Antitrust

If net neutrality/open Internet proponents believe that non-dominant, competitive broadband providers should be not be allowed to advantage their own content, products or services over competitors', why do they tolerate monopoly application providers disadvantaging their competitors' content, products or services? 

A new private antitrust lawsuit by TradeComet.com against Google brings that question to the forefront.

• Trade Comet charges that, since the DOJ concluded in November that Google was a search advertising monopoly, it is anti-competitive for Google to dis-advantage its competitors' products, services, and content for the benefit of Google's products, services and content.      

  This new antitrust suit is significant and bears watching for a variety of reasons.

The FTC staff's revised behavioral advertising principles make it clear that the FTC understands the Internet’s growing privacy-publicacy fault-line. The FTC’s new guidelines are all about tackling the growing problem of unauthorized publicacy – meaning the tracking, collecting and “mashing-up” of information consumers reasonably expected to be kept private.  (“Publicacy” is the opposite of privacy.)

• Privacy-Publicacy Fault-line Part I, II, III.

Why are the FTC’s new guidelines a much bigger deal than most appreciate?

First, the new guidelines put a new and brighter privacy regulatory spotlight on Google, the world’s dominant behavioral-advertiser, and to a lesser extent, Yahoo, Google’s distant #2 competitor.

The content and applications industries have yet to connect-the-dots of the U.S. Department of Justice concluding search advertising is a monopoly and that Google has pro-actively sought to further its monopoly in search advertising and search advertising syndication.  

• The long term implications of this DOJ conclusion are sweeping and profound for content and apps providers.  

Simply, if the DOJ believes Google is a monopoly, then it follows that DOJ would believe it is illegal under antitrust law for Google to proactively disadvantage its competitors’ content/applications by favoring Google-owned content/applications over competitors’ content/applications on Google’s search advertising monopoly platform.

Kudos to John Paczkowski of the Wall Street Journal's Digital Daily blog for a interesting big picture perspective on Google's evolution. Don't miss it.

Tribune's bankruptcy is fresh evidence that the recession is accelerating the demise of journalism precipitated in large part by the advent of the Internet. And where is the Internet taking the journalism profession and business? Not towards the utopian citizen journalism of conventional wisdom, but inexorably towards the gravitational pull of the black hole of the Internet -- scale.  

• To understand the future of the journalism business, and most content businesses for that matter, one has to understand The Internet Black Hole of Scale which is comprised of:
  • Audience size and reach:
  • Advertiser network breadth and depth;
  • Publishing breadth, depth and timeliness;
  • Sales/targetting data volume, integration and specificity; and
  • Infrastructure platform economies of scale and scope.  

So why can't the journalism profession/business compete long-term with The Black Hole of Internet Scale?

Sandy Litvack, the DOJ's outside counsel on Google-Yahoo told AmLawDaily that the case the DOJ was prepared to file against Google-Yahoo was far more serious and sweeping than previously thought or known.

• "The never-filed government complaint would have charged that the agreement violated Sections 1 and 2 of the Sherman Act, Litvack tells the Am Law Daily in one of his first interviews since the companies canned the venture. Section 1 bans agreements that restrain trade unreasonably. Section 2 makes it unlawful for a company to monopolize or attempt to monopolize trade."
• ""It would have ended up also alleging that Google had a monopoly and that [the advertising pact] would have furthered their monopoly," Litvack says."

"On Nov. 17, Google began running ads on Google Finance, a financial-news site, and said it would soon start showing ads to some users of its Google News service as well." That was the big news in the Wall Street Journal's front page story "Google gears down for tougher times."

Is Google, which owns the world's largest Internet audience, with over 700 million users, a direct competitor to all media? You bet!

The anticompetitive significance and conflicts of interest in what Google is now doing are very large.

To date Google lulled its competitors into a false sense of security in building an audience for Google News and Google Finance but not directly competing with Google's supposed media partners for online ads.

• The Googleopoly is now behaving like any monopoly does.

The problem for media companies is that Google is a non-transparent black box, which represents itself to be an honest broker of ads -- when it is not. It obviously has a huge financial conflict of interest in serving ads.

• How can Google claim to be an honest broker of online ads when it controls ~90% of all online avertising profits in the U.S. and is planning to blatantly self deal and front run the interests of their media customers?

What Google is proposing to do is the conflict of interest equivalent of auditing their own books, or grading their own papers.

I consider myself of like mind with my friend Adam Theirer of PFF on most all issues of substance, however, I must take strong exception to his misguided take on Google and Googlephobia. 

In Adam's post "Googlephobia: Part 6 - the Left Begin to Turn on Google":

Friday the Atlanta Journal Constitution ran my op-ed: "Googleopoly Darkens Future of Innovation."