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March 2010

Google-AdMob: An FTC Antitrust Enforcement Watershed -- Lessons from Google-DoubleClick & EU

Will the FTC strictly enforce antitrust laws in its review of Google's AdMob acquisition? Google-Admob is a watershed decision for the FTC given that:

  • Google recently blew off the DOJ's serious antitrust objections to the pending Google Book Settlement;
  • The EU opened a preliminary investigation of antitrust complaints against Google from companies in the UK, France and Germany; and
  • The DOJ had to play backstop to the FTC and block the Google-Yahoo Ad Agreement, less than a year after the FTC incorrectly assumed in their 4-1 approval of the Google-DoubleClick deal that:
    • Yahoo and others would provide sufficient competition to Google; and
    • Google acquiring DoubleClick would not "substantially lessen competition" or tip Google to a monopoly.    

A recent New York Post article: "FTC inclined to approve Google's acquisition of AdMob" states the deal "may just squeak by federal regulators."

Did Google Over-React to China Cybersecurity Breach? -- "Security is Google's Achilles Heel" Part VII

It appears Google impetuously over-reacted to the big cyber-security breach of Google and a reported ~30 other companies. Google alone publicly blamed China and only Google publicly pledged to stop censoring search results in China in retaliation.    

What is the evidence that Google impetuously over-reacted here?

First, Forbes reported: "Researchers Call Google Hackers 'Amateurs' -- A new report says the attack on the search giants network was far less sophisticated than it has claimed." Specifically:

  • "A great play is being made about how sophisticated these attacks were," says Damballa's vice president of research Gunter Ollman. "But tracing back the attacks shows that they were not sophisticated, and that the attackers behind them have a history of running multiple botnets with a variety of tools and techniques," many of which, he says, were far more rudimentary than Google or the cybersecurity industry has portrayed."

People incorrectly assume that because of Google's popularity, brand and reputation for innovation, that Google is  secure and cutting edge on cyber-security -- when in reality they are not.

Don't miss The Onion's latest Google Privacy Satire -- its hilarious!

Click here to read The Onion's latest satire about  Google's privacy invasion problems. Its hilarious just like the Onion's other satire video on Google's "Opt-out Villiage."  

  • Why it is so poignant and funny scary is that Google has all this private information on everyone and is increasingly integrating it for real, just as this recent article from the Register shows. 

If you enjoy these satires, please check out more at the GoogleMonitor.com humor section. Enjoy! 

 

 

 

 

Key ACI study shows regulation is anti-innovation

Kudos to Larry Darby of the American Consumer Institute for his outstanding new study on the destructive effect of regulation on innovation. Please read it if you are at all interested in innovation.

The study debunks the views of some that government, regulation and regulators are somehow a font of innovation. 

After reviewing the relevant literature and evidence on the subject, Dr. Darby concluded that:

  • innovation is naturally flourishing without government involvement or micromanagement;
  • burdening broadband providers with new common carrier burdens would severely discourage innovation; and 
  • limiting innovation in one part of the ecosystem would ultimately diminish innovation in the entire Internet ecosystem.

At core, the new notion floated by some that more FCC regulation would encourage innovation is nonsensical and unsupported by any literature or evidence.

The big takeaway here is that new "Mother may I" regulations, which effectively require some market participants to get FCC approval for their innovations, in order to protect or advantage others' innovations, is not innovation policy. It is old-fashioned industrial policy where government picks market winners and losers. This is a policy approach long proven to grossly underperform market-based policies.

 

   

 

 

 

 

 

 

Title II reclassification: FCC can't redefine competition as monopoly without being arbitrary/capricious

The discussion at the Federalist Society about former U.S. Solicitor General Greg Garre's excellent legal analysis  (that the FCC does not have the legal authority to promulgate Internet traffic rules), surfaced what I believe to be yet another insurmountable barrier for the FCC to overcome -- beyond the litany of legal barriers outlined by Mr. Garre.

  • FCC reclassification of broadband as Title II common carriage would practically force the FCC to redefine competition in a way that would be arbitrary and capricious. 

Let me explain. 

Public Knowledge's Gigi Sohn laid out  the counter argument to Mr. Garre's analysis that the FCC could reclassify broadband as Title II by simply revisiting the basis for the FCC's 2002 decision and overturning it as wrong on three counts:

  1. Information services and telecommunications services are no longer necessarily intertwined;
  2. Facilities based competition has not arrived;
  3. Consumers are no longer protected. 

Ms. Sohn added this about what the FCC could do: "They just have to give a reasoned explanation. They don't actually have to show that the new decision was better than the old decision." -- per Washington Internet Daily.

FCC's non-technology-neutral proposals perversely promote discrimination -- per Phoenix Center report

George Ford of the Phoenix Center has penned another incisive analysis about the real world impact of net neutrality and the FCC's Proposed Open Internet regulations.

  • "Sabotaging Content Competition: Do Proposed Net Neutrality Regulations Promote Exclusion?" is an important read for anyone seeking a substantitve understanding of the impact of the FCC's proposed rules.
    • George Ford and Michael Stern's core conclusion: "...the proposed net neutrality rules of both the FCC and Congress... can actually promote such exclusionary behavior. That is, the incentive to monopolize is greater under net neutrality."

    The Phoenix Center's profound insight here got me thinking, (which is always my highest compliment) so let me share my takeaways building on their conclusion; takeaways that show why net neutrality is such an intellectually and economically bankrupt concept.

    • First, not only is net neutrality "a solution in search of a problem," but the FCC's proposed "solution" would make the net neutrality "problem" they allege worse than the status quo!

"Google does not reap the benefits of significant network effects" -- Google Antitrust Pinocchio Part V

"Google does not reap the benefits of significant network effects because its search algorithms are centered on the analysis of links, and operate essentially the same way whether one person or six billion are using it." -- said Randall Stross in his Digital Domain column today in the New York Times. 

  • While I enjoy Mr. Stross' weekly column and also enjoyed reading his book "Planet Google," the characterization above on "network effects" appears to be another significant antitrust misrepresentation coming from Google.
  • May I apologize upfront to Mr. Stross, if I am incorrectly assuming that he got fed this preposterous characterization of "network effects" from Google's antitrust Pinocchio squad that has given us:

Given that Mr. Stross' article is trying to make the case that Facebook has lots of network effects and "Google does not reap the benefits of significant network effects," it appears that Google is trying to spin a new antitrust defense tall tale that Google faces lots of competition from the likes of Facebook... to create some "reasonable doubt" for upcoming antitrust jury trials that Google is not a monopoly.

Has Google increased its China censorship? Doesn't that violate the Internet's First Amendment?

New research from Piper Jaffray suggests that Google actually may have increased its censorship by ~30% in China since Google grand-standed on the world stage in January pledging that it would no longer censor search results on China.cn.  

Per Business Week's Blog, Piper Jaffrey' analyst Gene Munster: 

Big Brother 2.0: Google-NSA through foreigners' eyes

Today's New York Times front page story "Google's computing power betters translation tool" by Miguel Helft spotlights that Google arguably owns and operates "the world's largest computer." The article quotes a Google  engineering VP explaining that Google's unparalleled computing power enables Google to "take approaches others can't even dream of."

Combine the world's largest computer, with the best automated translation capability for most all of the world's top languages, with reports from the front page of the Washington Post that Google proactively sought help from America's top spy agency, the NSA, for its cyber-security vulnerabilities, and it is not surprising that foreigners would be growing increasingly wary of Google and the extraordinary potential power that Google holds over them. 

So what do foreigners increasingly see Google doing?

First, they increasingly see "The United States of Google," a term Jeff Jarvis coined in his book on Google. Shortly after Google publicly accused the Chinese Government of being behind or complicit in the cyber-attacks on Google:

Must-see Australian clip: joining the dots on Google

Thanks to John Simpson's post at the ConsumerWatchdog.org, which flagged this succinct and illuminating 2 min 46 sec video "produced by Hungry Beast, a weekly news show on Australian television puts Internet giant Google's huge ambitions and gargantuan reach into dramatic perspective."

THE BEAST FILE: GOOGLE from Hungry Beast on Vimeo.

It is one of the best and most accessible pieces I have seen for the average person to get a better perspective on all things Google.

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Q&A One Pager Debunking Net Neutrality Myths