Music Technology Policy

[Editor Charles sez:  This post first ran on December 17 before the FTC let Google off the hook. and we though it was worth another read.]

When a chicken is placed on an electrical grid inside a cage and shocked repeatedly, it begins to get the idea that no matter where it stands, no matter how high it jumps, no matter where it lands it cannot escape the pain of the electrical shock.

And eventually it stops jumping and just takes the shock.

This is called learned helplessness in which resistance is futile.  It’s also the state of mind that a massive tech oligarch would like to produce in the minds of those who oppose them to the point that the average person would say something like, why do you complain about Google?   You really need to get over it, I’m writing as a friend.

I happened to notice that news of Lindsay Lohan’s most recent brush with the law came on the same day as news leaked that Google may have avoided yet another prosecution by the Federal Trade Commission and would get a wrist slap in America for what will likely be a vigorous prosecution in the European Union for largely the same bad behavior.  This would be the same Federal Trade Commission that saw nothing criminal in Google sending thousands of cars with Wi-Fi sniffers around America under the guise of taking pictures of the people’s houses and posting them on the Internet.  Which was worse, openly invading your privacy by posting pictures of your house online, or secretly capturing unprotected Wi-Fi data.  The fact that they got away with both contributes to the sense of powerlessness that Googlers so crave.

But let’s not jump to conclusions.  Google’s back room deal with FTC Chairman Jon Leibowitz is still just a rumor and may be overstated, so let’s not overreact.  We have to assume that given Google’s well-known political influence, the truth may end up being that FTC Chairman Jon Leibowitz merely offered to slap his own wrist.

This would be the logical next step in the government’s handling of Google—after all, according to Google’s lawyer Boris Feldman, the Justice Department apologized to Google for a perfectly normal “crime doesn’t pay” speech by the U.S. Attorney for Rhode Island.  This interview followed the announcement that Google avoided indictment by a Rhode Island grand jury and paid a $500,000,000 fine for violations of the controlled substances laws.  The U.S. Attorney’s statements were perfectly normal for a prosecutor concluding a years-long grand jury investigation of a major corporation in which over 4 million documents were produced that proved that the company was shot full of bad actors—and paid the highest corporate fine in US history.  If there was anything unusual about it, it was that the speech was not made by the Attorney General of the United States.

Google, it appears, enjoys a kind of sovereign immunity—it apparently must consent to be prosecuted before it can be indicted and then those charged with enforcing the law let them go on their way like a stoned once-beautiful actress charming a cop after committing mayhem on the highway.

The joke about Lindsay Lohan is whether she’ll get incarcerated for 5 or 10—minutes.  This example of celebrity justice is particularly timely given the high degree of government interest in protecting Google.  The FTC’s celebrity justice includes corporations and their executives.  If the FTC fails to prosecute Google, what Chairman Leibowitz is teaching us is straight out of Animal Farm–that some animals are truly more equal than others.    And those who are in the tech industry oligarchy that Eric Schmidt defined as the Gang of Four—you know, giving a cartel a name without regard to the consequences—are most equal of all.

I attended last year’s Senate Antitrust Subcommittee hearing on Google’s abuse of its dominant market power.  Senator John Cornyn questioned Mr. Schmidt about Google’s nonprosecution agreement with the Department of Justice—you know, the one that the DOJ apologized about.  Mr. Schmidt told what I believe Mr. Schmidt had to know was a well-rehearsed lie—that the terms of the nonprosecution agreement prevented him from discussing it publicly.  In other words that the nonprosecution agreement was a secret.

This is false.  It is not only false, it is unambiguously false.  Senator Cornyn evidently knew it to be false–as did most of the visitors in the committee room by the rustle of whispers–and questioned Schmidt more closely about it.  After consulting with his lawyers arrayed behind him at the witness table, Mr. Schmidt declined to answer on the advice of counsel.  He did not use the words “I take the 5^th” but he came as close to it as I’ve ever seen.  This did not go over well with the committee.  (And was largely suppressed in the mainstream media.)

And yet, when Schmidt walked out of the committee room, what I could see that the Senators could not was the smirk on Schmidt’s face and his lawyers—because he had gotten away with it one more time.  Given the sharp letter that Senators Kohl and Lee subsequently wrote to the FTC, I don’t think he fooled anyone on the Subcommittee although he was smirking like he’d really put one over on the Senators.

But apparently, Google can still strut its stuff to get away with it and the FTC and the DOJ political appointees just fall right in line. And don’t think this criticism is partisan–it’s not.  However biased Google is toward the left, they are quickly catching up on the right by talking out of both sides of their mouth.

So like Lindsay Lohan, Google appears to have gotten away with it.  This time.  But here’s some free advice from someone who knows about what the famous can and cannot get away with.  It’s not that they can always get away with it, it’s just that they have to do something really bad before the system will prosecute them.  Or they have to have a run in with Judge Judy.

And given what we know about Google, I feel very confident that Google has already done this really bad thing.  It’s only a matter of time until they find their Judge Judy.  Or a prosecutor like Rudy Giuliani.  Remember–if you’d told a room full of MBAs in 1985 that in a few years time Drexel would be bankrupt and Milken would be in prison, you would have been laughed out of the room.  Just like you would be now if you told a room full of computer science students that in a few years time Google will be bankrupt and Eric Schmidt will be in prison.  And that RICO would get both of them.

So don’t allow them to let you drift into that ennui of learned helplessness.  Google are not immune and we still live in a country of laws.  Even if it doesn’t look that way all the time.  Even if Leibowitz is slapping his own wrist, the Senate Antitrust Subcommittee is not.

But for today, be concerned about Jon Leibowitz’s self-inflicted wrist bruising and remember that nothing says Internet Freedom like getting away with it.

If  you let it.

If you’d like to comment on the Google investigation, you can contact the FTC:

Questions or Comments about Antitrust Issues

Contact the FTC’s Bureau of Competition, and please include your day-time telephone number.

• Email: antitrust@ftc.gov (Note: Email is not secure. Mark confidential information “Confidential” and send it via postal mail.)
• Mail: Write to:
  Office of Policy and Coordination
  Room 7117
  Bureau of Competition
  Federal Trade Commission
  601 New Jersey Ave, NW
  Washington, D.C. 20580
• Phone: (202) 326-3300