EXPOSED: Google, Obama caught doing it once a week

26 Mar 2015 | Author: | No comments yet »

Capital Journal Daybreak: Google’s White House Ties | U.S. Boosts Tikrit Role | House Moves on Budget.

The FTC’s main charge against Google was that it was abusing its power by unfairly promoting its own vertical offerings at the expense of competitors. Google had access to top-ranking White House staff far outside the norm in 2012, while the company was the subject of an antitrust investigation by the Federal Trade Commission, White House visitor logs and emails obtained by The Wall Street Journal show.Google executives have met with White House officials an average of once a week since US President Barack Obama took office in 2009, according to a new report.

Google is a powerful company and its global clout is certainly reflected in Washington where it has a talent for getting in the room with important government officials. Those meetings included discussions between Google co-founder Larry Page, Google Chairman Eric Schmidt, chief Google lobbyist Johanna Shelton, Google General Counsel Kent Walker and Google’s chief legal officer David Drummond. The Internet giant’s access is gaining fresh relevance as scrutiny grows over how the company avoided being hit by a potentially damaging antitrust lawsuit. The subsequent report concluded the company’s actions “resulted — and will result — in real harm to consumers and to innovation,” and “significant harm” to Google’s competitors. (RELATED: This Is Why The FTC Wanted To Sue Google For Anticompetitiveness) Despite the report’s recommendation that the FTC file a lawsuit against Google for the violations, which would have been the highest-profile since the one that broke up Microsoft in the ’90s, all five FTC commissioners eventually voted against the suit after Google agreed to some concessions.

Other reports detailing administration’s relationship with Google have surfaced routinely in years past, and WikiLeaks publisher Julian Assange writing a book on the corporation’s ties with the US government in 2014. “Nobody wants to acknowledge that Google has grown big and bad,” Assange wrote. “But it has.” The tenure of its former CEO, Eric Schmidt, “saw Google integrate with the shadiest of US power structures as it expanded into a geographically invasive megacorporation,” Assange wrote. During the 2012 election cycle, Google became the second-largest donor to President Obama, and on election night in November, Schmidt personally oversaw custom voter-turnout software for the president. Nevertheless, the latest report of Google infiltration of the White House raises new questions about that alliance, given the timing and frequency of the meetings uncovered by the Journal.

U.S. officials say the government will stop collecting bulk domestic phone records if the Congress fails to extend a law authorizing the spying, Mark Hosenball at Reuters reports. When the FTC announced its Google settlement over complaints brought by Microsoft, eBay, Yelp, and others, was it going against its staff’s recommendations? According to Mullins, Obama has mentioned the company in half of his annual State of the Union addresses, including the one he gave this past January when he hailed the company as a job creator. A discrimination suit against venture capitalist firm Kleiner Perkins Caufield & Byers by former employee Ellen Pao is wrapping up — and the Switch is here to explain it before a verdict comes down.

Are the loudest Google critics, like original complainants Microsoft and Yelp, just expressing sour grapes, or did the FTC cave on real anti-competition issues? Schmidt, the former CEO who has since joined several White House advisory panels, “was personally overseeing a voter-turnout software system” for Obama on the night of the president’s re-election in November 2012—two months before the FTC ended its probe—according to Mullins.

WATCH: A House Energy and Commerce Committee’s subcommittee will mark-up data breach legislation at noon and FCC Chairman Tom Wheeler will testify at a House Judiciary Committee hearing on net neutrality at 2 p.m. The Journal broke the news last night that private-equity firm 3G Capital Partners was in advanced talks to buy Kraft, and the deal was announced this morning.

The big question for the 2016 presidential campaign is whether small-donor fundraising — particularly email solicitations — can counterbalance the vast sums of money being raised through outside groups and at high-dollar fundraising events. The Journal identified four issues over which the FTC found evidence of anti-competitive business practices by Google. (Disclosure: I used to work for Google and Microsoft, and my wife still works for Google. I did not work on anything related to these four issues.) Only with one is there a substantive difference between the FTC staff report and the FTC’s previous public statements.

AFTER MUCH JOCKEYING, HOUSE GOP SET TO PASS BUDGET: House Republicans will consider their 2016 budget today, in a test of the GOP leadership’s ability to strike a balance between dueling defense and deficit hawks. This is the “exclusive agreements” issue, dealing with Google’s contractual restrictions on companies like Amazon that syndicated Google’s search results. Kraft had a market value of roughly $37 billion before news of the deal. 3G already owns fast-food giant Burger King and last year acquired Tim Hortons, the Canadian chain. While one FTC commissioner publicly wrote that there was no evidence of coercion because “virtually none of Google’s partners are seeking to switch any of their business to non-Google providers”—an assertion the report backs—the report nevertheless claims to have found Google’s contracts unlawful, if resulting in “only modest anticompetitive effects.” The report recommends a remedy for this issue on Page 113; unfortunately, only the even-numbered pages of the report were accidentally released to the Journal.

While this issue is less major than the other three issues, the FTC should still clarify its official stance on exclusive agreements and why it apparently chose not to pursue a remedy. University of Maryland professor and Internet law expert James Grimmelmann, author of “The Google Dilemma,” found little surprising in the report: “It focused on exactly the same issues—search bias, vertical search, and ad campaign portability—that were widely debated in public during the investigation.” Broadly speaking, the remaining three issues line up with what the FTC publicly reported about its settlement with Google in January 2013, and, indeed, what the Journal itself reported on the settlement at the time.

SURVEILLANCE PLANES AID FIGHT BY IRAQ, IRANIAN-BACKED MILITANTS FOR TIKRIT: The U.S. has started providing Iraq with aerial intelligence in the stalled battle to oust Islamic State from Tikrit, drawing the American military into closer coordination with Iranian-backed militias spearheading the offensive. Haltern am See, a small German town near the Dutch border, is mourning the loss of 16 teenagers and two teachers who had been returning home from a class trip to Spain. “This is the darkest day in the history of our town,” said the mayor. But the intelligence will be used to help some 20,000 Iranian-backed Shiite militia fighters who make up the bulk of the force that has been struggling for weeks to retake the strategic city. First, it allowed advertisers to optimize campaigns across multiple ad networks simultaneously by removing restrictions on the use of its AdWords API.

And the tragedy presents the latest challenge for Germanwings’ parent company, Deutsche Lufthansa, which has been grappling with labor unrest, rising competition and management changes in recent years. A company like Yelp originally had no choice but to let Google use its data in those verticals; its only other option was to not be included in Google search results at all. SLOWS PACE OF AFGHAN TROOP WITHDRAWAL: President Obama delayed the planned departure of nearly half the remaining U.S. troops in Afghanistan, extending a military presence that he hopes will prevent a repeat of Iraq, where American forces left only to return last year. A typical female pattern is to order a healthy, vegetable-centric entree and then splurge on dessert, while men often favor more-substantial entrees featuring starch and meat, notes one expert.

For example, the pastry chef at Rancho Bernardo Inn, a boutique hotel in San Diego, says she introduced flavors reminiscent of childhood—peanut butter, caramelized popcorn, brownies—to help make desserts with appeal to men. Obama said the dynamic in Iraq—where Islamic State militants seized territory—had influenced his thinking as he recalibrated the timetable in Afghanistan. On this issue of search bias, Google did not make concessions, and the FTC did not take action (nor does the staff report recommend action, though it says it’s a “close call”).

It’s not an exaggeration to say this issue gets at the heart of Google’s search engine: To what extent can Google push its own aggregated content into its searches, if these offerings are in competition with businesses that show up in the search results? OBAMA SEES NO MIDEAST PEACE DEAL DURING HIS TERM: President Obama, citing conflicting comments in the past week from Israeli Prime Minister Benjamin Netanyahu, predicted that there would be no peace agreement between the Israelis and Palestinians during the remainder of his time in office. Because Google is the ultimate arbiter of the results it displays—and because its “relevance”-ranking algorithms are more or less a black box to anyone outside the company (and many within it)—Google’s responsibility has to be what the company itself has said many times: to provide the best search results for the user rather than search results that might privilege its business.

Obama put a firm end to one of the top foreign-policy goals of his second term: a Middle East peace deal that includes the creation of a Palestinian state. The question—as Grimmelmann put it in the article “What to Do About Google?”—is whether Google was acting in bad faith, fiddling with its search results with the ulterior motive of harming its competitors. But before the former Florida governor announces his haul, possibly in April, opponents are trying to turn his fundraising prowess and political pedigree into liabilities. French search helicopters Wednesday ferried police officers and emergency personnel to the area where an Airbus A320 slammed into the French Alps leaving all 150 aboard feared dead, as authorities said a recovered black box was damaged but its vital data could be analyzed, pointing to an early break in the investigation into what caused the crash. The evidence did not demonstrate that Google’s actions in this area stifled competition in violation of U.S. law.” You can see, however, why Yelp, TripAdvisor, and others originally complained to the FTC: If Google privileged its verticals in its results over your own sites, you’d want to be sure no fishy business was going on.

In Detroit’s labor negotiations, generous health-care benefits for about 135,000 unionized auto-factory workers are at risk of being cut to prepare for the Affordable Care Act’s “Cadillac” tax. American universities are enrolling unprecedented numbers of foreign students, prompted by the rise of an affluent class in China and generous scholarships offered by oil-rich Gulf states such as Saudi Arabia. John Kasich is thinking about running for president, but he faces a question: In the crowded field of Republicans preparing to run, is there room for one more? The White House’s pick to take the No. 2 spot at the Justice Department fielded mostly friendly questions at her confirmation hearing, while the political standoff over the next attorney general looks to stretch into at least next month.

Broadly speaking, however, I tend to agree with Search Engine Land’s Danny Sullivan when he says that Google’s Android mobile platform is of significantly greater concern than Google’s search engine. (Google Plus also would also have been a concern had it not utterly failed, since it locks users into a social network and user account.) Consumers are bolted into the Android platform to a far greater extent than they are to a search engine, and Ron Amadeo’s report in Ars Technica on the increasingly closed nature of the Android platform points at some real problems. As the administration turns its focus to revamping the way doctors and health systems are paid, he is expected to say that paying doctors, hospitals and other providers based on coordinated and improved care rather than treatment volume will mean healthier patients and lower U.S. health-care spending. CONGRESS: Afghanistan’s President Ashraf Ghani will address a joint session of Congress at 10:45 a.m. … The House will consider its 2016 budget late in the day … The Senate Banking Committee holds a hearing on the Dodd-Frank law’s process for pulling in risky financial firms for stricter oversight. SUPREME COURT: The Court considers an industry challenge to EPA air-pollution regulations limiting mercury emissions from coal- and oil-fired power plants. By continuing to support a route to citizenship for at least some illegal immigrants, Jeb Bush will test “whether support for comprehensive immigration reform that includes a pathway to citizenship is a poison pill in the GOP primary,” writes Ronald Brownstein in National Journal.

He would rather sit at his desk, placing calls to donors or studying spreadsheets, than be seen with the candidate at her latest fundraiser,” writes Ruby Cramer of BuzzFeed. A big part of Vice President Joe Biden would still like to run for president, writes the Los Angeles Times’ Doyle McManus, but Biden can’t escape the fact that he is Hillary Clinton’s “understudy — the backup player, there to step in only if the first string falters.” The New Yorker’s George Packer chronicles a Moscow meeting of the International Russian Conservative Forum, a gathering of “fringe political characters from Germany, Italy, Britain, the U.S., and other countries” who gathered to express support for Vladimir Putin and his assault on Ukraine. In the WSJ’s Think Tank, Jim Manley writes that a series of budget deadlines just ahead may finally be forcing Congress to get beyond governing by crisis and do some business in an orderly manner.

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