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Antitrust

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.

Oops! Googleopolist's wife talks out of school on pending merger

Investors Business Daily and Pete Barlas had a super antitrust scoop today embedded in its article "Video, Cell, Display Ads get More Google Focus".

The article quoted "Google product manager" Susan Wojcicki, (who also just recently married Google co-founder Sergey Brin), candidly defining the online ad market to reporters.

  • Her blunt public market defintion must have Google's antitrust lawyers absolutely cringing and muttering expletive deleteds.

During a meeting with reporters, IBD quoted Ms. Wojcicki saying:

Looks like Canada may review Google-DoubleClick along with FTC and EC

It seems that our friends up North may also be concerned about the anti-competitive impact of the Google-Double-Click merger.

CIPPIC, the Canadian Internet Policy and Public Interest Clinic, is requesting that the Canadian authorities review the Google-Double-Click merger to determine if it is anti-competitive.

  • Seems from their filing that they have similar concerns as the FTC and the EC.
  • Could this be evidence of momentum in the growing concern over this merger? Yep. 

I've done a lot of work on the facts surrounding this merger case and am very confident that the more authorities learn about the facts of the case -- the more concerned and troubled they will get about the profound and broad implications this merger portends for the future of the Internet business model for accessing content.

Who is America's most notorious scofflaw?

The outrage over Google-Youtube's complicity in rampant content theft and piracy continues to spread around the world.

    • "A coalition of Japanese television, music and film companies slammed YouTube Thursday, saying the online video sharing service was not doing enough to rid the site of cartoons and other clips that infringe copyright." ...
    • "There is no middle ground," Matsutake said. "We demand that all copyrighted material be removed immediately."

Let's focus on the corporate scofflaw pattern here: American, Japanese, and European content owners accross a wide swath of content industries are all outraged and suing Google for theft.

"Google-aganda:" Do as I say not as I do" See great Network World piece

Johna Till Johnson of Network World, has got Google's number in the article "Net Neutrality? Google, go first!"

  • "Forget "don't be evil" -- Google's real motto is: "Just trust us (and pay no attention to the man behind the curtain).""

    "Sorry, fellas, I'm not the trusting sort. And I always worry about the man behind the curtain. The reality behind the propaganda is this: The "open" company's considerable fortunes are based around the world's most proprietary search engine. And as for "neutral" -- try Googling Google, and you may notice something surprising: very few negative comments on the company pop up. Odd, no?"

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Q&A One Pager Debunking Net Neutrality Myths