Posts about antitrust

Statement to the Judiciary Subcommittee on Antitrust

March 12, 2021 by Jeff Jarvis
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I was called about possibly testifying to a hearing of the House Judiciary Subcommittee on Antitrust regarding technology companies. That’s not happening but I decided to submit a statement to the committee. Here, minus my bio, is what I have to say:

Statement to the Subcommittee:

I write to the committee to express my concern about often well-intentioned but ill-conceived internet regulation, which could have deleterious effects on freedom of expression; which tends to protect incumbent media and technology companies at the expense of innovation and competition; and whose unintended consequence is frequently to grant internet platforms yet greater power. It is worthwhile to examine the effects of internet regulation elsewhere as it is debated here.

Consider, for example, Australia’s media code. The net result, according to the news site Crikey, is that the country’s existing media duopoly of News Corp. and the Nine Network will receive 90 percent of the money being paid by Google and Facebook, both of which are now in the position to decide which news organizations should receive support. Small news startups that might compete with the powerful incumbents receive no protection or support in the law. The Australian code amounts to a link tax — for those companies that link to news are required to pay for news — and Sir Tim Berners-Lee, inventor of the web, testified to Australian legislators that such a precedent would “make the web unworkable around the world.” It would break the internet. I regret that in the end, Google and Facebook succumbed to what I see as corporate and political blackmail.

In Europe, various changes to copyright law — Germany’s Leistungsschutzrecht, Spain’s link tax, the EU’s Articles 15 and 17 of the its Directive on Copyright — amount to regulatory capture, for the large internet companies can afford compliance but I have spoken with smaller competitors for whom the expense and effort are crippling. Germany’s NetzDG hate-speech law requires Facebook to decide — in a private company rather than an open courtroom — what speech is manifestly illegal. Europe’s Right to be Forgotten court decision puts Google in the position of deciding what speech should be remembered or forgotten. The UK is considering regulation that would require platforms to take down “legal but harmful speech.”

Online speech is imperiled in many quarters. In Italy, Facebook was forced to reinstate a site for a neo-fascist group. Poland has announced a new law that would require platforms to carry all legal speech, a nightmare that would protect the worst of the net. I would remind us that compelled speech is not free speech. In addition, Singapore instituted a fake-news law, which puts internet companies in the unwanted position of being arbiters of truth. Similarly, India is enacting regulation that would require platforms to take down speech that is false or threatens national unity.

In the United States, Google’s recent announcement that it will forego ad targeting on the web based on third-party data was applauded by privacy advocates who have demonized web cookies as so-called “surveillance capitalism.” But this again amounts to regulatory capture as Google itself has plentiful first-party data about consumer behavior as well as the resources and technical means to innovate in advertising. Incumbent publishers, on the other hand, are stuck without their own first-party data or innovation. I know this because in my university center, I spent years trying to convince publishers to change their product and business strategies to prepare for this day. They generally insisted on relying on their dying print businesses and on third-party ad networks online, and now they are retreating behind paywalls. As a result, just when we need it most, reliable news is becoming a product for the privileged few who can afford it. According to Oxford’s Reuters Institute, only 20 percent of Americans pay for online news and it is a winner-take-all market with most people paying for only one subscription for news — almost two thirds of subscriptions go to just three publishers: The New York Times, The Washington Post, and Rupert Murdoch’s News Corp.

Note well that most local newspaper companies in the United States are now controlled by hedge funds, which are not inclined to invest in innovation and which, by their nature, tend to sell assets and draw cash out of these enterprises. If there ever were an attempt to enact an Australia-like law here — if it could overcome clear First Amendment objections — any money resulting from it would end up in the balance sheets of hedge-fund owners and would benefit neither journalism nor innovation at legacy, local news companies.

Thus to grant newspaper owners an exemption from antitrust, as has been discussed, would be profoundly anti-competitive, for it would — as in Australia — entrench the interests of the largest companies on both sides of the table, media and technology.

Similarly, I argue that breaking up major technology companies is an emotional response to the discussion of technology and power. It would not meet the test of rectifying consumer harm, for users benefit tremendously from free, open, and inexpensive services. Also, there is considerable competition; note Microsoft’s role in this debate.

Instead, in both industries — technology and media — the best cure for concerns about size is to encourage and support entrepreneurship and new competition. In my university, I started a first-of-its-kind program in entrepreneurial journalism to teach journalists to do just that. I hope next to turn my attention to internet studies, to foster the design and creation of a next generation of the net: one built not just to speak but to listen, one designed to build bridges rather than battlements, one that protects the benefits of today’s historically unprecedented opportunity to hear voices too long not heard in mass media. There is much work to be done and much opportunity to create competitors to the present proprietors of the net and media. This is where we should focus our attention in policy.

The net is yet young. We don’t fully know what it is and may not for generations, even centuries. Note that the first newspaper was not published until a century and a half after Gutenberg introduced movable type. In my research for a book on the end of the Gutenberg age, I have learned much about the reaction to the introduction of printing. After initial and brief utopian glee at its prospects, authorities worried greatly about print’s power to spread the fake news of the day, to cause unrest (the Reformation and the Thirty Years’ War), and to disrupt institutions. I have also learned that governments’ attempts to control printing and thus speech largely failed. In a prescient 1998 paper for the RAND Corporation, “The Information Age and the Printing Press: Looking Backward to See Ahead,” James Dewar argued persuasively for “a) keeping the Internet unregulated, and b) taking a much more experimental approach to information policy. Societies who regulated the printing press suffered and continue to suffer today in comparison with those who didn’t.”

In what I have said here, it might sound as if I oppose all internet regulation. I do not. I worked for more than a year with a Transatlantic High-Level Working Group on Content Moderation Online and Freedom of Expression, convened by former FCC Commissioner Susan Ness under the auspices of the Universities of Pennsylvania and Amsterdam. The group included many experts and luminaries, such as former Secretary of Homeland Security Michael Chertoff, former Ambassador Eileen Donahoe, former Estonian President Toomas Ilves, and former members of the European Parliament Marietje Schaake and Erika Mann. Our report recommended a flexible framework for internet regulation based on transparency as the basis of accountability as well as the establishment of e-courts to rule on matters of legality where that should occur, in public and in court.

To put this in my terms, I have long argued that both technology and media companies should make covenants of mutual obligation with their users and the public — not just rules for users but promises from the companies for what we may expect of them in building useful, respectful, and productive services and environments. In the model of the Federal Trade Commission, I would favor requiring them to provide data about their implementation and impact so as to hold them accountable to their promises. I also hope for a multistakeholder forum — of technologists, lawmakers, regulators, civil society, academics, and users — to grapple with new and unforeseeable problems, such as pandemics, and to exploit new opportunities.

Internet regulation should not be about punishing power or success but instead about creating the means to work together for a better internet, a better society, a better future.

Google? Evil?

March 22, 2015 by Jeff Jarvis
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A few folks on Twitter have asked for my reaction to the accidental sharing of an FTC staff report on Google, wondering whether it will cause me to eat Crow McNuggets given that I am known to defend Google against some of the frequent attacks against it.

It’s difficult to judge the entire FTC report based on the excerpts and reports written by The Wall Street Journal. I figured the best I could do would be to ask myself where I draw the line between evil and good, illegal and legal in the behaviors alleged against Google.

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First, the coverage says that Google scraped content from Yelp, TripAdvisor, Amazon, and other sometimes-competitors. Well, of course, Google scrapes content everywhere; that its Job 1. Scraping is no more illegal or evil than reading, just a helluvalot faster. Any site can stop scrapers at the door with robots.txt instructions. Once scraped or read, information itself cannot be copyrighted, so there is nothing evil or illegal about consuming, using, and repeating that information.

It does not violate copyright law to reuse the information itself so long as the use does not infringe on its creator’s presentation of it. In other words, I can read on Yelp that a restaurant is open until 10 p.m. and repeat that in a restaurant listing on my newspaper site without fear; it’s information. (Whether I trust the source of that information and whether I link to it are separate questions that are also worthy of discussion in regards to journalism, where we read and repeat for a living.)

I see nothing wrong with Google and other search engines scraping and retaining content from a site in their unseen databases for the purpose of analyzing that content to decide how to present links to it in search. It is in sites’ enlightened self-interest for that to occur.

I also see nothing wrong with quoting from these services’ content for the purpose of linking to them. I would call that fair use. This is the behavior at the heart of the fight with publishers in Germany, where the word “snippet” is now a legal term, though — like “fair use” — it is not and should not be precisely defined. This is also the behavior that is now being taxed in Spain — that is, those quoting and linking to sites are now required to pay those sites, whether the quoted sites demand it or not. This is what led Google to shut down Google News there. With this law, Spain has attacked the heart of the web.

Now here is where the line would be crossed: If Google republished these services’ content in whole and without permission, then that is a violation of copyright law and Google would be in the wrong. Google and Yelp have tussled over just this in the past; Yelp’s reviews appeared on then disappeared from Google’s Places pages. The Journal’s report says:

When competitors asked Google to stop taking their content, it threatened to remove them from its search engine.

“It is clear that Google’s threat was intended to produce, and did produce, the desired effect,” the report said, “which was to coerce Yelp and TripAdvisor into backing down.”

I can’t tell exactly what happened here. If Google did indeed threaten to stop listing Yelp in search if it stopped Google from wholesale republishing its content, then I would call that an improper use of its power: evil. But I am not sure that is what happened. Yelp disappeared from the Places pages (which since themselves disappeared) but Yelp stayed in search (that’s how I get to it all the time). So without more information, I can’t draw a verdict on this point.

* * *

The next question is whether Google favors its own services in search. I’ve long found this allegation odd. First, publishers routinely promote their own services and fail to promote competitors’. When European publishers attacked Google, they complained that when searching on “running shoes” one finds Google’s ads for its own shoe advertisers and partners atop the page. But I have pointed out that if you go to the “Schuhe” link on Bild.com — the largest newspaper in Europe, owned by one of Google’s betes noires — one finds no promotion of competitors’ offerings. On Google, one does indeed find ads from its shoe advertisers and retailers, clearly labeled, but then on the top screen one also finds links to their competitors in shoespace, Zappos and Nike.

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And if one searches for “maps” one finds Google Maps first (they are the best) but then links to competitors Mapquest, Yahoo, and Bing. What publisher does that? Aren’t news organizations supposed to be impartial? Then under this doctrine shouldn’t People promote Us?

That’s an even odder expectation of Google: that it be impartial. I know of no law that decrees that search must be impartial. Hell, a U.S. district judge said that Chinese search engine Baidu had a First Amendment right to be partial and censor search results. I would find it even harder to define impartiality in search than I would in journalism. In fact, I want my search results to be partial, to favor quality, originality, authority, relevance (to my request and ultimately to me), and timeliness (when that is relevant). Impartial search would be noisy, spammed, useless search.

Also note that history’s first ads in search — on Bill Gross’ GoTo.com, which became Overture, which was acquired by Yahoo — featured paid placement in rather than merely alongside search. Indeed, Google had to pay Yahoo $300+ million in settlement for infringing on the patent for advertising in search from Overture. But along the way, it was Google itself that instilled in us the idea that ads should not appear in search and that one should not be able to pay for placement. So Google set that standard. Now it’s true that the FTC makes it living holding commercial entities to their own standards. But to be found guilty of such consumer fraud, Google must have made the promise to which it is now being held. Does it? In its principles, Google says ads should be relevant and labeled — and they are — but doesn’t say anything that I can find about impartiality.

Now if it’s true that Google purposefully and secretly downgrades competitors, I would find that to be a betrayal of the trust we hold in it: evil. I don’t know whether that’s proven here. If Google promotes its own sites without labeling that as promotion, I would find that hypocritical, but I also don’t know whether that is happening here.

* * *

The next allegation in The Journal’s report is that Google restricted advertisers from using data obtained while advertising on Google in campaigns placed on competitors’ services. I’m not sure precisely what this means but I will say that Google — a company that believes information should flow freely — should allow brands that have paid to advertise to use whatever intelligence they gain however and wherever they wish. More broadly, I have argued that point in posts about what both Google and Facebook could do for news, advocating a freer exchange of data about users and content. In any case, The Journal says Google revised its terms to “give advertisers more control over their own ad-campaign data.”

* * *

Finally, The Journal says (in an abbreviated graphic) that Google tried to restrict sites that did search deals from also doing deals with competitors, including Bing. I’d call that just stupid: a red cape for antitrust investigators. The Journal said one investigator cited a lack of evidence of this complaint.

* * *

Please keep in mind two things about this report. First, Journal owner Rupert Murdoch has what one might call in my impolite company a hard-on for Google. Second, a much more reasoned Washington Post report explains that the accidentally leaked report was from the FTC’s lawyers, who tend to itch for antitrust fights, while a separate report from the agency’s economists — who look for impact of companies’ behavior on consumers — argued against taking on Google.

Let’s also remember that it’s the market that made Google as big as it is. In Germany — the front line of the war against Google — the company has its second highest market penetration of anywhere in the world, 50 percent higher than in America. German consumers obviously use and apparently like Google and I must ask whether their media and government are in sync with them. Google argues — and I agree — that there are perfectly good alternatives for every consumer service it offers: Bing for search, Mapquest for Maps, Outlook for mail, and so on.

But — and this is a huge but — there is no easy alternative for advertisers. That is where I have long argued that Google is vulnerable to accusations of abuse of power. When it comes to which advertisers are deemed to be bad actors, Google wields the power of God. Some shopping comparison sites are pure spam and Google is right to ban them. But should we always trust Google to make that decision? I’ve suggested that Google should have a jury of commercial peers help with that judgment.

My bottom line: If Google secretly disadvantages quality — not spammy — competitors, that would be wrong. If Google presented others’ *complete* content without permission and ejected sites that resisted such wholesale copying from search, that would be wrong. But in the Journal report, I don’t see sufficient evidence of either act to definitively declare guilt. More to the point in the discussion of antitrust at the FTC and in Europe, I don’t see cause to break up the company.

The other day, I spoke at length with a European journalist who disagrees with me about Google, Silicon Valley, Eurotechnopanic, and regulation. She reflexively leapt to regulation as a necessary reaction to any company that grows “too big.” I asked her, as I ask many with whom I have this conversation, to show me the statutory definition of “too big.” The issue is not how big a company is but what it does with that size. The issue is not what a company could do with that power but what it does with that power. I also asked her to show me why I should trust government to do a better job managing these processes than the market. The market took care of Microsoft’s excesses, not the EU. And governments in Europe are doing much to damage the net, from the Germany’s Leistungsschutzrecht to Spain’s link tax to the EU court’s right to be forgotten. I acknowledge that I sound like a libertarian when I say this but I will point out that I am a Hillary Clinton Democrat. But I do not favor regulation for regulation’s sake.

I sometimes wish Google would fuck up more so I could criticize it more often. I have criticized Google. But I have defended it because I generally find it to be a good company and because it is often the whipping boy for those who would attack not just Google but the net and its disruption as well as American technology companies. If on the basis of the Journal report you want to see me repudiate Google and call for its dismembering, sorry.

The crow flies. It doesn’t fry tonight.

crow in flight