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Wednesday, July 22, 2009 4:08 PM/EST

The Case for Why the DOJ Should See Google as an Antitrust Threat

Fred Vogelstein, the writer who painted Facebook as a competitive threat to Google in June in Wired, has written another long piece for the magazine that is sure to open eyes, or at the least, raise some eyebrows.

When I read the headline, "Why Is Obama's Top Antitrust Cop Gunning for Google?" this week, I expected a profile on Christine Varney, the former FTC attorney that President Barack Obama appointed head of the Justice Department's antitrust division in January, and who seems destined to go after Google.

I expected to read about Varney's chops when it comes to prosecuting cases, a chronicle of how she represented Netscape in the late 1990s, when she was "instrumental in painting Bill Gates and company as overeager bullies."

Instead, I read a four-page piece that compares Google's octopus-like approach to search and Web services (Google Apps, Android, Chrome and Chrome OS) to Microsoft's multifaceted presence in desktop software (Windows, Office, Windows Media Player, Internet Explorer). Vogelstein wrote:

Lawyers and economists say that things get complicated, though, when Google moves beyond search and into Web services like online spreadsheets and video sites. Because its search and advertising algorithms are secret, there is no way for competitors or partners to know whether Google tweaks results to direct traffic to its own properties over theirs... If Google is using its search position to promote its other businesses, that could leave it open to charges of illegal bundling and leveraging--the same charges that Microsoft faced for packaging its browser onto the Windows desktop.

This doesn't tell us anything new about Google for those who follow the market closely. It doesn't reveal a wizard behind a curtain as being up to something cunningly evil.

What it does do is paint a damning picture of a company that has accrued such sway over the search market that its sheer size is prohibitive for any entrant hoping to make a go of it in the business of organizing the world's information.

The piece is written in such a way that it will make some people scratch their head and say, Doesn't that company try to "don't be evil"? In that sense, the piece may eventually be used as one of the cornerstone articles in a federal indictment against Google.

ReadWriteWeb's Marshall Kirkpatrick wrote that the piece is important, and he's probably right. I believe this because it might be one of those bludgeons that Varney and her DOJ colleagues would wield against Google in future litigation, as Kirkpatrick noted: "Talk itself, though, could help build that case with the public before it's built in court."

To wit, I'll confess that when I first saw the headline of the piece--"Why Is Obama's Top Antitrust Cop Gunning for Google?"--the obvious answer that popped into my head was that Varney can make quite the name for herself as the legal eagle that spears Google, which has been a slippery fish for antitrust regulators.

When Varney told colleagues and peers at the ninth annual conference of the American Antitrust Institute in June 2008, "I think you are going to see a repeat of Microsoft," I read that as: "I see Google as my Microsoft."

That could spell big problems for Google. The top antitrust lawyer in the country has come out and basically said she thinks Google is becoming a monopolist.

Many steps brought us to this point. Off the top of my head, Google trod on thin ice when it bought DoubleClick, with privacy advocates complaining DoubleClick's technology would provide Google too much data on Web users.

The Google Book Search deal is under formal DOJ scrutiny, while Google CEO Eric Schmidt's position on Apple's board is in the FTC's crosshairs.

I've chronicled the perception-is-reality problem Google faces in trying to convince the public it has the best intentions. I've more recently questioned whether antitrust laws should be amended to consider Google's use of free Web services to undercut market rivals.

But kudos to Vogelstein, who does the best job I've read yet describing the fallout from Google's bid to partner with Yahoo. What a year ago seemed a bid to thwart Microsoft's attempt to get stronger in search advertising now reads like a crucial piece of evidence the DOJ could use in an antitrust case.

Indeed, the writer intimated that Google put a bull's-eye on its $20 billion-a-year chest when it tried to strike a search ad deal with Yahoo to stymie Microsoft:

Schmidt says today that if he had it to do over again, he would; indeed, it probably kept Yahoo out of the hands of Microsoft, which dropped its own bid soon after. But it will also have a lasting effect on Google. Any future deals of comparable size will inevitably draw the same kind of scrutiny. Schmidt had been so focused on renouncing Microsoft's behavior that he had led his company to the same fate: Google was now branded as a top antitrust target.

Vogelstein does offer Google an out, noting that Varney said the FTC took so long to tag Microsoft as a monopolist because it started too late: "In other words, even if an antitrust case is years away, the all-important political ground is being prepared right now. How Google responds will determine whether it can fend off years of intensive investigation..."

The question is: How will Google respond?

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Comments (8)

Keven :

So in other words, it's guilty until proven innocent?

There is no circumstantial evidence, let alone concrete evidence that Google would do such a thing.

It sounds more to me like a handful of people who are desperately doing what they can to further their own personal, professional and utterly selfish goals.

adam :

interesting, the same eyes were always closed if they looked Micrsoft

Lee :

I find it fascinating that the government appears to be setting up for an anti-trust case against Google (for which there is no evidence) while it turns a blind eye to IBM.

Try getting a license to run IBM software on anything but an IBM mainframe. You can't. I believe that the practice is called tying and was declared illegal years ago. There was even a consent decree issued that IBM no longer adheres to. If Varney really wants to make a name for herself, try taking on IBM. It'll be a much more interesting fight with concrete evidence and LOTS of politics.

Clint Boulton Author Profile Page:

Lee:

That's a fair point for sure, but let me try to answer why IBM gets the pass. From an economical and employment perspective, Big Blue is like old money on the East Coast. It's been around since the 19th century! It's power and reach into the infrastructure of our nation's companies is well known. Unless IBM does something egregious, it will continue to get a pass. That doesn't make it right.

Gary :

Gee whiz; do we really need lawyers in this? Haven't they screwed up enough other stuff? They'll just get it wrong, anyway.
g

Dennis :

If you believe the conspiracy theories about Google sharing data on searches / users / etc with the government over the years...this will just fade into the sunset eventually. If the conspiracy theory is true, why would they want to upset the cart full of warrentless information?

Byron :

I do not see the comparison between Microsoft and Google except that both have a large share of the market. However in some very key areas they are very different. Google is open and sharing, giving access to their technology for extension, and are helping to in many ways to allow others to develop better software and services. Microsoft does not open up unless forced, has done many things to hinder development, does not believe in standards, and is resistant to anything not invented by Microsoft. Until recently they were as closed as possible. They are opening up more because there is more competition. As an example, look at the whole Internet Explorer fiasco. There approach hurt the web and cost everyone a lot. And even now the latest is not that compliant to standards. If I had to pick either to disappear, I would gladly have Microsoft disappear. I could go on longer about the evil that is Microsoft.

I do worry about Google and the massive amount of data they have available to use. That is my concern that somehow they decide to use that information in "evil" ways.

It is interesting to see that when one pursues an aggressive line of research in an area that the Google management does not want the public exposed to, Google frequently responds with the following message.
===========================
"Google
Error
We're sorry...
... but your query looks similar to automated requests from a computer
virus or spyware application. To protect our users, we can't process your
request right now.

We'll restore your access as quickly as possible, so try again soon. In
the meantime, if you suspect that your computer or network has been
infected, you might want to run a virus checker or spyware remover to make
sure that your systems are free of viruses and other spurious software.

We apologize for the inconvenience,
and hope we'll see you again on Google."
====================
End of Google's automatic side tracking algorithm's reply.

Freedom, justice, and equity
cannot exist if a small group of people:
1. Control the repository of data.
2. Control who can access the data.
3. Control what data researchers are exposed to.
4. Features free top placed religious biased ads.

And what is more alarming is that Google not only controls the data repository, and who can access the data,and what data is presented to researchers,

but Google systematically censors (Bans) folks whose ideas and opinions Google does not want the public exposed to,

and implies that the ideas and opinions of
the people they target are tainted in some way.

Welcome to the Brave New World of Google!

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