Google versus Orrin Hatch
The senator is right to demand a renewed antitrust investigation of the tech behemoth
Every twenty years or so, a major antitrust case reshapes the business landscape, curbing the inevitable excesses of the dominant corporate players and allowing the next generation of innovators to be born.
So, it’s worth noting three things in this edition of Swamp Notes.
First, Tuesday is Google’s 20th birthday. Second, Google founders Larry Page and Sergey Brin might want to send a slice of cake to Bill Gates, since it was arguably the US v Microsoft antitrust case 17 years ago, in which Microsoft was ultimately disallowed from bundling Windows and Explorer, that allowed their search giant to become the behemoth that it is today. Had Microsoft been allowed to dominate the burgeoning internet ecosystem back then the way Google dominates search today, then we might not have reached my third point — which is that Republican Senator Orrin Hatch is right to call for the re-opening of the Federal Trade Commission's antitrust case against Google from 2013.
As anyone who read the original leaked documents from 2012 knows, the case — which was dismissed by the FTC — was a close call to begin with. Key FTC staffers wanted to sue the search giant, and no wonder — many of its top brass, like chief economist Hal Varian and former executive Marissa Mayer, come off as being quite happy to prioritise Google over competitors in ways that are anti-competitive. While the case was ultimately dismissed, there are many sources I’ve spoken with who feel that was down to Google’s lobbying power in Washington.
Hatch’s call for a reopening of the case will undoubtedly be politicised, thanks to President Donald Trump’s big tech witch hunt. (The President is, no surprise, muddying the waters by accusing the search giant of burying conservative news.) But Hatch’s call is legit. For starters, he cites Democratic colleagues' calls for investigation, as well as bipartisan letters from state attorneys-general. Hatch himself is well versed in antitrust issues, having been one of the Microsoft agitators way back when, and has had tough exchanges with former FTC chair Edith Ramirez over Google.
What’s more, Roger McNamee, the high-profile tech investor who has been pushing for regulatory action against the large platform firms in the wake of the 2016 election manipulation scandal, tells me that he had a meeting with Hatch this past March to discuss monopoly and antitrust issues surrounding Google, Amazon and Facebook — well before the president began his latest rounds of tweets. “I am totally convinced of Senator Hatch’s sincerity in this effort,” says McNamee. “He was super-animated and engaged during our meeting. He’s not in this to serve Trump.”
McNamee himself is a liberal, and still holds a fair number of shares in Facebook, so it’s not in his interest to push for Big Tech regulation, yet he does. (I can’t wait to read his upcoming tell-all book, Zucked: The Education of an Unlikely Activist, out from Penguin in February 2019.) He has also been in the game for over 40 years. When he talks, I listen.
Swampians, I can honestly say that I never thought I’d be writing anything in praise of Orrin Hatch. But regulating Big Tech isn’t political — it’s economic. Or at least it should be. Alphabet chief executive Larry Page has been invited to appear this week before the Senate Intelligence Committee, along with Facebook's chief operating officer Sheryl Sandberg and Twitter's Jack Dorsey to answer further questions about Russian election meddling. Google wanted senior vice-president of global affairs Kent Walker to go, but the Senate is holding out for Page, who is unlikely to show.
This seems to me incredibly wrong-headed. If the Democrats take Congress in the fall, privacy and election meddling investigations will be a much bigger deal than they are now. But even if they don’t, the fact that antitrust is becoming a bipartisan issue is something for Silicon Valley to pay attention to. (I look at the particulars as they relate to Amazon in my own column this week.)
Google is in danger of taking over from Facebook as the most vilified tech firm unless its leaders start engaging more transparently. My birthday wish for Larry and Sergey is that they wake up and come out of the Googleplex.
Rana recommends
To really understand the way in which Google and other platform tech firms are, and are not, culpable for algorithms that spread extremism and propaganda, check out this extremely illuminating Wired piece. Trump is wrong — Google doesn’t have evil geniuses in some tower suppressing conservative voices. But like every tech firm, they have their algorithmic biases, and the key bias is that the system is designed to keep you looking at whatever you are looking at for longer. It’s about monetising your attention, and that can lead to the spread of fake news, toxic content, etc, if indeed it’s the sort of thing that keeps you reading.
Charles Ferguson, the film-maker behind the terrific Wall Street documentary Inside Job, which looked at the evolution of the 2008 financial crisis, has a new movie, Watergate, which premiered at the Telluride Film Festival last Friday. It will be coming to the History Channel in early November. Timing is everything and I can’t imagine a better time to watch a documentary about a corrupt president who implodes.
And in the Financial Times, my colleague Gillian Tett, who was one of the great seers of 2008 and an expert voice in Charles’ first film, tells us whether we have, indeed, learned the lessons from the financial crisis as we come up on its 10th anniversary.
Edward Luce responds
Rana, I'm so behind on the Google antitrust issues and that I had to Google it on, er, Google. It came up with the following three top stories: Trump says Amazon, Facebook, and Google represent “a very antitrust situation” (The Verge); Trump says Google, Amazon, and Facebook may be “very antitrust” but stops short of calling for break up of the firms (Business Insider); and, After Trump Rants, Top GOP Senator Asks FTC to Re-open Google Antitrust Probe (Gizmodo).
I have two instant reactions. First, I have never heard of a “very antitrust situation” before and I eagerly await Trump's elaboration. I suspect that means more sabre-rattling.
Second, Hatch's timing is interesting. Your note makes a strong case for why the FTC investigation should be reopened — and I agree. But I want to know more about Hatch's motivations. If you get an interview with the senator, could you bring me a long as a second fiddle? I will shroud my scepticism with courtesy.