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The Huge Hidden Public Costs (>$1.5T) of U.S. Internet Industrial Policy

This post introduces a new white paper here with a first-of-its-kind, cost-estimation model of the cumulative hidden public costs of U.S. Internet industrial policy* entitled: “Internet Platform Corporate Welfare and Leechonomics.” *U.S. Internet-first, industrial policy in the 1996 Telecom Act, effectively exempted only Internet companies from: all U.S. communications law, regulation, and public responsibilities; normal non-communications Federal/State regulation; and normal civil liability for what happens via their platforms and business models.

Nutshell Summary: Sweeping Government exemptions and immunities from risks and costs overwhelmingly favor zero-sum, parasitic policy arbitrage and corporate welfare, which perversely fosters unproductive “leechonomics.” U.S. Internet policy most incents platform business that maximizes arbitrage spreads, i.e. taking maximal societal risk that un-immunized competitors can’t take, where the benefits can be capitalized by platforms, and the costs socialized to the public (>$1.5T), because the government has only exempted and immunized platforms from normal accountability and responsibility for consumer welfare. 

Google’s Chrome Ad Blocker Shows Why the Ungoverned Shouldn’t Govern Others

Alphabet-Google is an unregulated monopoly that currently is de facto regulating the entire digital advertising ecosystem – in part via its new Chrome ad-blocker.

With minimal government accountability, it’s no surprise Google apparently is exercising its monopoly power anticompetitively and coercively.  

Only an out-of-control, U.S. Internet policy could create such an upside-down situation where Internet platforms like Google are so ungoverned by the U.S. Government, that they are free to broadly govern other companies in coercive ways that even the U.S. Government legally can’t do.  

Congress needs to pass legislation that restores a fair playing field with equal online-offline accountability to the law. Current U.S. Internet policy and law in the 1996 Telecom Act effectively exempts only Internet platforms from: FCC communications law; Federal and State regulation; liability for consumer negligence; and normal U.S. sovereign governance.

Internet platforms, like Alphabet-Google, act like they are above the rules and outside the law, because they largely are.

What to Expect from the Simons-FTC

Summary

More change is coming to the FTC than most appreciate.

That’s because the FTC is in the process of an unprecedented, clean-slate leadership change, at the same time society is undergoing an extraordinary inflection point – the “techlash.”  

In a nutshell, the evidence to date shows the eventual Simons-FTC is on path to be a tough, bipartisan, populist, by-the-book, enforcer of antitrust and consumer protection laws. That would be in stark contrast to, the “laxter” enforcement and apparent Google-capture, of the 2012-2017 Ramirez-FTC, and the current, sidelined, no-quorum, Ohlhausen-FTC. 

The Solid Conservative Antitrust Case Against Alphabet-Google – My Daily Caller Op-ed

Please do not miss my latest Daily Caller op-ed: “BREAK UP GOOGLE: There Is A Solid Conservative Antitrust Case Against Alphabet-Google.”

 

Evidence Alphabet-Google Expects an Adverse EU Android Antitrust Remedy

This quarter EU antitrust authorities are expected to rule that Google is illegally dominant in the markets for licensable smart mobile operating systems and app stores for the Android mobile operating system, because Google evidently abused its dominance by contractually requiring Android device manufacturers and mobile network operators to install only Google search and make it the default search engine.

Importantly, this expected EU Android ruling occurs in the context of the EU’s seminal antitrust decision last June that: 1) ruled Google’s search services were dominant; 2) ruled Google abused that dominance by giving illegal advantage to its own comparison shopping service; 3) fined Google a record $2.7b; 4) imposed a cease and desist order on Google to stop this illegal behavior in 90 days (or face additional fines of up to 5% of Alphabet’s revenues); and 5) imposed a remedy that requires that rival comparison shopping services get treatment equal to what Google provides itself, a requirement that Google apparently has not been respecting.

What this all suggests is that the next ruling, fines, and remedies that the EU will consider in the Android case, are likely to be more adverse to Alphabet-Google’s business and model than the previous one.

The U.S. Internet Isn’t a Free Market or Competitive It’s Industrial Policy

 

In 16 minutes I overview for you why there is a woefully incomplete understanding of the U.S. Internet’s three “Standard Oil-like” monopolizations (Google, Amazon, and Facebook) and the four cartelization dynamics these three monopolies have collectively spawned. I also spotlight why there is virtually no understanding of the root cause of these artificial and anticompetitive outcomes. Please see this link to a video (2:30-19:05) courtesy of The Capitol Forum and CQ’s Fourth Annual Tech, Media, and Telecom Competition Conference on December 13, 2017.

My remarks at this conference summarize and expand on my White paper entitled: “America’s Antitrust Enforcement Credibility Crisis: America’s three enduring intermedia monopolies and four market cartelizations are a result of lax, asymmetric antitrust law enforcement & America’s anticompetitive Internet-first industrial policy.”

America’s Antitrust Enforcement Credibility Crisis – White Paper

Below is the abstract of my new antitrust white paper, which can be accessed in full here.

I will present it at the Capitol Forum CQ 4th annual tech competition conference in New York City Wednesday on “Obstacles to Antitrust Enforcement.”

It is also a timely and relevant addition to the Senate Judiciary Antitrust Subcommittee hearing Wednesday in Washington D.C. on “The Consumer Welfare Standard in Antitrust: Outdated or a Harbor in a Sea of Doubt?” because it discusses how the Chicago School antitrust consumer welfare standard remains sound as is, but warns that its application to Internet intermediary platforms is being badly distorted by America’s Internet-first industrial policy and its longstanding Internet competition double standard.

Many will find the 27-page white paper with >150 cites, a very helpful, up-to-date, overview and fact set on the current badly troubled state of competition and antitrust in the marketplace today.

A White Paper

State Attorneys General Can Expose Google’s Pervasive Anti-Consumer Practices -- My Daily Caller op-ed

 

Please don’t miss my latest Daily Caller op-ed, “State Attorneys General Can Expose Google’s Pervasive Anti-Consumer Practices.”

 

Google Amazon & Facebook are Standard Monopoly Distribution Networks

 

Washington increasingly is asking what are Google, Amazon, and Facebook?

That’s because they seem to be in the middle of many vexing problems spanning culture, politics, civility, economics, competition, jobs, investment, national security, public safety, consumer welfare, etc.

At core, Google, Amazon, and Facebook are unregulated, economy-wide, distribution networks, that de facto are taking control over core economic processes.

They are modern-day Standard Oils. Google is Standard Data. Amazon is Standard Commerce. Facebook is Standard Social.

Doubt it? Consider reality.

Standard Data: Alphabet-Google is the distribution network for over 4 billion search users, 2 billion Android devices, 15 million publisher partners, 5 million advertiser clients, and 400,000 Android developers. Google’s network has over 200 data-capturing products and services, 15 of the world’s fastest, highest-capacity data centers, and 2000 server points of presence in over 150 countries.

Google commands 19 of the top 25 Android apps downloaded over a billion times including: Search, Play, Gmail, Maps, YouTube, Google+, Text-to-Speech, Chrome, Play Books, Play Games, Play Music, Play Newsstand, Play Movies & TV, Drive, Photos, and StreetView.

Treat Cause Not Symptom of Google & Facebook’s Election Unaccountability -- Daily Caller Op-ed

Please don’t miss my Daily Calller op-ed: “Treat The Cause Not the Symptom of Google & Facebook’s Election Unaccountability.”

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Q&A One Pager Debunking Net Neutrality Myths