Google vs. the World

Google is battling law enforcement in the U.S. and around the world on three different legal battlefronts: antitrust, privacy and property. Why is it only Google that is under serious law enforcement investigation for so many different serious infractions in so many countries around the world? According to a top Google lawyer, “Google’s leadership does not care terribly much about precedent or law” per Stephen Levy’s book In The Plex. That very rare scofflaw attitude, combined with the vast amount of evidence cataloged below, strongly suggests Google is not the innocent victim it claims to be, but a dominant perpetrator of systematic violations of law around the globe.

Only Google is battling law enforcement around the globe with the defiant stance that:

  1. Google is not a search advertising monopoly and has no special obligations under antitrust law;
  2. Google’s new privacy policy consolidation with no opt-out choice is not a monopoly “take-it-or-leave-it” ultimatum to users; and
  3. Google’s not-so-subtle public threats to use Motorola’s essential standards patents to defend Android from non-standardized property rights claims of competitors is not anti-competitive.

I. Google Is Currently Battling Antitrust Probes on Five Continents: In March or April, the European Union is highly likely to rule that Google is a monopoly and then lay out Google’s alleged specific violations of antitrust law in a detailed antitrust Statement of Objections.

Tellingly on the other side of the globe, the South Korean antitrust authority (KFTC) is currently considering obstruction of justice charges and a maximum fine of Google because Google allegedly knew that a South Korean antitrust raid was coming and Google deleted all locally-accessible-relevant files and cut the office’s Internet access so no relevant documents in the Google cloud could be accessed by investigators. The next day after the initial raid, Google ordered all non-lawyer Google employees to work from home so investigators could not get access to the information they were seeking, all while Google claimed to be cooperating with the antitrust investigation.

Recently competitors in India and Brazil have filed antitrust complaints against Google. That is on top of formal antitrust investigations of Google — by: the European Union (Germany, UK, France, & Italy complaints); the United States (FTC, DOJ, Texas, California, New York); South Korea; Argentina; and Australia – into Google’s predatory practices of leveraging of its search advertising dominance to self-deal and rank Google-owned properties #1 in searches, while penalizing and burying Google’s vertical search competitors in Google results where they are not likely to be found by users.

In the U.S., the Senate Antitrust Subcommittee sent the FTC a strong bipartisan letter calling for a broad substantive antitrust investigation of alleged anti-competitive behavior by a dominant company affecting a wide swath of the economy. The letter is clear that the Subcommittee was unconvinced of Google’s claims it is not a monopoly and has no special obligations of a dominant company with market power.

Google’s ignominious antitrust history in the U.S. is important context here. Only Google has seriously clashed with U.S. antitrust authorities in each of the last four years. In 2008, DOJ had to threaten a criminal Sherman Act Section 2 anti-monopolization case against Google in order to block the illegal proposed Google-Yahoo ad Agreement. In 2009 and 2010 the DOJ twice opposed the proposed Google Book Settlement (GBS); and in 2011, Federal Judge Chin ultimately blocked the GBS for trying to establish an illegal monopoly. (It is noteworthy for the global context that the German and French governments both opposed the GBS.) In 2009, the FTC forced then Google CEO Eric Schmidt off of Apple’s board because it was an anti-competitive inter-locking-directorate arrangement. In 2010, Google and other companies settled with the DOJ over illegally and anti-competitively colluding to keep competitors from poaching Google’s employees. Google is now subject to a private class action suit based on Google’s admitted anti-competitive collusion. Finally in 2011, Google entered into a court-supervised consent decree to mitigate the anti-competitive effects of the proposed ITA acquisition. In a word, Google has an unprecedentedly bad global antitrust track record.

II. Google’s Currently Battling Privacy Concerns on Four Continents: Google’s new consolidated privacy policy consolidation, without an opt-out choice for users, has prompted concern by regulators on four continents that the policy is a monopoly “take-it-or-leave-it” privacy policy that ill serves users. Tellingly, the European Union (representing 27 countries), requested that Google delay its March 1st implementation of its new privacy policy to learn if it in fact complies with EU law, but Google quickly and summarily refused to comply with the EU request.

Joining the EU in globally investigating this new privacy policy are: Ireland, the Netherlands, Australia, South Korea and the U.S. In the U.S., Privacy watchdog EPIC, has sued in Federal Court that the new Google privacy policy violates the FTC-Google-Buzz privacy settlement for misrepresenting its privacy policy changes and not getting “affirmative consent” from users first, given that there is no opportunity to opt-out other than to drop all Google services. The Federal Court involved here is expediting the case. In effect, Google has issued a de facto privacy enforcement ultimatum to regulators around the globe – stop us if you can.

Once again Google’s past ignominious privacy history with law enforcement around the globe is highly relevant here. No other entity has prompted more privacy concerns and official privacy investigations than Google has. For example, there have been at least seventeen country or regional law enforcement investigations of Google Street View’s unauthorized wiretapping of tens of millions of home WiFi routers in dozens of countries over a period of three years. See evidence from: U.S., Canada, EU, Czech, France, Germany, Hungary, Italy, Spain, Sweden, Switzerland, UK Hong Kong, South Korea, Japan, Australia, and New Zealand.

III. Google’s Patent Enforcement Strategy Has Generated Official Transatlantic Concerns: We know from the U.S. DOJ and EU’s approvals of Google’s acquisition of Motorola, that they have going forward serious concerns that Google may abuse Motorola’s patents in the ongoing tech patent wars. The DOJ said: “how Google may exercise its patents in the future remains a significant concern.” The EU Competition Commissioner Joaquin Almunia echoed that same concern: “This merger decision should not and will not mean that we are not concerned by the possibility that, once Google is the owner of the portfolio, Google can abuse the patents linking some patents with its Android devices.”

What this means simply is that both the DOJ and the EU, given Google’s twice publicly stated threats to defend Android with Motorola’s patents, are concerned that Google could try and anti-competitively abuse Motorola’s hundreds of standards essential patents for wireless and WiFi — that have been and must be competitively available on fair, reasonable and non-discriminatory (FRAND) terms — to defend Google against non-essential or non-standard patents/innovations that Apple and others use to legally competitively differentiate their products and services in the marketplace.

What most have missed in this investigation is that Google is vulnerable to more antitrust enforcement and patent litigation concerning non-essential/standard patent claims from Apple, Microsoft, Oracle and others, because Google unlike, Apple and Microsoft, has not agreed to not use Motorola’s essential patents to hold up competitors on non-essential patents that legally competitively differentiate competitors offerings. This is a huge and much under-appreciated property/antitrust vulnerability that both the DOJ and the EU are watching closely going forward.

Concerning the global nature of this issue, it is noteworthy that the DOJ statement indicated that it cooperated closely on the Google-Motorola transaction and its patent implications with the European Commission, “the Australian Competition and Consumer Commission, Canadian Competition Bureau, Israeli Antitrust Authority, and the Korean Fair Trade Commission.” This indicates there is law enforcement concern on five continents that Google could try and anti-competitively leverage Motorola’s standards essential patents covering wireless and WiFi technologies.

(Another relevant point of context here is Google’s strong and vocal opposition to U.S. legislation to strengthen law enforcement against online piracy.)

IV. Conclusion:

In sum, if a company’s leadership is well-known internally for not caring “terribly much about precedent or the law,” it’s not surprising that such a multinational would be under law enforcement investigation the world over for so many different violations of law. The evidence above indicates Google is no victim. It indicates Google is a global scofflaw with willful blindness, that philosophically disagrees with much of the world’s laws on privacy, property and antitrust, and that chooses to largely operate its business by its own rules rather than the rule of law.

Even Google’s most ardent defenders who try and argue that Google: has done nothing wrong; is not a monopoly; respects users’ privacy; and respects others’ property rights; must increasingly feel like cleanup patrol following a parade of elephants. The sheer global breadth and depth of law enforcement investigations of Google, over a period of many years, suggests a company that considers itself above the law.