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Antitrust

Googleopoly II: Google's Predatory Playbook to Thwart Competition -- a new White Paper

My new Googleoply II White Paper (see www.googleopoly.net) identifies and documents the twenty-six sources of Google's market power and the five different anti-competitive strategies Google employs to foreclose competition.

  • This original and trenchant analysis brings into sharp focus the moorings of a potential antitrust case against the Google-Yahoo ad pact.
  • The White Paper also should give pause to even the biggest apologists and cheerleaders for Google -- if they are 'open' to reading it.
  • Simply, it is a must-read piece for anyone trying to understand why the DOJ's investigation of the proposed Google-DoubleClick is so serious and important.

The press release for my White Paper is included below:

Internet Expert Unearths Google’s Predatory Playbook:

Why the DOJ Needs to Block the Google-Yahoo Ad Partnership

Partnership Would Further Cartelize Search Advertising -- Harming Advertisers and Publishers

Google-Yahoo "auction" defense is a sham

Google's main defense of why Google-Yahoo is not a price-fixing arrangement that prices are set by competitive auction -- is simply not true. The "its an auction" defense is a sham, superficially appealing, but still a cover-up.  

  • Google's full court press defense of the deal -- with back to back blogs by Google, plus a New York Times op ed defending the deal -- signal its crunch time at DOJ and that Google is mighty concerned.

Why is Google's "auction" defense a sham?

World Federation Advertisers opposes Google-Yahoo ad pact

Uh oh. Google's worldwide customer base, the World Federation of Advertisers is formally recommending that the EU block the Google-Yahoo ad pact.

  • "The World Federation of Advertisers (WFA) fears that the proposed advertising alliance between Yahoo and Google will have a detrimental effect on competition, result in price increases and reduce the options available to advertisers worldwide.
  • It has therefore sent a written submission to the European Commission's Directorate-General for Competition recommending that they block this agreement."

It puts a serious crimp in Google's credibility when Google's world wide customers disagree so publicly with Google that the Google-Yahoo ad pact is good for advertisers...

  • If they can't convince their customers... it will be even harder to convince antitrust authorities...

Countdown: 8 or 23? days to Google-Yahoo DOJ deadline

The plot thickens. Google's CEO Eric Schmidt remains defiant that he is going ahead with the Google-Yahoo pact regardless, but may be signalling Google is willing to wait until the second of its two contractual deadlines: October 11th, versus September 25th per press reports.

What's the real deadline?

  • Under section 16 of the redacted Google-Yahoo agreement submitted to the SEC, the companies gave the DOJ 105 days from June 12th  -- that's September 25, 2008, to complete their antitrust review. Google-Yahoo can extend that review deadline if they choose to. 
    • Another deadline in the Google-Yahoo agreement -- October 11 or 120 days after June 12th. After October 11th either Google or Yahoo can terminate the agreement to "avoid or end a lawsuit" filed by antitrust authorities.
  • There is no official DOJ deadline or timetable to file an antitrust suit if they choose to do so.

Clearly there has been a cascade of ominous developments that signal the DOJ investigation of the Google-Yahoo deal is very serious indeed.

World Assoc. Newspapers Opposes Google-Yahoo deal

The World Association of Newspapers stated it "strenuously opposes Google’s attempt to take over a portion of Yahoo’s content advertising and syndicated search businesses. Google already substantially dominates both businesses and its market dominance is growing by the day. Yahoo is (and should continue to be) Google’s most significant competitor in the syndicated search business and is (and should continue to be) its only real competitor in content advertising."

The WAN also said:

  • "Perhaps never in the history of newspaper publishing has a single, commercial entity threatened to exert this much control over the destiny of the press."
  • "Freedom of the press is too important to rest in the hands of a single company." (FreePress? Where are you?)

Google, you have another BIG problem.

  • In addition to having the association of the top advertisers representing 9,000 brands oppose your deal, Google now has the association representing 18,000 newspapers world wide 'strenuously' opposing the Google-Yahoo deal.

Now large powerful voices from Google's two biggest customer segments have seen through Google's pathetically self-serving argument that it needs to cartelize the search advertising industry to best serve its customers.

Better late than never. Content providers were largely asleep at the switch in the FTC's review of the Google-DoubleClick merger.

Countdown: 11 days until Google-Yahoo DOJ deadline -- More troublesome info comes to light

Advertising Age reports that the ANA asked Google to identify any major advertisers in support of the Google-Yahoo deal. ANA did not get any. Ouch!

  • Pretty damning of Google's claims to be looking out for the best interests of their customers...

ANA CEO Bob Liiodice "also said he asked Google and Yahoo for more details on their claim that the deal will theoretically yield better return for marketers. "We said, 'Can you show us some data from the test you collaborated on?' They either didn't know or didn't share." Ouch! Ouch!

  • More damning evidence that Google isn't looking out for their customers -- probably because Google knows it is the only place in the world advertisers can go to broadly and efficiently reach the billion plus Internet audience.

Bottom line: ANA CEO Bob Liodice sums up the problem quite nicely in Business Week's article: Google's Antitrust Troubles in describing the proposed Google-Yahoo deal:

  • "This is not a good environment for advertisers."   

 

 

Is Google’s Algorithm an Honest Broker? -- A new crushed competitor complains to DOJ it is not.

A competitor crushed by drastic changes in Google’s algorithm is formally complaining to the DOJ Antitrust Division that Google’s behavior is anticompetitive as part of the DOJ’s review of the proposed Google-Yahoo ad partnership.

  • Joe Nocera has a great column not to be missed in the New York Times: “Stuck in Google’s Doghouse,” which details how Sourcetool, a business to business directory website, was made and then crushed by Google’s black box algorithm.

Two big takeaways:

 

First, expect this to be the first of many more formal complaints to DOJ against Google for anticompetitive behavior because the ANA, the association of the largest U.S. advertisers, broke the ice in calling for DOJ to block the Google-Yahoo partnership.

Countdown: 14 days until Google-Yahoo DOJ Deadline

Only 14 short days until Google-Yahoo's September 25th deadline for DOJ to complete its review of their proposed advertising partnership...

  • Adding some drama to the deadline, the San Francisco Chronicle captured Google's CEO Eric Schmidt's, 'make my day' attitude toward the DOJ review of his ad deal: 
    • ""We are going to move forward with it," ...after being asked whether the companies would wait for the Justice Department to complete its review."
    • Google's defiant attitude brings to mind a twist on another of my favorite movie quotes: "Approval! We don't need no stinkin approval!" 

Under section 16 of the redacted Google-Yahoo agreement submitted to the SEC, the companies gave the DOJ 105 days from June 12th  -- that's September 25, 2008, to complete their antitrust review (Google-Yahoo can extend that review deadline if they choose to). 

  • There is another interesting deadline in the Google-Yahoo agreement -- October 11 or 120 days after June 12th. 
    • Importantly, after October 11th either Google or Yahoo can terminate the agreement to "avoid or end a lawsuit" filed by antitrust authorities. They can also terminate the agreement if a court blocks the deal.

Past experience suggests Google won't back down easily if Justice challenges the agreement, given that Google routinely snubs its nose at U.S. governmental authority:

The Irresponsibility of Google's 'Publicacy' Mission -- claims another innocent bystander -- United Airlines

Can you trust Google to responsibly exercise its power? Google's crusade to make all information accessible -- no matter what -- has indiscriminately mowed down another innocent bystander.

  • United Airlines stock value lost three quarters of its value on Monday ravaging spooked UAL shareholders.
  • Google's Googlebot 'crawlers' mistook a 2002 article about UAL's 2002 bankruptcy -- as a new and current story -- which when wrongly spread efficiently by GoogleNews alerts to everyone interested in United Airlines, freaked out current shareholders who dumped all their stock. Oops. Ouch. But no apology from Google...  
    • Two good Wall Street Journal stories yesterday and today explain Google's culpability in this disaster for UAL pretty well. 
    • This is a stark reminder, that anything that a Googlebot can crawl, it will make public. It will leave no digital rock unturned to find whatever is under a rock -- never mind if it was hidden for good reason, privacy, security, ownership -- Googlebot say "finders keepers losers weepers."

This latest UAL incident highlights a clear pattern of Google's 'publicacy' philosophy that any information Google can find, copy or photograph -- it should put immediately into the public domain whether it is accurate information, private unauthorized information, or information owned/copyrighted by others.  

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