Why Google Was Spared

30 Mar 2015 | Author: | No comments yet »

Google Blasts Media Implications That It Runs That Town.

Deputy NFL Commissioner Tom Brady and his chief of staff, Rob Gronkowski, OK a rule change that forgives the Patriots for illegally taping other teams and deflating football over the preceding years.

Google, a search company, fired back today at a string of reports published in the Wall Street Journal over the past few weeks that have brought the company and its business practices under scrutiny. Meanwhile, members of the Patriots continue to happily contribute funding for the commissioner’s new 45-room castle in Turks and Caicos, and Bill Belichick agrees to continue coaching the commissioner’s 12-year-old son in Pop Warner football. The collection of pieces implied that Google has decision-tilting influence in the federal government, and that the Federal Trade Commission (FTC) all but went against its own internal views of Google’s alleged anticompetitive behavior by not deciding to pursue legal action against the search company several years ago. But today, it admitted in a roundabout way just how deep its ties into the government go as it defended itself against claims it tampered with an FTC investigation back in 2012.

The now-dated case against Google came back to the forefront of technology news when the government accidentally leaked — by its own admission — part of an internal document this month arguing that the company had “unlawfully maintained its monopoly over general search” through several tactics. Photo: MARK WILSON/GETTY IMAGES When federal antitrust regulators probed the search-engine business three years ago, they found that Google Inc.’s domination of the field was even greater than they had thought. This is refreshing when another agency, the Federal Communications Commission, is guilty of unprecedented regulatory excess in deciding to micromanage the Internet like a monopoly utility.

This was reflected by the FTC, state attorneys general and courts in Germany and Brazil, all of which chose not to pursue antitrust suits against the company. Today, Google responded to some of the allegations in the piece, taking the time to clarify some of the points as well as to deflect attention to other companies. Rivals such as Microsoft lobbied hard for prosecution, but agency commissioners in 2013 declined, agreeing that big is not necessarily bad for consumers. Google, with a combination of sarcasm and moving-picture images, argued today that the FTC’s final vote and decision on its various “search allegations” were “in accord with the recommendations of the FTC’s Bureau of Competition, Bureau of Economics, and Office of General Counsel,” and that those recommendations were not, as the Journal published, “in contrast to the conclusion of the FTC’s commissioners.” The search giant also argued that the Journal overestimated the number of meetings that it had at the White House by counting former employees as active, among other corrections.

Taking issue with the figure of 230 appearances that the WSJ claims, Google senior vice president of communications and policy Rachel Whetstone says that 33 of the visits were by people not employed by Google at the time — so in other words, they weren’t representing Google. The document quoted Google’s chief economist, Hal Varian, saying that, from an antitrust perspective, he was happy that research firm comScore Inc. typically understated Google’s market share.

Google said many of the meetings at White House were not to discuss antitrust investigation but were for topics ranging from self-driving cars to cybersecurity. You can wargame in your mind as much as you want as to why the Journal is going after Google and the FTC, but it seems for now that when it comes to a particular bout of wrestling, the technology company is the happier pig. Competitors like Yelp had complained that Google search results were directly delivering travel and restaurant reviews, maintained by Google itself, rather than links to websites. Humorously, Google tries to imply that a bunch of those visits were for technical support, curiously saying that “over five” of its visits were for support of the administration’s botched Healthcare.gov launch. The FTC analysis acknowledged “the strong precompetitive justifications Google has set forth,” to wit: “Google’s course of conduct was premised on its desire to innovate and to produce a high-quality search product in the face of competition, blended with its desire to direct users to its own vertical offerings.” The lawyers added: “The evidence paints a complex portrait of a company working toward an overall goal of maintaining its market share by providing the best user experience, while simultaneously engaging in tactics that result in harm to many vertical competitors, and likely helped to entrench Google’s monopoly power over search and search advertising.” The FTC investigation was part of a trend involving Silicon Valley more deeply in Washington.

Lastly, Google says that it wasn’t visiting to discuss the anti-trust investigation — it was there to discuss a huge host of other concerns, including “patent reform, STEM education, self-driving cars, mental health, advertising, Internet censorship,” and a host of others. Microsoft Corp.’s Bing and Yahoo Inc., which relies on Bing, had a combined 23% U.S. share on personal computers in February, estimated StatCounter.

Those figures include only “general” searches, excluding searches for products on Amazon.com Inc. or local-business information on Yelp Inc., for example. Meanwhile, Congress has grilled FCC Chairman Tom Wheeler at five hearings about why his supposedly independent agency suddenly reversed course when Mr. Obama lieutenant David Plouffe boasts: “On Election Night [Schmidt] was in our boiler room in Chicago,” he told Bloomberg News, in a story that revealed that for the campaign Schmidt “helped recruit talent, choose technology and coach the campaign manager, Jim Messina, on the finer points of leading a large organization.” Schmidt was especially fond of a madcap corner of the Obama campaign office known as “the Cave,” where, at 4:30 every day, staffers would dance madly under a disco ball to the tune of a mashup of Psy’s “Gangnam Style” and an automated campaign phone call made to prospective voters.

Obama demanded that the Internet come under a law from the 1930s empowering regulators to decide what is “just and reasonable.” The FTC doesn’t want to get stained by Mr. Google Chairman Eric Schmidt met with Pete Rouse, a senior adviser to President Barack Obama, in the White House.” The documents don’t show exactly what was discussed in late 2012. Google lobbyists have been pushing for implementation of “net neutrality” regulations, particularly a “Title II” provision that would benefit Google. Google’s large lead in searches also gives the company an advantage in search advertising, scooping up around four-fifths of advertisers’ search-engine marketing budgets, according to industry players. In the report, the FTC staff said Google was best positioned to provide “the ‘right’ ad for the ‘right’ user at the ‘right’ time.” As a result, website operators that want to provide search-based ads on their own sites prefer to work with Google.

Right before the FCC report was due, but before it was made public, the FCC pulled another odd reversal, removing 15 pages of policy Google apparently found out about but didn’t like. FTC staffers found evidence that Google used its dominant position to raise prices “with apparent impunity” on websites that published its search ads.

FCC Commissioner Ajit Pai said that the changes came about after “a last-minute submission from a major California based company.” I wonder which company he’s talking about. The social network’s share of world-wide digital advertising revenue doubled to 8% between 2011 and 2014, according to research firm eMarketer, a period when Google’s share fell from 33% to 31%.

Even moving information off the first page of search results would effectively neutralize it: According to a 2013 study, 91.5 percent of Google search users click through on a first-page result. Google’s idea of ranking results based on truth is an excellent one that it should implement just as soon as it comes up with an absolutely, unbiased and objective system of determining truth. Other apps help smartphone users bypass Google for lucrative searches, using Amazon to search for products or Priceline to book a hotel room, for example. Google is a big player in mobile through its Android mobile-operating system, which ran about 80% of the smartphones shipped in 2014, estimates Strategy Analytics.

The company’s tactics, particularly the agreements that Google signs with smartphone makers, have piqued the interest of antitrust regulators in Europe. Those deals have required device makers to install a range of Google’s less popular apps and to set some Google services like search as defaults in order to gain access to more popular apps like Google Maps and the Play Store digital bazaar, where users can download more than a million other apps and games.

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