What’s Google’s innovation secret? “The best innovation challenges authority and challenges the way in which systems work,” said Google Executive Chairman Eric Schmidt recently per the Washington Post.
What’s the secret to Google’s innovation differentiation? “Google’s leadership does not care terribly much about precedent or law” admitted a top Google lawyer in Stephen Levy’s book In The Plex.
What’s the secret to the pace of Google innovation? “Larry and Sergey believe that if you try to get everybody on board it will prevent things from happening…” “If you just do it, others will come around to realize they were attached to old ways that were not as good. . . . No one has proven them wrong—yet;” – said Terry Winograd, Stanford professor and mentor to Google’s co-founders, per Ken Auletta’s book “Googled.”
What do these “infringenovation” secrets tell us about Google?
It is all about data. Google has a unique mission to organize the world’s data because Google was the first to figure out the Internet’s dirty little secret: that the Internet is essentially the ultimate recording and copying device. Most all Internet data can be captured, stored and analyzed – but only if one is willing to infringe on people’s property and privacy without their permission to do so, and only if one is also able to create the omnifarious products and services necessary to collect most all forms of Internet data. Moreover, the world’s most valuable data is naturally data in which others have invested legal property protection or is private data that could render a user vulnerable to someone else.
Thus, Google takes its well known “innovation without permission” ethos quite literally. Simply, the secret of Google’s unprecedented market power is that Google is both willing and able to mass-infringe others’ private data without the owners’ permission more than any other company.
By design, Google’s monopolistic “infringenovation” breaks the rules of the game (property rights and fair representation to users) for anti-competitive advantage, as no one can win a game where one competitor regularly cheats while other competitors play by the rules of the game. Google’s “infringenovation” model is in stark contrast to the competitive innovation model that is played by the competitive rules of the game, including respect for property rights (patents, copyrights, trademarks, trade secrets), and no deceptive privacy practices.
As Google’s Chief Scientist indicated above, Google’s “innovation” dominance really stems from having the most data, not better algorithms. The DOJ Antitrust Division agrees with this insight, stating in its objections to the Google Book Settlement: “The seller of an incomplete database… cannot compete effectively with the seller of a comprehensive product.” Google gets the unbeatable monopoly advantage here, by being first to aggregate the most data in all forms by whatever means necessary and then excluding competitors from that uniquely complete database.
Let’s review some of the data Google has aggregated that law-abiding competitors cannot.
First, Google’s has copied 15 million books without the permission of rights holders over the last seven years for its search index database to create a more “comprehensive product” and provide invaluable data to improve search, language translation, and artificial intelligence. This most comprehensive book data of the world’s literature is unavailable to any competitor. The world’s authors, publishers, the DOJ and a Federal Court have opposed this mass infringenovation as unlawful and monopolistic.
Second, Google bought YouTube fully aware that YouTube was massively infringing on video copyrights (see Viacom-YouTube Statement of Undisputed Facts). Google’s condoning of mass copyright infringement made YouTube into the second largest generator of searches in the world. As the world’s most comprehensive video dataset, it has been central to Google’s video innovation advantage, facilitating improvements in search, translation, video conferencing, sharing, etc. Competitors are excluded from this uniquely comprehensive video dataset. If the Supreme Court agrees with the Google executive that called YouTube a “video Grokster,” and finds its 9-0 Grokster decision precedent to be analogous to Google-YouTube, Google’s mass infringenovation will be ruled unlawful.