Has the FTC’s bungling of its investigations of Google established the perception of corruption in the company’s dealings? If that perception becomes common, Google only has itself to blame–when it comes to the Googleplex on the Potomac (formerly known as Washington, DC), they bought it and they take ownership of all of the implications of their purchase. But what we don’t want to hear about anymore is Google’s sanctimonious “transparency” and the company’s ludicrous support for Lessig’s “Change Congress”.
For example, immediately after the FTC’s Chair Jon “The Alderman” Liebowitz brown-nosed his way through his embarrassing press conference announcing the bizarre termination of the Google antitrust investigation, Eric Schmidt wheeled the “Big Google” 767 out of its hangar at NASA’s Moffett Field and was off to do business in the North Korea pirate utopia with Digital Native Kim Jong Un.
And this against the wishes of the State Department–but why does Google care? They own the State Department. And even the U.S. Government knows that Google will outspend them in litigation if the lobbyists don’t do the trick. (No pun ntended.) According to news reports:
Schmidt, who is the highest-profile U.S. business executive to visit North Korea since leader Kim Jong Un took power a year ago, has not spoken publicly about the reasons behind the journey to North Korea.
You don’t suppose it has to do with getting a head start on Google’s competition, do you? I think that if the FTC fiasco has shown anything, it’s that Google has bought their way into the US government from contracting to build the NSA’s massive data collection and spy center (in Rep. Chaffetz’ Utah district) to the Federal Trade Commission to who knows.
The FTC’s Fiasco
“It’s pretty gobsmacking that the FTC is going to decide their biggest antitrust case of the decade without having a meeting of all the commissioners to discuss the evidence, give their positions, hear analysis and allow the entire FTC to understand how the decision was reached.” Jane Hamsher, Firedoglake (“Liveblog of FTC Press Conference Announcing Google Settlement.” (My emphasis.)
It started with questions asked by the press of FTC Chairman Jon Liebowitz’s during his uneven and strangely short press conference announcing the FTC’s decision not to prosecute Google. For example:
Washington Post: Most complaints from groups have to do with search bias. By unanimously closing this case, I’m quite sure Google will be emboldened. You said you did find some evidence of search manipulation, but that they didn’t warrant taking action. Is there a danger that a company can feel they’re off the hook?
Leibowitz: I’m sure anyone who is the Chairman of an agency would like to bring a “big case.” But that’s not our job. We found unanimously that they had not acted monopolistically and had not violated the FTC Act. If they cross the line we can always open a case again. [Right. You mean like how you reopened the privacy consent decree when Google violated that deal?]
FTC Watch: Having had a unanimous verdict here, are you saying the Justice Department should not pursue a case?
Leibowitz: I don’t believe that will be a concern.
A “concern”? Since when is a DOJ investigation a “concern” for other law enforcement agencies? A “concern” to whom?
Ms. Hamsher also had some insight into exactly how Liebowitz obtained that “unanimous verdict”, i.e., a unanimous vote of the FTC Commissioners required to close a case–without a public meeting of the FTC commissioners.
According to the FTC calendar, the commission has not met publicly to discuss the issue of Google. And under the Sunshine Act Meeting Notice, any time more than 2 commissioners meet to discuss an issue, they must publish a notice of the meeting.
From the publicly available information, it looks like outgoing commission Chair Jon Liebowitz has been scurrying around meeting with only one commissioner at a time in order to skirt the intent of the Sunshine Act Meeting notice.
Because of the way Liebowitz bungled his end game, the decision of the Liebowitz FTC deserves to be bracketed in quotes as a “ruling” in name only because its bona fides are questionable at best–and I’m not the only one who thinks so.
Unfortunately for the professional staff at the FTC, it may turn out that the resume value of working at the FTC may also need to be bracketed thanks to Jon Liebowitz.
Press Reaction Points to Appearance of Corruption on a Grand Scale
Much of the press on the FTC “decision” revolved around a baseline trope of how Google’s handling of the FTC demonstrated the coming of age of the tech industry in Washington, particularly compared to how Microsoft handled its own antitrust investigation. While it is a trueism that nothing says Internet Freedom like getting away with it, the better metaphor for Google’s approach might be either a teenager waiving a gun in your face or schoolyard bully threatening to do so.
Otherwise–why was there a backroom deal?
In Did Google Buy Its Way Out of Trouble With the Feds?, The Atlantic Wire sums it up:
Another lesson Google learned from Microsoft was to work with Washington… And, again, that takes a lot of money. Google flew people to D.C. regularly. And this year the company started giving money to both Democratic and Republic causes. It also hired the right people to make it look good, forming “strategic alliances” with – or, you know, donated money to – the Heritage Foundation, the American Enterprise Institute, and the Competitive Enterprise Institute, just to name a few of the D.C. institutions that Google’s U.S. Public Policy and Government Affairs division supports. In addition, Google hired 18 lobby firms – not just individuals. Last year, the company had 93 lobbyists in D.C. That’s one for every six members of Congress….
Gerry Smith in the Huffington Post writes “Google’s Antitrust Settlement Reflects Small Price Corporations Pay To Buy Influence In D.C.” and notes that the FTC’s prior investigations of Google for hacking browser settings in smartphones to display ads where none were wanted resulted in a $25,000 fine–the cost of a good lobbyist dinner (with wine pairings). And then when Google drove cars around America taking pictures of your house while secretly snarfing down your WiFi data, the FTC fined Google $22.5 million. Which Google made before you finished the first paragraph of this article.
The New York Times, Next Web, Politico, and many other press outlets have all chimed in and will no doubt continue to do so.
One meme that has developed in the press is that Google “learned” from Microsoft’s mistakes in Microsoft’s handling of its own antitrust investigation. Meaning that Google played the money game in the Googleplex on the Potomac, aka Washington. But does the analogy start correctly? Is Google really that much like Microsoft (or any other Big Tech company)?
How Google is Unique
For all the analogies to Microsoft, one thing Microsoft did not do was plea bargain with the U.S. Government for selling drugs in violation of the Controlled Substances Act–or get an apology from the Justice Department for having done so. And neither has any other company.
Recall that Google paid a $500,000,000 fine after an extensive and long-term sting operation by the FDA and grand jury investigation into Google’s sustained and comprehensive program of selling advertising for prescription drugs sold by “pharmacies” without a prescription. When the U.S. Attorney for Rhode Island gave an interview to the Wall Street Journal stating that he had emails demonstrating that Larry Page was an active participant in the decisionmaking that sustained the drug sale effort and internal obfuscation, the Justice Department reportedly apologized to Google according to statements made in open court by Google attorney Boris Feldman while fighting to keep the 4 million pages of grand jury document production away from Google stockholders suing the company’s board for malfeasance in the drugs case. (Have Google learned? Try searching Google for “buy oxycontin online no prescription” and see what you get.)
Another way that Google is unique is that Google is the only company that ever promoted sex club apps that geolocate escort services to the benefit of pimps. Apple actually expressly refused to distribute the same sex club app through the App Store. In fact, this was after Google received a bi-partisan letter from Representatives Marsha Blackburn and Carolyn Maloney asking for Larry Page to explain why Google seemed to be profiting from sex trafficking in search. (See “Google Profits from Sex Trafficking” by Breeanne Howe in Redstate.)
Page ostensibly ignored that letter until Google got caught with the sex club app, prompting a second letter from Rep. Carolyn Maloney (D-NY) who wrote to Larry Page:
The [Utoopi sex club] app promotes sex trafficking in four cities, one of them my own. The web site for Utoopi services in New York City features a picture of a street corner that is in my district.It is appalling beyond belief that someone would try to market an ‘app’ like Utoopi, which is about illegal escort services plain and simple. I urge you to ban the promotion of sex services and immediately remove Utoopi from the Android ‘app’ marketplace hosted by Google.
Whatever anyone wants to say about any other tech company, the level of depravity exhibited by Google is way, way beyond anything Microsoft or any other company ever did or has ever done.
Look Over Your Shoulder
The clear message to career public servants is to keep an eye over your shoulder. If you see Google coming, watch out. They may show up in the form of the Heritage Foundation, the Berkman Center, or a host of NGOs, academics and bloggers (see “Google Shill List“). These NGOs may get money directly from Google or indirectly through Google’s class action settlements (see Roger Parloff’s story in Fortune, “Google and Facebook’s New Tactic in Tech Wars” about how Google disguises millions in contributions to the Electronic Frontier Foundation, Santa Clara Law School and others). Remember–the first step in building the great empires was to send in the missionaries.
Staffers know–Liebowitz is leaving the FTC. Career staff have to live with the black mark he leaves behind, probably for the rest of their working lives. Assuming the black mark doesn’t become a smudge. And when you consider that the European Commission and various states (including Texas) are full speed ahead on their own investigations, that smudge may come from other jurisdictions findings that the FTC should have caught (see “Google Unlikely to Get Kid Glove Treatment THIS Side of the Pond” by Andrew Orlowski in The Register).
The message to career public servants from the FTC fiasco is pretty clear: Deal with Google by the book every time, or you will be caught up in at least a perception of corruption if not a career-ending sting operation you don’t even know is ongoing.
It’s already starting with Rep. Daryl Issa’s investigation into the FTC leaks–although its unclear at this point whether the investigation is inspired by Google’s complaints about leaks so they were unable to keep their backroom deals entirely in the back room. It would be a classic Googlely move to do a backroom deal, have dedicated professional staff leak details to the press because they knew it all stank to high heaven, and then have the leakers prosecuted by the government with which it did the crony deal.
Check your six, FTC. The FOIAs may be incoming.
Google bought it, so Google owns it.