Viacom vs Google evidence has big antitrust implications

Wow. The evidence Viacom unearthed in discovery in their $1b copyright infringement suit against Google is surprisingly damning. The evidence shows willful, premeditated, deceptive, and organized efforts by YouTube, Google and Google-YouTube to infringe copyrights for anti-competitive and financial gain.

  • Read the quote summary first here, then review the copious evidence/history in the 86 page Viacom Statement of Facts here, and then review Viacom's Summary Judgement memo of law here

So what are the broader antitrust implications of all this new and serious evidence of illegal activity and misconduct by Google-YouTube?

First, DOJ really blew it for not even asking for a second request of information on Google's acquisition of YouTube.

  • The second request likely would have unearthed the illegal "pump and flip" dotcom behavior of YouTube, where YouTube proactively and premeditately infringed on copyrights to pump its traffic and hence its value. Google bought YouTube for $1.6b on no revenues and Google admitted it paid $1b more than it was worth to keep it out of the hands of competitors.
  • If DOJ had looked closely, they would have learned YouTube was engaging in a mass fraud of a publicly-traded company and public shareholders.
  • If they had not approved the deal after a close look, Google may have not been tipped as fast to monopoly. YouTube, when combined with Google represents one quarter of all its searches and is the second largest generator of searches in the world -- ahead of Google's #2 competitor Yahoo.

Second, these documents pull back the curtain into Google's inner workings, decision processes, anti-competitive decisions, and treatment of legal/ethical matters -- and the view of what's behind the curtain is not pretty and nothing like the saintly personna and brand goodness that Google's legendary PR represents to the world.

  • After reading these documents, any law enforcement personnel will be much less willing to give Google the benefit of the doubt in their assertions and representations of fact/intent in other high-profile pending antitrust matters like:
    • The FTC's review of Google's acquisition of AdMob;
    • The DOJ's review of the Google Book Settlement; and
    • The EU's investigation of the antitrust complaints of Foundem, Ciao, and ejustice.FR.
  • More importantly, it will embolden the government to subpoena much more broadly and deeply, because if Google was so cavalier and premeditated in breaking copyright laws, there is very likely to be comparable evidence awaiting discovery on "Google's Predatory Playbook to Thwart Competition" (see Googleopoly II).
  • The evidence also points law enforcement to people inside Google who did not agree with the illegal behavior that Google premeditately decided to do. They would likely be the first people to want to come clean with law enforcement on these and other matters.

Lastly, this new, broad and very incriminating evidence against Google can't help but increase the liklihood of a DOJ Section 1 & 2 monopolization case against Google in the future and/or a full blown antitrust investigation by the EU in the future.

In sum, discovery is not Google's friend. They have been hiding a lot and a lot has now been made public.

  • There is tremendously more information about how Google abuses its market power, which will come to light over time. 
  • Given my extensive antitrust research on Google over the last few years (see I decided to publish to make Google more transparent and accountable.
  • I believe what has been uncovered to date is just the tip of the iceberg on Google.