Copyright

My latest Google antitrust white paper, "Googleopoly IV: The Googleopsony Case," is the first antitrust analysis which connects-the-dots between Google's search advertising selling monopoly and Google's information access buying monopoly or "monopsony" by explaining and documenting how Google is harming competition in digital: news, books, broadcasting, artwork, documents, and analytics; and harming consumers seeking quality digital information that is not free.

There's been scant analysis of how the Google Book Settlement process has been altered going forward given recent major developments:

• The "hornet swarm" of objections to the Google Book Settlement, and 
• Google's recent preemptive concessions on:
  • Privacy at the the urging of the FTC; and
  • Competition under pressure from competitors and the DOJ. 

To date the discussion of outcomes has been largely binary, will Federal District Court Judge Chin approve or disapprove the proposed Book Settlement?

With the German Government just the latest angry hornet joining the growing swarm of opposition stinging the Google Book Settlement, how did Google's book digitization initiative go so wrong? 

If one listened to Google, their problem is two-fold:

• First, it is just a bunch of Luddite ingrates who are too small-minded to grasp Google's magnanimity to humankind and world knowledge.  
• Second, without competitors spreading misinformation, there would only be a world chorus of gratitude.

As I have asserted many times before in this blog, Google is its own worst enemy.

• Google reflexively looks everywhere but inward when determining the origin of its external problems. 

So how did such an angry swarm of opposition engulf the Book Settlement making it increasingly unlikely to be approved by the Court?  

"The settlement as it exists now is absolutely silent on user privacy" said Angela Maycock of the American Library Association at a Google Book Settlement panel per the San Francisco Chronicle.

• This should not be surprising because privacy is simply the flip side of the anti-competitive concerns surrounding the Book Settlement.

I posit that privacy protections were not included in the Book Settlement for two big reasons -- the first reason is more privacy related and the second reason is more competition related. 

First, Google is a big adherent of the Web 2.0 movement that believes that transparency is a more important value than privacy.

Google's latest defense of its Book Settlement in Europe has provided an illuminating window into Google's own cultural-self-awareness of Google's dominant market power over books/content.

In August 23 New York Times:

• “We believe that we are helping the industry tremendously by creating a way for authors and publishers to be found,” said Santiago de la Mora, Google’s head of printing partnerships in London.

• “Search is critical. If you are not found, the rest cannot follow."

The strong implication from Google here is that authors were in proverbial "nowheres-ville" before Google "discovered," copied and indexed them -- proving that Google is the real value creator here... not the author of the content/book.

• Google is candidly acknowledging its unique and dominant market power over books because Google is the only entity in the world with the resources, the business model, the low opinion of the value of content on the Internet (it should be "free"), and the legal strategy to illegally copy literally millions of copyrighted books without permission.

What is more valuable the content or the search?

New evidence of very serious Internet security problems sheds new light on why Senate Chairman Rockefeller has taken such a forceful leadership role on cybersecurity and why President Obama made increasing cybersecurity a national security priority in his 5-29 cybersecurity address.

• Computerworld reported testimony before a Congressional oversight panel that sensitive details about a Presidential safe house, Presidential motorcade routes, and every U.S. nuclear facility were leaked on the Internet via a LimeWire P2P application. 
• This serious Internet security problem with P2P applications was also the subject of a 2007 U.S. Patent and Trademark Office (PTO) report , which documented the severe security implications of P2P file-sharing programs that commonly have technological features that induce sharing of information that people did not want or expect to be shared.

The continued seriousness of P2P file-sharing breaches have prompted House Oversight Committee Chairman Edolphus Towns "to call for a ban on the use of peer-to-peer (P2P) software on all government and contractor computers and networks," per Computerworld.   

FOR IMMEDIATE RELEASE                                         

July 21, 2009                                                                                          

Contact:  Scott Cleland

703-217-2407

NetCompetition.org Files Reply Comments on National Broadband Plan NOI

Plan should ensure Government & private sector can work together and aren’t at cross-purposes

Amazon's decision to seize e-copies of George Orwell's "Nineteen Eighty Four" and "Animal Farm" from Kindle users after Amazon had sold and already delivered the e-books to customers -- drips with irony. 

• For those who have missed the widespread uproar over Amazon's actions see NYTimes or Google "Amazon 1984." 

Irony #1: Fans of George Orwell's political satire know that Animal Farm is all about animals who originally profess equality for all the farm animals, but once in power become corrupt and establish rules that make those in power much more equal than others. 

An unusual and notable pattern appears to be developing with Google and DOJ antitrust enforcers. 

• Twice in less than a year, the DOJ has formally investigated Google for trying to anti-competitively extend its monopoly market power via a market agreement.
  • It is unusual for the DOJ to seriously investigate a single formal market agreement/settlement for anti-competitive behavior because normally antitrust lawyers can convince a company's leadership to stay away from the anti-competitive line that possibly could prompt a DOJ investigation and/or suit.
  • What is exceptionally unusual is for a company to propose two non-merger-related market agreements in less than a years time that prompt serious antitrust investigations from the DOJ.
• Today, the DOJ Antitrust Division wrote a letter to the Federal Judge overseeing the Google Book Settlement deal "to inform the court that it has opened an antitrust investigation into the proposed agreement between Google and representatives of publishers and authors... we have determined that issues raised by the proposed settlement warrant further inquiry."

This is the second formal agreement in less than a year that Google has negotiated and drafted that has "crossed the line" prompting DOJ antitrust officials to have to formally and publicly investigate. 

Google has begun to admit and make concessions that the Book Settlement it originally negotiated with authors and publishers is anti-competitive.

To try and win the support of the biggest libraries, Google has now cut a potentially exclusive side deal giving the largest libraries the benefit of a price oversight/arbitration mechanism per the New York Times.