Archive for March, 2015

@senmikelee Investigating White House Influence in FTC Decision Not to Prosecute Google

March 31, 2015 1 comment

According to the National Journal (“Senate to Investigate White House Role in Google’s Antitrust Victory“):

A Senate panel plans to investigate whether the White House inappropriately derailed a federal investigation into accusations that Google was stifling online competition.

Sen. Mike Lee, the chairman of the Senate Judiciary’s Antitrust Subcommittee, plans to contact the Federal Trade Commission, Google, and other online companies to discuss the issue, Emily Long, a spokeswoman for the Utah Republican, said Monday. The subcommittee has no plans yet to hold a hearing on the issue, she said….

“In short, we are interested in how the FTC allowed a confidential report to be disclosed, and second, what conversations, if any, the FTC or Google had with the White House about the pending investigation,” Long said in an emailed statement. “We are not likely at this time to re-examine the underlying merits of the investigation, which was closed. Our interest is in oversight.”

It’s not the first time that the White House has come under fire for allegedly putting pressure on an independent agency. Congressional Republicans are also investigating whether the White House inappropriately influenced the Federal Communications Commission’s decision to enact tough-net neutrality regulations.

“We look forward to discussing these matters with Sen. Lee’s office,” said FTC spokesman Justin Cole.

Well, maybe Google’s Senior Vice President of Communications and Public Policy Rachel Whetstone will send Senator Lee a nice laughing baby GIF like she did for Rupert Murdoch?  Or just drop the pretense and sue him for challenging Google’s sovereign immunity like Google is doing with Mississippi Attorney General Jim Hood?

Senator Lee would do well to read Public Citizen’s nonpartisan and very scary report about Google’s political contributions and influence called “Mission Creep-y: Google Is Quietly Becoming One of the Nation’s Most Powerful Political Forces While Expanding Its Information-Collection Empire”  (get a free copy here).

Search Engine Land reports that:

Republican Senator Lee, a bitter Obama critic, who likely recognizes an opportunity to potentially embarrass the White House even as he appears to be doing his job. It is ironic that Lee and others like him, with their historical anti-regulation rhetoric, are now suggesting that there should have been stronger regulatory intervention in this case.

Yet the FTC competition report disclosed last week, juxtaposed with the tepid investigation outcome, does raise questions about the FTC investigation and its decision not to pursue stronger action against Google. The agency tried to dispel any appearance of impropriety with several statements explaining that the Bureau of Competition report was simply one among many the agency considered in coming to its decision.

The controversy clearly isn’t over and the FTC will be compelled to further explain the gap between the internal report recommendations and the investigation’s outcome.

You are going to hear a lot of deflection about Senator Lee’s oversight investigation of the FTC being hypocritical as Senator Lee is a small government conservative who should be opposed to FTC regulation.  It is certainly true that antitrust is one of those areas where small and big government types collide.

But Senator Lee has expressly sworn off reopening the FTC’s antitrust investigation.  Senator Lee is clearly focused on whether there was improper political influence over the FTC’s investigation coming from the White House.

Now why ever might he think that?

It’s very hard to tell what goes on in the White House if they don’t want to tell you–assuming that the business wasn’t conducted at Caribou Coffee (across the street from 1600 Pennsylvania Avenue).  But here’s a couple of insights from a FOIA of Andrew McLaughlin.  McLaughlin is a former White House employee (US Deputy CTO) and former director of global public policy for Google who was reprimanded and asked to leave after an inadvertent disclosure of government business being done on his personal email account…ahem…


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And then who can forget this post-election meeting at the San Francisco home of David Drummond, Google’s head lawyer, along with McLaughlin pen pal Ben Scott and of course, the Poker Prof himself, Lester Lawrence Lessig III.

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Here’s a nice picture of David Drummond advising Eric Schmidt to take the 5th and refuse to answer Senator Cornyn’s questions about Google’s $500,000,000 non prosecution agreement with the Criminal Division of the U.S. Justice Department the last time that Google was investigated by the Senate Antitrust Subcommittee:

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As we noted in “Government Capture and Google’s Crony Capitalism Assault on America,” the list of Google employees in the executive branch is long and distinguished.  Here’s a handful:

President’s Council of Advisors on Science and Technology and Obama Campaign Volunteer: Eric Schmidt (call sign “Uncle Sugar”)

Google Lobbyist: Katherine Oyama (former Associate Counsel to Vice President Joseph Biden)

Counselor to the Chairman, Federal Communications Commission: Gigi Sohn, formerly CEO of Google Shill Lister Public Knowledge.

Special Assistant to Chairman, Federal Communications Commission: Sagar Doshi (Google Product Specialist)

Chief Digital Officer, Office of Management and Budget and Featured Revolver at‘s Revolving Door Site: Jason Goldman, formerly Product Manager at Google.

Director of Google Ideas (and co-author with Uncle Sugar of The New Digital Age): Jared Cohen (formerly a member of the Secretary of State’s Policy Planning Staff and as an advisor to Condoleezza Rice and later Hillary Clinton).

Director of United States Patent and Trademark Office: Michelle Lee (formerly Google’s Head of Patents and Patent Strategy)

U.S. Chief Technology Officer: Megan Smith (formerly at Google[x])

Deputy U.S. Chief Technology Officer: Alexander Macgillivray (formerly Google’s point man on orphan works)

Director of Google Advanced Technology and Projects Group: Regina Dugan (former director of DARPA)

Director of U.S. Digital Service aka savior of (in case you couldn’t tell): Mikey Dickerson (former Site Reliability Manager at Google)

YouTube Global Communications and Public Affairs Manager:  Chelsea Maugham (former U.S. State Dept. Chief of Staff)

Google Head of Global Development Initiatives: Sonal Shah (Advisory Board Member, Obama-Biden Transition Project)

Deputy U.S. Chief Technology Officer (White House): Nicole Wong (former Google Vice President & Deputy General Counsel)

And then there are dozens if not hundreds of former Hill staffers now working for Google’s DC shillery.

How does Google get away with it?  Perhaps Senator Lee will find out.

The Queen of Denial: Be Careful or Rachel Whetstone Will Clap You in Irons

March 30, 2015 1 comment

The demagogue is one who preaches doctrines he knows to be untrue to men he knows to be idiots.

H.L. Mencken

You may have read one of many, many recent news articles about an internal Federal Trade Commission report about the Google antitrust investigation released by the FTC under a Freedom of Information Act request by the Wall Street Journal.   That report conclusively demonstrates that at least some of the lawyers at the Federal Trade Commission wanted to bring an action against Google for a variety of violations of the U.S. antitrust laws.

That report was overruled by the political appointees who run the FTC.

The Journal followed up their reporting with an analysis of how many times Google met with Obama Administration officials at the White House both before and after the FTC voted not to pursue an action against Google.  When coupled with the number of Google executives now working in the U.S. government (not to mention the Chief Technology Officer at the White House and the Chief Digital Officer at the Office of Management and Budget) this raised the implication of Google crony capitalism on an even grander scale than usual.

It was only a matter of days before the FTC began pushing back hard.  More about that later.  But today we heard from Google in the form of a post on a Google blog by Rachel Whetstone, Senior Vice President of Communications and Public Policy at Google.  Ms. Whetstone denied any undue influence from Google’s massive and well-known U.S. lobbying efforts and the number of former Google executives in high ranking roles in the U.S. government as well as former U.S. government employees with high ranking roles at Google.

Under the title “Really, Rupert?” we were treated to sanctimony that only the “see no evil” crowd can come up with, complete with infantile animated GIFs–literally.

Ms. Whetstone decided to focus her ire on the Wall Street Journal–not the journalist, not the editor, no no.  Not the Wall Street Journal and not News Corp.  No, that’s not how Google rolls.  She laid into News Corp CEO Rupert Murdoch.  Remember him?  He owned News of the World and was notorious for the influence of News Corp. (or News International) in the government of UK Prime Minster David Cameron.

Without reviewing the entire revolting phone hacking scandal that brought down News of the World and was one of News Corp’s darkest periods, let us recall one of the key figures in that scandal: Andy Coulson.

So who was Andy Coulson and why is he relevant to Ms. Whetstone’s tirade against Mr. Murdoch?  If you just read the reporting on Ms. Whetstone’s post you would have no idea.

Mr. Coulson was a journalist and worked his way up to being the editor of News of the World until he resigned from News of the World in 2007 at the early stages of what became the phone hacking scandal.  He was then hired by UK Prime Minister David Cameron as the highest paid special advisor on Camerons’ communications staff where he stayed until 2011 when he resigned shortly before his arrest as the phone hacking scandal came back with a vengeance.  Mr. Coulson was convicted of crimes related to phone hacking and sentenced on July 4, 2014 to 18 months in prison.  He is about to be tried in Scotland for perjury in an unrelated case, so may find himself a guest of the Scots if that trial doesn’t go well for him.

What’s the connect?  As the Guardian reports (“Tory rivals Andy Coulson and Steve Hilton move in together“):

Coulson, the Essex boy who became editor of the News of the World, and Hilton, who has been the brains behind the detoxification of the Tory brand, are said to have differed over election strategy. The two men have always been on friendly personal terms. But Coulson was said to favour a harder edge while Hilton wanted to focus on a sunnier, optimistic message of the future in the mould of Ronald Reagan’s “Morning in America” theme.

So Mr. Coulson and Mr. Hilton were quite well acquainted with each other.  But what’s the Google connection?

The Telegraph summarized the connection quite well (Will We Be Governed The Google Way or Rupert Murdoch’s Way?)

During the [last] general election, David Cameron tried to resolve [the] differences [between Coulson and Hilton] by placing them in the same office [see above]. This made things worse. Their relationship can in part be accounted for as routine feuding between courtiers. But it goes much deeper. They represent the rival belief systems and world views associated with two media behemoths, News International and Google. These organisations, one so dominant in the news and broadcast media, the other the most dynamic force in the world of online communication, find themselves in constant and often angry conflict.

Eerily, this conflict manifests itself daily inside Downing Street, where Andy Coulson represents the News International point of view. Editor of the News of the World for four years, he was destined for the top of News International until his royal correspondent was caught hacking into the private telephone conversations of members of the Royal family, forcing Coulson’s resignation (though he denies any knowledge of the hacking [which denial proved his undoing]). He shares many of the values of Rupert Murdoch, the great newspaperman and business genius who founded News International: populist, lower middle class, Thatcherite, chippy….

While Coulson wears the dark business suit and well-pressed white shirt expected of all NewsInt executives, Steve Hilton pads round Downing Street in his socks with his shirt untucked. This style, de rigueur in Google’s California headquarters, where creativity is valued ahead of conformity, raises eyebrows in Whitehall. He spent six months in Santa Clara county, California, shortly before the last election, with his high-powered wife Rachel Whetstone, who is Google’s global communications chief and a former Tory staffer.

Yes, that’s right.  Rachel Whetstone–she of the high dudgeon and animated GIFs pillorying Mr. Murdoch on the Google blog–is married to a close advisor to UK Prime Minister David Cameron.  Not just any advisor, but the one who somehow came out on top in the power struggle over Mr. Cameron’s ear between Google and News Corp.  According to Wikipedia “Whetstone is married to Steve Hilton. The couple were godparents to Ivan Cameron, the late eldest child of David Cameron.”

So the irony of Ms. Whetstone’s latest attack on Mr. Murdoch is that there is probably no one at Google who is more personally tied up in crony capitalism than she.  You have to wonder just what state of denial she must be in to sign her name to a sanctimonious whinge trying to deflect attention away from the reality of Google’s influence peddling and away from the equally obvious reality of the FTC report.  Given all the disclosures about Google that have come out since Mr. Coulson’s undoing, it’s pretty obvious that she doesn’t understand that nobody is buying what she’s selling–least of all Senator Mike Lee, chair of the U.S. Senate Antitrust Subcommittee who is rumored to be contemplating an investigation into the entire FTC debacle.

The Telegraph article concludes:

This tension between the naive but joyful [pre-Snowden] optimism of Google and the bleaker but arguably more realistic News International philosophy of human nature is likely to persist. But the future of Andy Coulson is less certain. He was obliged to give evidence in Glasgow’s High Court yesterday in a legal case which has been connected with the phone hacking scandal. Outings such as these do not amuse News International executives. They say that Coulson’s high profile as Downing Street director of communications gives unwarranted publicity to a dismal episode in News International history which they would much rather forget.

I am told that Rupert Murdoch himself, though an admirer of Coulson, believes that it is high time that his one-time protégé quit Downing Street. For the time being, however, David Cameron remains determined to keep his embattled communications chief.

So as it turned out, the answer to the Telegraph’s question is that the UK is being governed the Google way.

And by the look of it, so are we.

Must Read Op-Ed by AFM President Ray Hair Lays it Down on the Shadowy Naxos Deal with Pandora

March 28, 2015 Comments off

The Trichordist

As we posted, there are very few details about the recent direct deal between Naxos Records and Pandora.  The two big points that aren’t getting discussed is the Pandora special “steering payola” that Naxos and Pandora refused to discuss with the RAIN Newsletter.

The big issue that Naxos and Pandora also refused to discuss is direct payment to artists, musicians and vocalists through SoundExchange which was a big part of the Merlin direct deal with Pandora.

The musicians union president Ray Hair (American Federation of Musicians) stepped up and called out Naxos and Pandora on this issue in Billboard in a must-read op-ed:

We are alarmed by the agreement recently reached between Pandora and Naxos, the world’s leading classical music label, on a multi-year US license for the entire Naxos catalog. We were concerned when their joint announcement was notably silent on any mention of fair and direct payment…

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Google Distributing Another Terrorist Propaganda Video

March 26, 2015 Comments off

Right on cue, Google’s YouTube video monopoly platform is distributing yet another terrorist propaganda video:

According to The Long War Journal:

The Al Nusrah Front, al Qaeda’s official branch in Syria, has released another video showing its fighters using American-made TOW missiles. As The Long War Journal reported earlier this week, Al Nusrah released a video featuring a TOW missile attack in the early hours of the jihadists’ newly-launched offensive against Syrian regime forces in the city of Idlib.

Al Nusrah continues to use the weapons against Bashar al Assad’s forces. Earlier today, Al Nusrah released the video shown above on one of its official Twitter feeds.

These guys know who they can count on to distribute their aspirational jihad videos, the “catch me if you can” video network being pumped right into your house right now.

The Free Speech Rights of Advertisers (h/t to @LaurieSegallCNN)

March 26, 2015 Comments off

As we have seen in Google’s attempt to stop being investigated by Mississippi Attorney General Jim Hood and other members of law enforcement, Google are quick to cast themselves as the defenders of free speech under attack from law enforcement–as they serve ads on YouTube against ISIS recruitment videos as reported by CNN, NBC an a host of others.

The latest example is the aspirational video posted by Jund al-Aqsa promoting the group’s most recent suicide bombing attack (YouTube Distributes Jund al-Aqsa Video Glorifying Jihadi Suicide Bombers).

One group whose free speech rights were not discussed: Advertisers.  But thanks to courageous reporting by CNN’s Laurie Segall, the truth is starting to emerge on just how bad Google’s adserving platforms really are.  (See These Ads Ran Before ISIS Videos).

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NBC covered the story, but this time the reporters unfortunately succumbed to the Google Spin (Ads Shown Before YouTube ISIS Videos Catch Companies Off-Guard):

With more than 300 hours of footage uploaded every minute, and with ISIS-related videos cropping up from a variety of accounts, YouTube relies heavily on its users to flag content that violates its community guidelines. YouTube also has a “promotes terrorism” flag as an option underneath every video, and it reviews content that anyone flags.

In other words, Google’s defense is that in an environment that is 100% within Google’s control, Google is unwilling to spend the money to properly filter videos that violate laws against giving material assistance to terrorists before YouTube distributes them widely around the world through ISIS’s much vaunted social media campaigns.

And serve advertising against them, thus forcing their advertisers to subsidize terror.

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There are several steps the Congress could take that would  go a long way toward fixing Google’s unwillingness to treat advertisers fairly and honestly.  These are best summarized by Professor Ben Edelman of the Harvard Business School in his “bill of rights for advertisers” which offers a robust multi-tiered approach easily adopted in regulation and against which one can imagine little principled objection.  Consider right #1:  The advertiser’s right to say no.

Ask Advertisers Where They Want Their Ads to be Placed

It usually comes as a surprise to the casual observer of YouTube’s distribution and monetization of terror that advertisers—the true source of the revenue for Google—are kept in the dark about the ultimate destination of their ads.  As Professor Edelman says,

“It is nonsense to pay for ad space without knowing where an ad will appear; sites vary too much in user quality and context.”

Refusing to tell advertisers where their ads appear is a common practice, in fact is the industry standard.

Why might that be the case?  Is it that the adserving company doesn’t want to bear the cost of producing the information for its clients, or is it that the adserving company doesn’t want to get the advertisers’ approval.  Or take a chance that the advertiser might leave the service or worse yet—refuse to pay for advertising against YouTube videos that it had instructed Google were not to have the advertising.

Yet by producing this piece of information—no law enforcement costs to the government involved—advertisers speech rights are protected and Congress helps the market to correct for many of these anomalies.

Clearly, providing decent accounting information and true choice to advertisers is not a panacea.  But it is certainly something that Google could do tomorrow as an undeniable benefit for truth in advertising.

It is the FTC’s long held view that

“cyberspace is not without boundaries, and fraud and deception are unlawful no matter what the medium. The FTC has enforced and will continue enforcing its consumer protection laws online to ensure that products and services are described truthfully in online ads….These activities benefit consumers as well as sellers, who expect and deserve a fair marketplace.” (emphasis mine)

Requiring the FTC or other government agency to enforce such a law as part of the FTC’s “truth in advertising” regulations is a vital part of aiding law enforcement —particularly if the Congress retained oversight over the law to make sure that powerful commercial interests were not able to take advantage of special treatment by industry insiders who come through the revolving door into the agency.

It would also go a long way toward stopping adserving companies from free-riding on the brands of unsuspecting advertisers as well as the life’s work of artists.

As a never ending flood of stories are released almost daily about Google’s influence over the US. government in general and the Federal Trade Commission in particular, it may just be that the U.S. government is so far in the tank with Google that we can not expect the federal government to do its job.

That’s why it is important for Mississippi Attorney General Jim Hood to succeed in at least being able to investigate Google’s seedy business practices.  While the big advertisers have enough of a relationship with Google to get the attention of the Leviathan of Mountain View, the little advertisers in Mississippi represented by the populist Hood will never get a human on the phone at Google to discuss the problem, much less the time of day.

The “little guy” can only turn to their State Attorney General when confronted with Google, a company that averages one meeting a week with the White House.  Crony capitalism and the special interests can only be defeated by sunlight brought by crusaders like Attorney General Hood.

Only Jim Hood and AGs like him can force Google to stop defrauding advertisers and to stop YouTube from pumping jihad into our homes–jihad that Google monetizes.

YouTube Distributes Jund al-Aqsa Video Glorifying Jihadi Suicide Bombers

March 25, 2015 Comments off

Remember when a UK Member of Parliament called out Google for providing material support for the terrorist group Jund al-Aqsa by distributing recruiting and aspirational videos for the group?  That’s right, in the UK House of Commons, Diana Johnson, a leading Labour MP, had quite a lot to say about Google’s involvement with jihadi recruiting:

We recognise, of course, that events in Syria, Iraq and northern Africa are fuelling a rapidly evolving network of inter-related terror groups who pose a real threat to the UK and our allies. It is absolutely right to use all legal measures to try to counter the spread of these groups and to ensure that they cannot establish themselves in the United Kingdom.

In this case, we have two groups with close links to other proscribed groups. Jund al Khalifa-Algeria is an Algerian-based Islamic militant group, linked to al-Qaeda and hoping to establish a caliphate in northern Africa. The group is affiliated to the Islamic State of Iraq and the Levant. Secondly, Jund al-Aqsa or Soldiers of al-Aqsa is a splinter group of the al-Nusra front, and it is just three months since we proscribed JKI—Army of the Islamic Caliphate, another splinter group of the al-Nusra front. In common with the al-Nusra front, the JAA is largely based in Syria, and as a group has attracted many jihadists from outside Syria. JAA started out as a campaign against the Syrian Government, but in recent attacks the group has seemed happy to target innocent civilians….

In this case…there is no need to see sensitive information to conclude that these are terrorist groups. Far from hiding their activities, they are actively boasting about them on social media, using YouTube, Facebook and Twitter to spread images of the most horrendous violence, alongside messages justifying it. These are not groups that want to hide; these are groups that are actively recruiting.

Jund al Aqsa, or Soliders of Al Aqsa, is an al Qaeda ally that frequently operates alongside the Al Nusrah Front, al Qaeda’s official branch in Syria.  And sure enough, here’s the latest and greatest from Jund al-Aqsa distributed by YouTube, a video of of Jund al Aqsa fighter Abu Omar al Kuwaiti detonating at the Al Qal’ah checkpoint in Idlib city:

Who benefits from ad supported streaming? Three guesses.

March 25, 2015 Comments off

What do you pay for when you pay for a subscription to an ad supported service like Spotify or Pandora?  It stops being ad supported.  So who benefits from that?  Fans and artists who hate advertising.  Artists who get a higher royalty rate.

Who doesn’t benefit?

Well, who do ya think?  Here’s a risk factor from Pandora’s SEC filing that gives you a hint:

We rely upon an agreement with DoubleClick, which is owned by Google, for delivering and monitoring our ads. Failure to renew the agreement on favorable terms, or termination of the agreement, could adversely affect our business.

We use DoubleClick’s ad-serving platform to deliver and monitor ads for our service. There can be no assurance that our agreement with DoubleClick, which is owned by Google, will be extended or renewed upon expiration, that we will be able to extend or renew our agreement with DoubleClick on terms and conditions favorable to us or that we could identify another alternative vendor to take its place. Our agreement with DoubleClick also allows DoubleClick to terminate our relationship before the expiration of the agreement on the occurrence of certain events, including material breach of the agreement by us, and to suspend provision of the services if DoubleClick determines that our use of its service violates certain security, technology or content standards.

Here’s an excerpt from Spotify’s website:

Some of our advertising partners may use cookies and web beacons on our site. Our advertising partners are listed below:
– Google AdSense – Commission Junction – Adbrite – Widget Bucks – Kontera – Clickbank – Azoogle – Chitika – Linkshare – Amazon

Of course YouTube has ads exclusively by Google.

And what do these three companies have in common?

Spotify board member Google serving advertising.  Who gets cut off if the ad supported platform goes away?

Gee, who could it be.

And by the way, it’s not just the money which has to be a drop in the bucket compared to Google’s overall revenues.  It’s a loss of control, it’s the loss of Google’s ability to exert its monopoly power over the music industry.

The leading groups representing the crony capitalists and the special interests opposing artists and songwriters are all controlled to one degree or another by Google and Amazon, all of whom are making common cause with the National Association of Broadcasters. Here’s an example of the kind of inside the beltway event these people stage to influence lawmakers in Washington.  (They do it at the state level, too–Google is currently suing Mississippi Attorney General Jim Hood to stop his investigation into Googles shady business practices on drugs and monopolist behavior.)

Inflaming artist, songwriter and major label opposition to ad supported music services plays right into the hands of the National Association of Broadcasters, too.  The rumor is that there will be a performance rights bill introduced imminently in the U.S. Congress that would require broadcasters to pay artists for radio play for the first time in history.

Not surprisingly, the NAB is trying to conflate “free music” on Spotify, Pandora and YouTube with “free music” on radio.  An inapt analogy to be sure, because at least Pandora, Spotify and YouTube pay artists something.  But the NAB senses blood in the water, and so is trying to exploit that message through it’s “Free Radio Alliance.”

The NAB then lists all of its “Alliance Members” by state–but they just list the call letters.  They don’t list the station owners.

It’s the usual suspects–mostly the same people who are simultaneously petitioning the FCC for a waiver on the payola rules.

So let’s not miss the point–piling on the artists and labels wanting to revisit the rates for ad supported music services just helps the crony capitalists and the special interests with over $2 trillion in market cap that are using their political clout to crush creators.  It was revealed this week by the Wall Street Journal that Google averages one meeting per week at the White House.

Have you been to the White House lately?

Artists, labels and songwriters are exercising their property rights to negotiate the terms on which they license their works even though the government forces either artists or songwriters to license to all of these services.  Let’s not lose sight of that.

The people who lose the most from cutting back ad supported music are the people who are supporting the ads.

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