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Antitrust

Google should be hearing EU antitrust footsteps...

It is never a good omen for a merger's approval outlook, when EU antitrust authorities can't wait to investigate the impact of the merger and proactively inititiate their own antitrust investigation -- before their official process even gets started.

Google's antitrust lawyers have to be bummed by the development reported by Reuters that: "EU questions customers over Google-DoubleClick deal."

Google as editor of content and defender of free speech...when convenient

The Financial Times had a noteworthy article about Google's role as an editor of content and defender of free speech -- when Google finds it convenient: "Thailand lifts Youtube ban after Google agrees to block some clips."

This article is an interesting juxtaposition to Google CEO Eric Schmidt's very recent comments on the importance of free speech at a speech before the Progress and Freedom Foundation

  • "We need to defend freedom of speech as more speech comes on line. ...Let’s do this in the right way. Let’s preserve the openness and the freedom of speech principles. You could use Internet censorship, for example, as a non-tariff trade barrier, which we all need to fight because governments, especially non-U.S. governments, have an incentive to some degree to control the populations -- to do all the things that are obvious if you’re afraid of empowering your citizens."

 The FT article is a good opportunity to review if Google's actions support Google's rhetoric when it comes to Google defending free speech...

Online ad trends show the huge stakes in the Google-Doubleclick merger

A major reason why the stakes are so high in the FTC's review of the Google-DoubleClick merger is how remarkably fast online advertising is overtaking other advertising industry segments that have been around for decades.

An important development occurred just before the long Labor day weekend that I didn't want people to miss. Media Daily News reported that: "Internet displaces radio as fourth largest ad medium."

Economist's "Inside the Googleplex" is highly relevant to FTC's review of Google-DoubleClick

I always enjoy reading the Britain-based Economist's take on things American because they bring a detached, across-the-pond, critical perspective that often is very illuminating.

Relevant to Google-DoubleClick merger:  

Why conservatives care about antitrust enforcement

As a conservative, I embrace antitrust law as both a necessary law and as a time-tested, light-touch, free-market arbiter mechanism to prevent potential monopolization in the marketplace.

I also embrace antitrust enforcement as a conservative, because it is an outstanding mechanism to preserve free market competition and protect it from the natural inclination of Big Government to over-reach with its heavy hand of regulation.

Greg Sidak of Georgetown University and Hal Singer of Criterion Economics have produced an outstanding editorial in the Washington Times on this subject concerning the proposed XM-Sirius merger. I recommend that every conservative who cares about limited government should read it.

  • In one sentence, Greg and Hal bring tremendous clarity of thought to this important marketplace distinction:
    • "...conservatives should also reject the idea of taking two unregulated competitors and creating in their place a brand-new regulated monopoly through the merger approval process."
      • In other words, soft antitrust enforcement is raw meat bait for the ravenous regulatory appetite of those who favor Big Government.

This explains why as a conservative, I have been so focused philosophically on highlighting the anti-competitive effects of the Google-DoubleClick merger and why I believe the FTC will ultimately block that transaction.

oops! Google-YouTube serving ads just like competitor DoubleClick

Google has another big "oops!" problem where its actions in the marketplace do not match the line they are feeding to the FTC/EC antitrust investigators who are reviewing Google's proposed acquisition of dominant ad-server DoubleClick.

  • It appears that Google's "innovation without permission" culture is confronting Google's antitrust lawyers with yet another merger review mess to try and clean up.

So what's the new big contradiction/problem?

  • Google's lawyers have been arguing to FTC/EC authorities that Google is not a competitor to DoubleClick because Google only does search and DoubleClick only serves display ads.
    • How can there be any antitrust problem if they don't compete argues Google?
  • Well today Google's YouTube network has begun selling overlay ads to select videos running on YouTube.
    • According to ComScore, YouTube is the Internet's most-visited video website with ~189 million visitors in July.
    • That means that Google is now the exclusive ad server of display/rich media advertising to the largest video site in the world.

Its now hard for Google to still claim with a straight face that they aren't in the ad-serving business and that they don't compete directly with DoubleClick.

Google's "black box" search engine is the opposite of "open"

Google continues its self-serving campaign of "open for you, but not for me."
The master of the double standard, Google loves to claim that Google is "open" and even has the gall to name its net neutrality coalition the "Open Internet Coalition."
However, does Google really support "open" principles? In other words, Google talks the talk, but does it walk the walk?

  • Or is Google just playing lip service to "openness" in order to gain a competitive advantage with special Washington treatment and generous corporate welfare?
    • The facts indicate it.

Elise Ackerman of the San Jose Mercury News had a noteworthy and relevant article on this issue: "Google's growth has come at a price."

  • The article mentions that concerns over the lack of "openness" in Google's search, are "driving the effort to develop an open-source search engine."
    • "Search should be transparent, open and participatory," said Jimmy Wales, founder of Wikipedia... Wales says Internet search is plagued by the same problems that bedeviled proprietary software - lack of accountability, transparency and freedom."
    • "Google closely guards its top-secret formula for ranking Web sites, making it impossible for a publisher to know why a site might enjoy front-page ranking one day in the search results and drop to Page 100 the next."
    • "... Wales' programmers will publicly disclose their algorithms for ranking results in the Wikia Search project."

Well Google, if openness is truly an important principle to Google, why not agree to make Google's search algorithm, which is the industry's ultimate "Black Box", "open" to all so all can benefit?

WSJ "Googling 'Monopoly' Op-Ed Superficial

Google must be worried about their Doubleclick acquisition having arranged an op-ed in the Wall Street Journal today entitled Googling 'Monopoly' by PFF President Tom Lenard and Emory University professor Paul Rubin.

  • While Google must be thankful for the placement in the WSJ, they have to be bummed about the unfortunate title.
    • Google loves to generously slather the "opoly" epithet on any formidable competitor who is in their way, so it must drive them crazy when it sticks to them in the WSJ.

First, let me say that I genuinely respect Mr Lenard and Mr. Rubin, and understand that on antitrust issues, analysts can honestly disagree on outcomes and impacts.

My oops on Google's oops in speaking out of school on merger

A couple of readers kindly pointed out that I made my own oops in my early August blog post: "Oops! Googleopolist's wife speaks out of school on pending merger."

I regret any confusion I created in mistaking that "Google product manager" Susan Wojcicki" was married to Google co-founder Sergey Brin -- in fact she is the sister-in-law of Google co-founder Sergey Brin, and also one of the earliest employees of Google.

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Q&A One Pager Debunking Net Neutrality Myths