#Monopoly and antitrust

[uniqueeval]

Google's 2.4 billion euro fine upheld by Europe's top court

The European Union flag is seen with Google’s logo. Jaap Arriens | NurPhoto | Getty Images Europe’s top court on Tuesday upheld a 2.4 billion euro ($2.65 billion) fine imposed on Google for abusing its dominant position by favoring its own shopping comparison service. CNBC has reached out to Google for comment. The fine stems from an antitrust investigation by the European Commission, the…

[destiel-news-network]

(Source)

[consolecadet]

Big news: Google has lost its first antitrust case. Via Matt Stoller:

So what happens now? In this case, the judge will come up with remedies next year. The order could be broad, and will likely loosen Google’s control over the mobile app ecosystem. Google has already announced that it will appeal, so the case isn’t over.

That said, Google is likely to be in trouble now, because it is facing multiple antitrust cases, and these kinds of decisions have a bandwagon effect. The precedent is set, in every case going forward the firm will now be seen as presumed guilty, since a jury found Google has violated antitrust laws. Judges are cautious, and are generally afraid of being the first to make a precedent-setting decision. Now they won’t have to. In fact, judges and juries will now have to find a reason to rule for Google. If, say, Judge Amit Mehta in D.C., facing a very similar fact-pattern, chooses to let Google off the hook, well, he’ll look pretty bad.

[reasonsforhope]

Article | Paywall Free

"A bid to break up Alphabet Inc.’s Google is one of the options being considered by the Justice Department after a landmark court ruling found that the company monopolized the online search market, according to people with knowledge of the deliberations.

The move would be Washington’s first push to dismantle a company for illegal monopolization since unsuccessful efforts to break up Microsoft Corp. two decades ago. Less severe options include forcing Google to share more data with competitors and measures to prevent it from gaining an unfair advantage in AI products, said the people, who asked not to be identified discussing private conversations.

Regardless, the government will likely seek a ban on the type of exclusive contracts that were at the center of its case against Google. If the Justice Department pushes ahead with a breakup plan, the most likely units for divestment are the Android operating system and Google’s web browser Chrome, said the people. Officials are also looking at trying to force a possible sale of AdWords, the platform the company uses to sell text advertising, one of the people said.

The Justice Department discussions have intensified in the wake of Judge Amit Mehta’s Aug. 5 ruling that Google illegally monopolized the markets of online search and search text ads. Google has said it will appeal that decision, but Mehta has ordered both sides to begin plans for the second phase of the case, which will involve the government’s proposals for restoring competition, including a possible breakup request.

The US plan will need to be accepted by Mehta, who would direct the company to comply. A forced breakup of Google would be the biggest of a US company since AT&T was dismantled in the 1980s."

-via Bloomberg, August 13, 2024

[mostlysignssomeportents]

The Google antitrust remedy should extinguish surveillance, not democratize it

I'm coming to DEFCON! On FRIDAY (Aug 9), I'm emceeing the EFF POKER TOURNAMENT (noon at the Horseshoe Poker Room), and appearing on the BRICKED AND ABANDONED panel (5PM, LVCC - L1 - HW1–11–01). On SATURDAY (Aug 10), I'm giving a keynote called "DISENSHITTIFY OR DIE! How hackers can seize the means of computation and build a new, good internet that is hardened against our asshole bosses' insatiable horniness for enshittification" (noon, LVCC - L1 - HW1–11–01).

If you are even slightly plugged into the doings and goings on in this tired old world of ours, then you have heard that Google has lost its antitrust case against the DOJ Antitrust Division, and is now an official, no-foolin', convicted monopolist.

This is huge. Epochal. The DOJ, under the leadership of the fire-breathing trustbuster Jonathan Kanter, has done something that was inconceivable four years ago when he was appointed. On Kanter's first day on the job as head of the Antitrust Division, he addressed his gathered prosecutors and asked them to raise their hands if they'd never lost a case.

It was a canny trap. As the proud, victorious DOJ lawyers thrust their arms into the air, Kanter quoted James Comey, who did the same thing on his first day on the job as DA for the Southern District of New York: "You people are the chickenshit club." A federal prosecutor who never loses a case is a prosecutor who only goes after easy targets, and leave the worst offenders (who can mount a serious defense) unscathed.

Under Kanter, the Antitrust Division has been anything but a Chickenshit Club. They've gone after the biggest game, the hardest targets, and with Google, they bagged the hardest target of all.

Again: this is huge:

https://www.thebignewsletter.com/p/boom-judge-rules-google-is-a-monopolist

But also: this is just the start.

Now that Google is convicted, the court needs to decide what to do about it. Courts have lots of leeway when it comes to addressing a finding of lawbreaking. They can impose "conduct remedies" ("don't do that anymore"). These are generally considered weaksauce, because they're hard to administer. When you tell a company like Google to stop doing something, you need to expend a lot of energy to make sure they're following orders. Conduct remedies are as much a punishment for the government (which has to spend millions closely observing the company to ensure compliance) as they are for the firms involved.

But the court could also order Google to stop doing certain things. For example, since the ruling finds that Google illegally maintained its monopoly by paying other entities – Apple, Mozilla, Samsung, AT&T, etc – to be the default search, the court could order them to stop doing that. At the very least, that's a lot easier to monitor.

The big guns, though are the structural remedies. The court could order Google to sell off parts of its business, like its ad-tech stack, through which it represents both buyers and sellers in a marketplace it owns, and with whom it competes as a buyer and a seller. There's already proposed, bipartisan legislation to do this (how bipartisan? Its two main co-sponsors are Ted Cruz and Elizabeth Warren!):

https://pluralistic.net/2023/05/25/structural-separation/#america-act

All of these things, and more, are on the table:

https://www.wired.com/story/google-search-monopoly-judge-amit-mehta-options/

We'll get a better sense of what the judge is likely to order in the fall, but the case could drag out for quite some time, as Google appeals the verdict, then tries for the Supreme Court, then appeals the remedy, and so on and so on. Dragging things out in the hopes of running out the clock is a time-honored tradition in tech antitrust. IBM dragged out its antitrust appeals for 12 years, from 1970 to 1982 (they called it "Antitrust's Vietnam"). This is an expensive gambit: IBM outspent the entire DOJ Antitrust Division for 12 consecutive years, hiring more lawyers to fight the DOJ than the DOJ employed to run all of its antitrust enforcement, nationwide. But it worked. IBM hung in there until Reagan got elected and ordered his AG to drop the case.

This is the same trick Microsoft pulled in the nineties. The case went to trial in 1998, and Microsoft lost in 1999. They appealed, and dragged out the proceedings until GW Bush stole the presidency in 2000 and dropped the case in 2001.

I am 100% certain that there are lawyers at Google thinking about this: "OK, say we put a few hundred million behind Trump-affiliated PACs, wait until he's president, have a little meeting with Attorney General Andrew Tate, and convince him to drop the case. Worked for IBM, worked for Microsoft, it'll work for us. And it'll be a bargain."

That's one way things could go wrong, but it's hardly the only way. In his ruling, Judge Mehta rejected the DOJ's argument that in illegally creating and maintaining its monopoly, Google harmed its users' privacy by foreclosing on the possibility of a rival that didn't rely on commercial surveillance.

The judge repeats some of the most cherished and absurd canards of the marketing industry, like the idea that people actually like advertisements, provided that they're relevant, so spying on people is actually doing them a favor by making it easier to target the right ads to them.

First of all, this is just obvious self-serving rubbish that the advertising industry has been repeating since the days when it was waging a massive campaign against the TV remote on the grounds that people would "steal" TV by changing the channel when the ads came on. If "relevant" advertising was so great, then no one would reach for the remote – or better still, they'd change the channel when the show came back on, looking for more ads. People don't like advertising. And they hate "relevant" advertising that targets their private behaviors and views. They find it creepy.

Remember when Apple offered users a one-click opt-out from Facebook spying, the most sophisticated commercial surveillance system in human history, whose entire purpose was to deliver "relevant" advertising? More than 96% of Apple's customers opted out of surveillance. Even the most Hayek-pilled economist has to admit that this is a a hell of a "revealed preference." People don't want "relevant" advertising. Period.

The judge's credulous repetition of this obvious nonsense is doubly disturbing in light of the nature of the monopoly charge against Google – that the company had monopolized the advertising market.

Don't get me wrong: Google has monopolized the advertising market. They operate a "full stack" ad-tech shop. By controlling the tools that sellers and buyers use, and the marketplace where they use them, Google steals billions from advertisers and publishers. And that's before you factor in Jedi Blue, the illegal collusive arrangement the company has with Facebook, by which they carved up the market to increase their profits, gouge advertisers, starve publishers, and keep out smaller rivals:

https://en.wikipedia.org/wiki/Jedi_Blue

One effect of Google's monopoly power is a global privacy crisis. In regions with strong privacy laws (like the EU), Google uses flags of convenience (looking at you, Ireland) to break the law with impunity:

https://pluralistic.net/2023/05/15/finnegans-snooze/#dirty-old-town

In the rest of the world, Google works with other members of the surveillance cartel to prevent the passage of privacy laws. That's why the USA hasn't had a new federal privacy law since 1988, when Congress acted to ban video-store clerks from telling newspaper reporters about the VHS cassettes you took home:

https://en.wikipedia.org/wiki/Video_Privacy_Protection_Act

The lack of privacy law and privacy enforcement means that Google can inflict untold privacy harms on billions of people around the world. Everything we do, everywhere we go online and offline, every relationship we have, everything we buy and say and do – it's all collected and stored and mined and used against us. The immediate harm here is the haunting sense that you are always under observation, a violation of your fundamental human rights that prevents you from ever being your authentic self:

https://www.theguardian.com/technology/blog/2013/jun/14/nsa-prism

The harms of surveillance aren't merely spiritual and psychological – they're material and immediate. The commercial surveillance industry provides the raw feedstock for a parade of horribles, from stalkers and bounty hunters turning up on their targets' front doors to cops rounding up demonstrators with location data from their phones to identity thieves tricking their marks by using leaked or purchased private information as convincers:

https://pluralistic.net/2023/12/06/privacy-first/#but-not-just-privacy

The problem with Google's monopolization of the surveillance business model is that they're spying on us. But for a certain kind of competition wonk, the problem is that Google is monopolizing the violation of our human rights, and we need to use competition law to "democratize" commercial surveillance.

This is deeply perverse, but it represents a central split in competition theory. Some trustbusters fetishize competition for its own sake, on the theory that it makes companies better and more efficient. But there are some things we don't want companies to be better at, like violating our human rights. We want to ban human rights violations, not improve them.

For other trustbusters – like me – the point of competition enforcement isn't merely to make companies offer better products, it's to make companies small enough to hold account through the enforcement of democratic laws. I want to break – and break up – Google because I want to end its ability to bigfoot privacy law so that we can finally root out the cancer of commercial surveillance. I don't want to make Google smaller so that other surveillance companies can get in on the game.

There is a real danger that this could emerge from this decision, and that's a danger we need to guard against. Last month, Google shocked the technical world by announcing that it would not follow through on its years-long promise to kill third-party cookies, one of the most pernicious and dangerous tools of commercial surveillance. The reason for this volte-face appears to be concern that the EU would view killing third-party cookies as anticompetitive, since Google intended to maintain commercial surveillance using its Orwellian "Privacy Sandbox" technology in Chrome, with the effect that everyone except Google would find it harder to spy on us as we used the internet:

https://www.thebignewsletter.com/p/googles-trail-of-crumbs

It's true! This is anticompetitive. But the answer isn't to preserve the universal power of tech companies large and small to violate our human rights – it's to ban everyone, especially Google, from spying on us!

This current in competition law is still on the fringe, but the Google case – which finds the company illegally dominating surveillance advertising, but rejects the idea that surveillance is itself a harm – offers an opportunity for this bad idea to go from the fringe to the center.

If that happens, look out.

Take "attribution," an obscure bit of ad-tech jargon disguising a jaw-droppingly terrible practice. "Attribution" is when an ad-tech company shows you an ad, and then follows you everywhere you go, monitoring everything you do, to determine whether the ad convinced you to buy something. I mean that literally: they're combining location data generated by your phone and captured by Bluetooth and wifi receivers with data from your credit card to follow you everywhere and log everything, so that they can prove to a merchant that you bought something.

This is unspeakably grotesque. It should be illegal. In many parts of the world, it is illegal, but it is so lucrative that monopolists like Google can buy off the enforcers and get away with it. What's more, only the very largest corporations have the resources to surveil you so closely and invasively that they can perform this "service."

But again, some competition wonks look at this situation and say, "Well, that's not right, we need to make sure that everyone can do attribution." This was a (completely mad) premise in the (otherwise very good) 2020 Competition and Markets Authority market-study on "Online platforms and digital advertising":

https://assets.publishing.service.gov.uk/media/5fa557668fa8f5788db46efc/Final_report_Digital_ALT_TEXT.pdf

This (again, otherwise sensible) document veers completely off the rails whenever the subject of attribution comes up. At one point, the authors propose that the law should allow corporations to spy on people who opt out of commercial surveillance, provided that this spying is undertaken for the sole purpose of attribution.

But it gets even worse: by the end of the document, the authors propose a "user ID intervention" to give every Briton a permanent, government-issued advertising identifier to make it easier for smaller companies to do attribution.

Look, I understand why advertisers like attribution and are willing to preferentially take their business to companies that can perform it. But the fact that merchants want to be able to peer into every corner of our lives to figure out how well their ads are performing is no basis for permitting them to do so – much less intervening in the market to make it even easier so more commercial snoops can get their noses in our business!

This is an idea that keeps popping up, like in this editorial by a UK lawyer, where he proposes fixing "Google's dominance of online advertising" by making it possible for everyone to track us using the commercial surveillance identifiers created and monopolized by the ad-tech duopoly and the mobile tech duopoly:

https://www.thesling.org/what-to-do-about-googles-dominance-of-online-advertising/

Those companies are doing something rotten. In dominating ads, they have stolen billions from publishers and advertisers. Then they used those billions to capture our democratic process and ensure that our human rights weren't being defended as they plundered our private data and put us in harm's way.

Advertising will adapt. The marketing bros know this is coming. They're already discussing how to live in a world where you can't measure clicks and you can't attribute actions (e.g. the world from the first advertisements up until the early 2000s):

https://sparktoro.com/blog/attribution-is-dying-clicks-are-dying-marketing-is-going-back-to-the-20th-century/

An equitable solution to Google's monopoly will not run though our right to privacy. We don't solve the Google monopoly by creating competition in surveillance. The reason to get rid of Google's monopoly is to make it easier to end surveillance.

If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

https://pluralistic.net/2024/08/07/revealed-preferences/#extinguish-v-improve

Image: Cryteria (modified) https://commons.wikimedia.org/wiki/File:HAL9000.svg

CC BY 3.0 https://creativecommons.org/licenses/by/3.0/deed.en

[datamined]

UH OH Google just lost an antitrust case!

“A federal U.S. judge ruled Monday that Google has illegally held a monopoly in two market areas: search and text advertising.

The landmark case from the government, filed in 2020, alleged that Google has kept its share of the general search market by creating strong barriers to entry and a feedback loop that sustained its dominance. The court found that Google violated Section 2 of the Sherman Act, which outlaws monopolies.

The ruling marks the first anti-monopoly decision against a tech company in decades.”

Article by Rohan Goswami and Jennifer Elias

[reportwire]

Meta hits back in fight with FTC over VR company acquisition

Meta hits back in fight with FTC over VR company acquisition

WASHINGTON — Federal regulators and Facebook parent Meta are battling over Meta’s proposed acquisition of virtual-reality company Within Unlimited and its fitness app Supernatural. In a landmark legal challenge to a Big Tech merger, the Federal Trade Commission is suing to block the deal, asserting it would hurt competition and violate antitrust laws. Meta struck back Thursday, asking a federal…

[airyairyaucontraire]

[probablyasocialecologist]

Microsoft Corp.’s $69 billion takeover of Activision Blizzard Inc. suffered a hammer blow after Britain’s antitrust watchdog vetoed the gaming industry’s biggest ever deal, saying it would harm competition in cloud gaming.

The Competition and Markets Authority said its concerns couldn’t be solved by remedies such as the sale of blockbuster title Call of Duty or so-called behavioral remedies involving promises to permit rivals to offer the game on their platforms, according to a statement Wednesday.

Pressure had been mounting on Microsoft as it lobbies at home and in Europe to convince watchdogs to clear the deal — one of the 30 biggest acquisitions of all time. Crucially, the CMA’s conclusions comes before decisions from the European Union and the US Federal Trade Commission, which is awaiting a hearing in the summer after formally suing to veto the transaction.

“Microsoft already enjoys a powerful position and head start over other competitors in cloud gaming and this deal would strengthen that advantage giving it the ability to undermine new and innovative competitors,” Martin Coleman, chair of the independent panel of experts conducting this investigation, said.

The CMA took a view that the merger could result in higher prices, fewer choices and less innovation for UK gamers.

[follow-up-news]

Google has violated US antitrust law with its search business, a federal judge ruled Monday, handing the tech giant a staggering court defeat with the potential to reshape how millions of Americans get information online and to upend decades of dominance. “After having carefully considered and weighed the witness testimony and evidence, the court reaches the following conclusion: Google is a monopolist, and it has acted as one to maintain its monopoly,” US District Judge Amit Mehta wrote in Monday’s opinion. “It has violated Section 2 of the Sherman Act.” The decision by the US District Court for the District of Columbia is a stunning rebuke of Google’s oldest and most important business. The company has spent tens of billions of dollars on exclusive contracts to secure a dominant position as the world’s default search provider on smartphones and web browsers. Those contracts have given it the scale to block out would-be rivals such as Microsoft’s Bing and DuckDuckGo, the US government alleged in a historic antitrust lawsuit filed during the Trump administration.

[justinspoliticalcorner]

Niket Nishant at Reuters, via NewsNation:

(Reuters) — The U.S. Justice Department and a group of 30 states and the District of Columbia Thursday sued to break up Live Nation LYV.N, arguing the big concert promoter and its Ticketmaster unit illegally inflated concert ticket prices and hurt artists. “It is time to break up Live Nation,” said U.S. Attorney General Merrick Garland.

Concert fans and politicians for years have been calling for a re-examination of Live Nation’s purchase of Ticketmaster in 2010, especially after the ticket seller in 2022 botched sales to Taylor Swift’s first concert tour in years, sending fans into hours-long online queues, charging prices that customers said were too high and drawing charges of poor service. Thursday’s legal action underscores the aggressive approach President Joe Biden’s antitrust enforcers have adopted as they seek to create more competition in a wide range of industries, from Big Tech to healthcare to groceries. “Live Nation relies on unlawful, anticompetitive conduct to exercise its monopolistic control over the live events industry in the United States at the cost of fans, artists, smaller promoters, and venue operators,” Garland said, adding that as a result fans pay more in fees, artists have fewer opportunities to perform and smaller promoters get squeezed out.

The DOJ is suing to break up the Live Nation-Ticketmaster monopoly.

[thatstormygeek]

I think most people characterize a monopoly as kind of an economic thing or, you know, just a commercial thing. But really, a monopoly is a political institution. So, when we're talking about monopolies, we're talking about what is effectively a private government over a market, over an industry. If you're operating in a market which is monopolized, then you have a political boss who sets the prices, the terms of trade, who can buy, who can sell, and you're under their thumb. And yeah, it's your trade, right? So, it looks like the quote unquote economy, but in fact, it's really that a person or a firm has political power over you. And if you have enough monopolies in an economy, then at least in the commercial sector, which is a big part of our lives, we're not living in a democratic society. We're living in a society of a bunch of private governments — authoritarian governments over markets. ... There's a good quote from a plumber in the Wall Street Journal who said that, you know, the government can fine me, but Google can put me out of business because Google could take his business off Google Maps. They could change his ranking in Google search. And so, he was way more afraid of Google than the government. And that's because Google has governing power over the internet. ... So, what you have in a lot of areas — and in most, I think — is monopoly or oligopoly, which is just a small number of companies controlling a market, and [this] is now a systemic feature of the American economy. And it didn't used to be.

John Sherman, of the Sherman Antitrust Act, said that if we will not be ruled by a monarch, we should not be ruled by an autocrat of trade. He was very explicit about the link between monarchy and authoritarianism and monopoly. And they were using the term monarchy because fascism hadn't happened yet, but monarchy did exist. In the 19th century, Americans were looking across the ocean and they were seeing a bunch of kingdoms. There was a little bit of democracy, but that's what they were really looking at. And they were like, we don't want that. Today we would just say fascism, and we did analogize monopoly to fascism in the 1920s, 30s, and 40s. It has always been foundational in America that concentrations of power are what we escaped, and they are not what we want here. And there's always been this tension because you do need to consolidate capital and effort to do great public works and to do great works in general. But how do you control the power of that? How do you control the power of industry? If you're going to put a billion dollars together to build a railroad across the country, that’s awesome. Now you have a transcontinental railroad. But who runs that railroad and controls the prices they charge, or the ability for them to charge different prices to different classes of people based on who they want to see succeed? Now, all of a sudden, you're talking about a political problem. 

[reasonsforhope]

“The Justice Department and a group of eight states sued Google on Tuesday, accusing it of illegally abusing a monopoly over the technology that powers online advertising, in the agency’s first antitrust lawsuit against a tech giant under President Biden and an escalation in legal pressure on one of the world’s biggest internet companies.

The lawsuit said Google had “corrupted legitimate competition in the ad tech industry by engaging in a systematic campaign to seize control of the wide swath of high-tech tools used by publishers, advertisers and brokers to facilitate digital advertising.”

The lawsuit asked U.S. District Court for the Eastern District of Virginia to force Google to sell much of its suite of ad technology products, which include software for buying and selling ads, a marketplace to complete the transactions and a service for showcasing the ads across the internet. The lawsuit also asked the court to stop the company from engaging in allegedly anticompetitive practices...

The new lawsuit “adds another important complication to Google’s efforts to deal with regulators worldwide,” said William Kovacic, a former chairman of the Federal Trade Commission. “There’s a chance one or more of these challenges is going to make its way through and hit the target...”

Attorney General Merrick B. Garland said monopolies “threaten the free and fair markets upon which our economy is based.” He added, “We will aggressively protect consumers, safeguard competition and work to ensure economic fairness and opportunity for all.”

The Biden administration is trying to use uncommon legal theories to clip the wings of some of America’s largest businesses. The F.T.C. recently asked a judge to block Meta from buying a virtual-reality start-up, a rare case that argues a deal could harm potential competition in a nascent market. The agency has also challenged Microsoft’s $69 billion purchase of the video game publisher Activision Blizzard, a notable action because the two companies are not primarily seen as direct competitors.

These efforts are expected to meet fierce resistance in federal courts. Judges have for decades subscribed to a view that antitrust violations should mostly be determined by whether they increase prices for consumers. But Jonathan Kanter, the chief of the Justice Department’s antitrust division, and Lina Khan, the F.T.C. chair, have said they are willing to lose cases that allow them to stretch the boundaries of the law and that put corporate America on notice.”

-via The New York Times, 1/24/23

[azspot]

A company getting it right does not give it some kind of permanent licence to coast while printing money. The question that all antitrust seeks to answer is simple: how much is enough? When do the well-deserved riches and power that accumulate to companies that make big bets, execute well, and invest wisely start to be toxic for society or humanity as a whole, and for competition itself? Are the riches that the largest companies make earned, or are they simply the product of being large? If it’s the former, great! But if it’s the latter…

DOJ, Nvidia, and why we restrict monopolies

[memenewsdotcom]

US judge rules Google is monopoly