BREAK UP GOOGLE: There Is A Solid Conservative Antitrust Case Against Alphabet-Google

Scott Cleland | Chairman, NetCompetition

In a nutshell, the solid conservative antitrust case against Google is: information is power; power corrupts, and absolute power corrupts absolutely.

It’s hard to imagine a more harmful monopoly in a free market democracy than one with bottleneck control over the supply and demand for accessing the world’s digital information. That’s because the free flow of information and the competition of ideas are the lifeblood of both constitutional democracy and free market competition.

The solid conservative antitrust case against Google must start with the facts.

Antitrust is law enforcement. The government is limited. It must prove its case in court with facts, due process and the rule of law. Just like constitutional separation of powers is a backstop against political tyranny, antitrust law and free market competition serve as backstops against unaccountable market tyranny.

The last major antitrust act of the W. Bush Administration was to threaten a Sherman Act monopolization case against Google on November 5, 2008. It successfully blocked a proposed search ad partnership between #1 search provider Google, with 70% share, and #2 Yahoo, with 20% share.

Today Google has 94 percent of the mobile search market per Statista.

How did Google illegally extend its 70 perent dominance in the PC search market in 2008 to 94 percent of the mobile search market in 2018? Google required all device manufacturers and mobile carriers that used Google’s free Android operating system, to make Google Search the default search engine and to prominently pre-install and prioritize over a dozen Google apps. Now 16 of the top 20 Android apps are Google apps.

This Google tying behavior is very similar to the antitrust monopolization offense for which the DOJ convicted Microsoft in 2000. Microsoft had illegally required manufacturers that preinstalled its Windows operating system to also preinstall Explorer as the default browser.

Some defend Google by saying users can just use Bing or DuckDuckGo.

That’s a red herring. All Android and Apple devices, and most all U.S. websites or apps that have search capability, use Google Search as the outsourced search engine per Google contract. Bing indexes less than a quarter of information that Google does, and DuckDuckgo indexes much less than that.

In addition, Bing and DuckDuckGo can’t index some of the largest corpuses of digital information in the world. That’s because they are exclusive to Google. Examples include YouTube, Google Books, News, Earth, Maps and StreetView.

Some defend Google by implying free search to the user can’t be an antitrust violation because consumer welfare benefits so much from free search.

That is another red herring. Google search users are not the customer. They are the product sold to Google’s advertising customers, because they pay nothing measurable monetarily for using search. The real customers in this antitrust market are advertisers and publishers, because their payment and revenue from Google Search is measured monetarily. The Google antitrust problem is monopolization of paid search advertising, not free search.

Why would a conservative wish to extend antitrust enforcement into voluntary free activities, a form of indirect business charity and not a measurable economic form of commerce? If one does not limit antitrust enforcement to monetarily-measurable economic transactions, what would be a logical and common sense limiting principle to government antitrust intervention going forward?

Some defend Google by saying its dominance is temporary. In aggregating the world’s information and making it accessible, Google has an insurmountable $300 billion investment lead and a twenty-year time-to-market advantage.

Now consider how Google’s information power corrupts and Google’s information monopoly power corrupts absolutely.

Few know Google has a criminal record.

In a 2011 criminal forfeiture settlement with the DOJ, Google admitted to illegally facilitating the “unsafe and unlawful importation of prescription drugs” into the U.S. for several years. Google also agreed to disgorge $500 million in illegal advertising revenues from known illegal drug websites selling steroids and other illegal pharmaceuticals online. The Rhode Island U.S. Attorney, who led the Google criminal probe, said Google CEO “Larry Page knew what was going on.”

Some defend Google by saying that unlike the government Google does not have the coercive power of the police or the military. That defense naively presumes that Google’s monopoly power over information can’t be abused to corrupt the Government and use its police powers to favor Google and harm those who oppose Google.

Google evidently corrupted the U.S. antitrust law enforcement process.

In August 2012 after a year-long probe, the FTC Staff recommended antitrust prosecution of Google. Before the election, the FTC Chairman then signaled in the press that the FTC intended to bring an antitrust case against Google. After the 2012 Presidential election, Bloomberg reported that Google Chairman Schmidt was credited as “an under-appreciated asset” in the Obama Re-Elect Campaign.

On November 19, 2012, Renata Hesse, Google’s 2011 outside antitrust defense counsel who worked on shutting down Texas’ Google antitrust probe, was appointed Acting U.S. DOJ Assistant Attorney General for Antitrust.

Just 44 days later, on January 3, 2013, all five Google antitrust probes were closed. While four were closed with a vote, voluntary commitments, and explanations, the Android tying probe was silently closed without a vote.

In 2014, Google evidently corrupted the process of competition via collusion.

Google and Facebook, after fiercely competing against each other directly in search and social in 2012 and 2013, abruptly stopped competing directly in 2014. Google defunded Google+ and exited social advertising. Facebook exited its Graph Search partnership with the Bing-Yahoo platform, which was Google’s only search advertising competition.

Apparently Google and Facebook have illegally divided up the market and allocated customers. Google is specializing in lead generation, local business visibility, hard news, and jobs. Facebook is specializing in brand awareness, interactivity, and soft content like entertainment and lifestyle. The evident result has been their joint revenue share of digital ad growth has increased from ~67% to >100% digital ad growth from 2015-2017. These are telltale signs of illegal cartelization.

Google evidently corrupted the nation’s patent enforcement process.

In 2014, Google faced a phalanx of patent infringement lawsuits from several companies: Apple, Microsoft, Nokia, Blackberry, Ericsson, Sony, and Skyhook Wireless. In January 2014, Michelle Lee became Acting Director of the U.S. Patent and Trademark Office. Eighteen months prior, Ms. Lee served as Google’s Deputy General Counsel for Patents from 2003-2012. By 2015, all the companies suing Google for patent infringement settled or dropped their cases against Google-Android.

Today, Google is corrupting America’s democracy.

Congressional hearings this fall spotlighted how Google’s algorithms were easily corrupted with fake news and ads by foreign entities in the 2016 Presidential election.

Kudos to Daily Caller’s reporting that exposed “Google’s New Fact Check Feature Almost Exclusively Targets Conservative Sites.” And kudos to the Daily Caller for editorially challenging those in power who defend Google’s monopoly from the accountability of the free market competition of ideas.

Lastly, the solid conservative antitrust case against Google’s monopolization would be incomplete without spotlighting that it also is pro-growth and pro-job creation. Monopolization eliminates competitive choices and differentiation. The obvious result of Google eliminating multiple competitors in every monopolized information market or segment is less overall revenue, less economic growth, fewer jobs and a lack of innovation.

Unaccountable power corrupts; and unaccountable Googleopoly power corrupts surely.

Forewarned is forearmed.

Scott Cleland served as deputy U.S. coordinator for international communications and information policy in the George H. W. Bush Administration. He is president of Precursor LLC, an internetization consultancy for Fortune 500 companies (some of which are Google competitors) and chairman of NetCompetition, a pro-competition e-forum supported by broadband interests. He is also author of “Search & Destroy: Why You Can’t Trust Google Inc.” Cleland has testified before both the Senate and House antitrust subcommittees on Google.


The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.

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