitter] may be hurting competition and intentionally stifling the free exchange of ideas on their platforms." [Bold added.] This “competition” concern ultimately falls in the lap of the DOJ’s Antitrust Division and State Attorneys General.