Antitrust

What made Apple's Steve Jobs so Angry with Google-Android? The simple answer is Google's leadership profoundly betrayed the longtime personal trust and friendship of Apple's leadership in stealing what Steve Jobs believed were Apple's most prized possessions. The fuller answer is below, in a telling timeline of the once exceptionally-close Apple-Google relationship.

This discussion is timely given Google's current PR effort to convince the public/media that Google and Apple are likely to negotiate a patent "truce" and make Google's Android's patent liabilities go away. Thus it makes sense to drill down to learn more about the real likelihood of Apple being party to any patent-litigation "truce" or grand Apple-Android patent-licensing settlement.

Apple's major $1.05b patent court victory over Google-Android partner Samsung has four under-appreciated implications for Google going forward.

1. The purported Google-Apple settlement talks are going nowhere.
2. Google-Apple patent talks compound antitrust risk.
3. Google's actions, defense strategy, and IP track record drip of guilt and legal vulnerability.
4. Google's acquisition of Motorola has backfired badly.

1.  The purported Google-Apple settlement talks are going nowhere.

Think about it. Whose interest is it to spotlight a phone conversation between Google's CEO Larry Page and Apple CEO Tim Cook and characterize the conversation as an indicator of a coming "truce" or "détente" in the thermonuclear war" between Apple and Google? Google's alone.

Connecting the dots, Google may gain a de facto Monopoly® "Get out of Jail Free" antitrust settlement from the FTC before the election. Bloomberg reports that the FTC has pushed to move up the conclusion of its antitrust investigation from "end of the year" to mid-September. Assuming that report is accurate, it has big implications. Let's connect the dots.

First, the sudden acceleration of the endgame of the FTC investigation strongly suggests external circumstances (i.e. the EU-Google antitrust settlement negotiations timetable) are driving the timing/outcome of the FTC's Google investigation, given that the EU and Google reportedly reached an "understanding" in late July that could result in a settlement of antitrust charges. This suggests the FTC is considering becoming a tagalong to the EU settlement, despite the very different law and process in the U.S.

To learn more about the status of Google Books litigation and Google's IP problems, see my interview with Managing IP Magazine here, entitled: "Opinion: Google is waging war on IP law."

We learn about Google's culture-of-unaccountability from Google itself. Google's leaders have repeatedly indicated their hostility to accountability of most any type.

Listen to Google's own words to learn about their unique and unabashed corporate culture-of-unaccountability.

"New investors will fully share in Google's long-term economic future but will have little ability to influence its strategic decisions through their voting rights." Google's 2004 IPO letter to prospective shareholders from co-founders Larry Page and Sergey Brin.

Below are questions for both the EU and Google, given the expected announcement soon of a proposed settlement of Google's alleged antitrust violations.

Questions for the EU:
Remedies Implications: Since the EU's formal demand for Google to propose acceptable remedies for the abuses and harms that Google has caused would only be appropriate and legal if Google was indeed a monopoly, and in fact abused its monopoly, does the EU effectively consider Google a monopoly which has abused its market power?

Non-compliance penalty? Does the EU reserve the right to issue a formal Statement of Objections in the future if Google proves seriously non-compliant with the proposed monopoly abuse enforcement settlement?

Complainant review? What assurances will complainants have to ensure that Google's concessions are meaningful and real, and will not be easily gamed by Google because of the dearth of technical expertise on the EU enforcement staff?

Effect on other EU-Google Antitrust investigations? Will this monopoly abuse enforcement settlement have any effect on the conduct or outcome of the EU's investigation into Google's alleged anti-competitive behavior with Android and/or Google-Motorola's alleged abuse of standards essential patents?

Google has no shame. This week Google sponsored a two-day summit in Los Angeles entitled: "Illicit Networks: Forces in Opposition" and trumpeted Google's leadership in combating illicit networks, with no acknowledgement of Google's own uniquely atrocious track record of illicit network activity, and even worse, with no public acceptance of responsibility or remorse for Google's illicit behavior.

There is no question that Google's professed public goals of combating "narco-trafficking, human trafficking, organ harvesting and arms dealing" are noble, needed and welcome. However, the serious problem here is Google's extreme cynicism and deceptive PR that they can burnish their global brand without having to practice what they preach.

Let's have the evidence speak for itself, because it proves that Google is its own worst enemy, in not doing what they say.

The Verizon-Cable spectrum sale remains on path for DOJ-FCC approval because it is fundamentally pro-competitive, in the public interest, creates the foundation for a fifth national wireless competitor, puts fallow spectrum to work fastest, and its approval will result in secondary market spectrum sales to other competitors that the DOJ/FCC want to get spectrum.

The recent leaks to the media expressing additional DOJ concerns, and the coordinated letters from the Hill, are apparently orchestrated by the DOJ to increase the DOJ's perceived negotiating leverage to try and "nibble" some final concessions and conditions from Verizon and the Cable spectrum sellers before the DOJ finally clears the spectrum sale for closing.

If one fact-checks and puts in perspective the FTC's expected $22.5m privacy fine of Google -- for bypassing millions of Apple Safari users' privacy and security settings to add a tracking cookie to track users browsing activity -- it looks like faux FTC accountability of Google. Close scrutiny of the FTC's oversight record of Google's exceptionally bad consumer record and very long privacy rap sheet suggests that Google could have little to fear from the FTC on pending privacy or antitrust enforcement going forward, despite PR and optics to the contrary. Unfortunately, the evidence to date indicates the FTC's enforcement oversight of Google has had minimal accountability or deterrent effect on Google's behavior.

To be fair to the FTC, the FTC does not have all the legal authority it needs to fully address the Google privacy enforcement problem, but that being acknowledged, many poor FTC decisions have further self-limited the FTC's ability to confront the exceptional Google enforcement problem.

I. Google appears to enjoy faux FTC Accountability.