You are here What's Needed in a DOJ/Google-Yahoo Consent Decree?
Submitted by Scott Cleland on Tue, 2008-10-14 19:09
Given the Wall Street Journal's reporting that "Google, Yahoo seek to avoid suit over ad deal" -- what provisions are needed in a court-enforced consent decree between the DOJ and Google-Yahoo in order to protect competition?
Consent Decree Principles to Protect Competition:
- Prohibit any agreements between Google and Yahoo, which generate substantial negative efficiencies or negative network effects.
- (At core, the proposed ad agreement embodies a negative efficiency-transfer dynamic.
- In other words, the agreement decreases Yahoo-Panama's efficiency in quality-improvement and relevance-learning, while simultaneously increasing Google's efficiency in quality-improvement and relevance-learning, by transfusing the efficiency-lifeblood of search engine advertising quality and relevance-learning -- search queries -- from Yahoo to Google.)
- Impose bright-line prohibitions that do not require extensive or intensive DOJ, Court, or regulatory resources to monitor or oversee compliance with the consent decree.
- Given the extraordinary dynamism and complexity of search engine advertising and the millions of lines in computer code involved, arbitrary compromises/limitations in grey areas invite pushing-the-envelope by the companies and frustratiion of oversight by DOJ and the Court.
- Apply any Google-Yahoo ad partnership restrictions to all analogous ad partnerships between Google and other search competitors.
- Given Google's core dominant search share of ~60-70%, Google's ad partnerships with #4 AOL and #6 Ask.com, have analogous negative efficiency-transfer dynamics to Google-Yahoo.
- Base the duration of the consent decree on a third-party measurement of competitive facts -- not an arbitrary time period.
- Require full and contemporaneous auction transparency so customers can win the auction if they bid the highest price -- the definition of an auction; and so customers can contemporareously understand how any algorithmic variable could affect the outcome of their bids.
- Require 'honest broker' practices:
- disclosing to bidders contemporaneously if Google is bidding or has an interest in a particular auction, and
- prohibiting any undisclosed self-dealing or front-running in key word auctions.
- Require fair representation and meaningful disclosure of financial conflicts of interest.
- Require interoperability with third party measurement and management tools and ad networks/exchanges in order to prevent any foreclosure of competition through denial of access to complements necessary to compete with the Google and Yahoo platforms.
- Prohibit the leveraging of market power in search to advantage Google-owned properties or content, like YouTube, DoubleClick, Checkout, Google Maps, Google Earth, Blogger, FeedBurner, etc.
- Prohibit use of surplus market power to secure distribution agreements which impede efficient competitive choice.
- Prohibit retaliation against advertisers, publishers, competitors, and consumers.
Bottom line: Any consent decree addressing Google-Yahoo agreement will have to include more than the companies' 'concession' to remain competitors after the deal -- which is already implicit in antitrust law.
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