FTC's Internal Memo On Google Teaches Companies a Terrible Lesson

schwit1 writes FTC staffers spent enormous time pouring through Google's business practices and documents as well as interviewing executives and rivals. They came to the conclusion that Google was acting in anti-competitive ways, such as restricting advertisers from working with rival search engines. But commissioners balked at the prospect of a lengthy and protracted legal fight. For a big company, that process may have been enlightening. Agency staffers might find evidence of anti-competitive behavior. But that doesn't mean the firm will face the music in the end. Previous attempts to go after big companies — such as the Justice Department's long-running antitrust case against Microsoft in the 1990s — loomed large in regulators' minds at the time of the Google probe, according to a former official who worked at the agency then. "Even if we were in the right and could win," said the former official, "it could take a lot of resources away from other enforcement."

Comments

Too Big to Nail

[Mycroft-X]

Ah, the efficient use of government resources trumps justice. Must be a first!

Re:Too Big to Nail

[gallen1234]

The efficient use of limited funding. How big a tax increase would you be willing to support to fully fund their operation?

Re:Too Big to Nail

[EmeraldBot]

Ah, the efficient use of government resources trumps justice. Must be a first!

Realistically speaking though, the FTC is understaffed as it is, and what resources they have are stretched. A lawsuit against Google is going to be a very long, costly affair, and it would ultimately come down to a battle of attrition. Even if the FTC won, what would change? They would just appeal the decision, and if they won, there goes however many millions down the drain, along with a huge reputation hit. Google can easily fund any such fight; this part of the government cannot. It's a pretty sad day when a corporation of our society has more wealth than the representation of society itself.

Re:Too Big to Nail

[gstoddart]

You mean all those corporate tax cuts which were handed to them which was supposed to trickle down to the rest of us?

Sorry, but bitching about the tax increases on corporations which would be required to enforce the law against those same damned corporations is absurd.

It's the years of giving corporations tax breaks and loop holes which is why there isn't sufficient tax base for this stuff.

How much money does Google and other large corporations effectively launder through international loopholes?

And how much money are the wealthy politicians hiding, and how much tax breaks have been given to the wealthy -- again, under the lie that it would trickle down to the rest of us.

Thirty years of tax policy has only served to make the corporations and the wealthy have even more money, while the rest of us starve ... and now we bitch that those tax cuts have made it impossible to apply the fucking law.

Just bloody awesome.

Welcome to the fucking oligarchy, kiddies. It's all downhill from here.

Eat the damned rich, and stop pretending that lining their pockets helps the rest of society.

Unfortunately it's greedy rich assholes, under the payroll of greedy rich corporations, who pass the laws -- laws designed to line the pockets of greedy rich assholes.

Re:Too Big to Nail

[Lunix Nutcase]

No, more like purposefully underfunded and understaffed agency can't afford enforcement against megacorps.

Re:Too Big to Nail

[Lunix Nutcase]

So it's okay to use your large marketshare to be anti-competitive as long as your Google?

Re:Too Big to Nail

[IamTheRealMike]

Ah, the efficient use of government resources trumps justice. Must be a first!

You're assuming that whatever a few FTC staffers think up and write down in an internal report is "justice".

That's not justice. That's the divided opinions of a few bureaucrats.

The reason the FTC would have had to spend a lot of time and money on an anti-trust case against Google is the underlying laws are vague and the arguments subtle and complex. Google would have mounted highly effective counter-arguments and there would be no guarantee of winning the case. If the case was won, what then? The FTC's goal is to try and improve the market, or so they say, but winning a court case doesn't automatically fix anything. And if they lost, questions would have been asked about why they weren't using those resources to pursue clearer cut issues.

Re:Too Big to Nail

[Hussman32]

We could fund it the same way we fund class action lawsuits: By giving the lawyers a big slice of the penalty if they win, and nothing if they lose. That way Google would end up funding their own prosecution, and no tax dollars would be needed.

I'm not sure paying the lawyers more will help anything, tort law is already the cause of more problems than it solves.

Re:Too Big to Nail

[Anonymous Coward]

And how much money are the wealthy politicians hiding, and how much tax breaks have been given to the wealthy -- again, under the lie that it would trickle down to the rest of us.

The big deceit about trickle-down economics is the promise that what trickles down would be green, not yellow.

Re:Too Big to Nail

[jythie]

Prosecuting something like this involves hiring more people and paying 3rd parties for various services related to the action. Basicly, they lack the manpower to fight something like this. They are already doing their jobs, which means they can not easily do extra jobs in addition to it.

Re:Too Big to Nail

[Damarkus13]

No, the Federal budget is about 35% of GDP. The only event that caused it to break 50% was WWII, and the only event since then that caused it to break 40% was the bailouts.

This is why markets are not a good model for govt

[blue trane]

The government should not be constrained by market assumptions, such as that resources are limited because of efficient allocation. The government operates on principles, such as unalienable rights, that markets do not value.

Cost of Enforcement v.s. Benefit to Society

[Aero77]

This is a universal truism that fits to all law enforcement actions. If a crime is too common to police universally, the law will be applied selectively. If you could convince every defendant of a specific crime to fight the charge in court, that would influence the prosecution of that crime. While every prosecutor would pursue crimes that have an obvious harm to society, prosecution of 'victim-less' crimes would drop off in the face of consistent & vigorous defense. The 'law & order' works because most defendants don't aggressively defend themselves in court.

Re:So like the banks and Wall Street

[Anonymous Coward]

The solution would be a step closer to Fascism, by hiring more police to be able to handle the bigger or more numerous cases. This closer to something like a step towards an Oligarchy or the natural result of an unrestricted free market.

When companies make more money than countries, they become pan-national entities that wield just as much power with less responsibility (don't have to mandate legal system, defense, social security, etc.). In an interesting result, this gives more reason to support a progressive taxes and an increase in minimum wage, to remove power from the top and give it to the workers (low / middle class) just on principle instead of some economic ideology.

Re:Too big

[gweihir]

I do not think that crash can be averted. Too many people with power do not have any common sense. Eventually, that ends a culture. History is full of examples.

Too Big To Face Justice

[QuietLagoon]

Why are corporations now free to act above the law?

Re:Too Big To Face Justice

[thegarbz]

Oh don't worry it's not just the corporations. Politicians and rich people are above the law too.

I can help

[fyngyrz]

You mean all those corporate tax cuts which were handed to them which was supposed to trickle down to the rest of us?

Trickle down economics carefully explained

Re:I can help

[lucien86]

The really scary thing is when you do the long term extrapolation.. In fifty years the whole world will be roughly equal - a global equal third world of poor. Democracy will be even more irrelevant than today, everyone will be poor and powerless, and a tiny super ultra-elite will rule the world and own everything..

The third world is a true capitalist society, no one gets anything they don't pay for - healthcare, school for children, social justice, police protection from crime, food or shelter on destitution. The poor will go back to being expendable, beggars, or forced to steal to live, or for the most part dead. That is the ultimate long term direction of travel and maybe the desired aim, to create a global paradise for themselves by killing most of us.. starving us out - and it will be totally legal. The Capitalist Globalist version of Pol Pot...

Here we go

[ArcadeMan]

After the banks and car companies which are "too big to fail", we've got Google/etc which are "too big to sue".

U.S.A., land of the free*

* if you have enough money

Re:This is why markets are not a good model for go

[Cyberdyne]

The government should not be constrained by market assumptions, such as that resources are limited because of efficient allocation.

That's not a "market assumption", it's plain old reality: resources are finite, so you need priorities. If a cop pulls someone over for speeding, then sees an armed robbery in progress, or a paramedic is treating someone's sprained ankle then a bystander has a heart attack, do you want them to stick to what they were doing and reject the notion of priorities as being a "market assumption"? I'd rather they focus their efforts on the higher priority, because that gives the best outcomes.

In this case, the FTC had more pressing enforcement jobs, like telemarketing scams, the fight with cellphone companies over ripoff premium services ... they felt putting their resources there made more sense than fighting Google over the order of search results, and I'm not at all sure they were wrong about that.

By coincidence, I was discussing law enforcement priorities at work on Friday (we teach computer forensics for law enforcement, among other things); unlike the world of CSI, real law enforcement doesn't go spending days testing out an obscure theory, or digging into every possible detail of each case: they do enough work on a case to pass it to the next stage, then get on with the next case. No "market" - there just aren't an unlimited number of hours in each forensic caseworker's day.

I call BS..

[fred911]

None of the linked articles state any charge of breaking the law. Looks like regulators have done an in-depth investigation and found no evidence and have used the media to cover their ass. All we see are accusations that their shopping search engine used to (or may had have) rank results that they participated in higher, and they had captive agreements with business partners. But where are the specific charges and evidence?

  The links states " Google was acting in anti-competitive ways". Leads one to believe that that is not the current situation. With new technology (wonder why we have such long beta services) errors will be made, it's the companies responsibility to create the highest RIO it can. Specifically speaking, if I run a shopping service wouldn't I want to present the most profitable product first? If I am not participating how will I assure future survival and with a publicly traded company, how does this protect the investor?

  I don't buy excuse that they are too scared to litigate or prosecute a violation of law. If it's true, the regulatory agency needs to be replaced, isn't their primary function to uphold the law?

  Recent media coverage seems like, "Hey boss we took the whole fleet fishing for the past few months, spent a bunch of money and came back with an empty hull". The recent media coverage seems like smear to me.

Re:I call BS..

[ckatko]

People here love to hate Google, but they never bother to list any facts. Meanwhile, just five years ago, (see Internet Archive) everyone here was wishing Google would do anything and everything. They wanted more, more, more.

I've seen zero changes in their policies. But now, they've somehow become the devil--even while trying to protect Net Neutrality and gay rights.

Meanwhile, Microsoft is still shipping broken software and walling in UEFI, Apple is the North Korea of software platforms, and Canonical keeps trying to change the face of Linux by tossing out their existing userbase (Nintendo Wii anyone?).

But let's focus on Google. After all, I'm forced to use their products. Oh wait, no standard anywhere requires me to use their services at all. Isn't it terrible how we're required to use Google Drive over Dropbox to get a job? Nope. Isn't it terrible how we're required to use Google over Bing when we ship a PC? Nope. Isn't it terrible how we're required to use Google Docs over OpenOffice when we make a contract? Nope. I believe the answer you're looking for was Microsoft, Microsoft, Microsoft.

Re:I call BS..

[chowdahhead]

According to the WSJ article, it seems that Google has been willing to compromise on the main concerns that FTC staff raised, and modified some of their business practices as a result. There's nothing egregious remaining that would warrant a Federal lawsuit and that's why it was dropped. I think the EU also spent something like 4 years investigating Google and has found themselves in the same position. That's why some are calling for Google to be a regulated utility, which is completely ludicrous, but it would allow them to circumvent the process that they feel stuck in now.

Wins and fines vs justice

[perpenso]

This portion of the gov't does not work on a market model, it works on a revenue generation model. What generates more revenue, having staff go after mega corporations that can afford to defend themselves or much smaller businesses that can not?

So many problem in business and government exist because the incentives/rewards are screwed up. In business school there is a recurring lesson that shows up in many varied topics. You don't get what you ask for. You don't get what everyone agrees is right. You get what you reward. So if you reward a gov't bureaucrat based on win/loss ratio and/or fines generated you will not get justice, you will get wins and fines.