ICYMI: Campaign To Regulate Leading Tech Services Is Driven By Competitors, Not Consumers
Last Friday, Bloomberg Quint’s profile of News Corp CEO Robert Thomson highlighted the campaign against America’s leading tech companies by a company that also competes with them. News Corp’s new platform, News IQ, was launched last year and boasts an audience of over 140 million.
We’ve said tongue-in-cheek that the tech competition policy debate often ends with the observation, “Look at all those monopolies, competing against one another.” We may need to revise that to: “Look at all those monopolies, competing against one another and against those who cry monopoly.”
News Corp, a longtime force in the advertising market that now competes and partners with tech services, is a member of Digital Content Next, which itself competes in the market with its TrustX ad platform, while simultaneously campaigning against America’s leading tech services with misleading studies. News Corp is also a member of News Media Alliance, which, unlike its local media association counterparts, is seeking an antitrust exemption to form a negotiating cartel.
News Corp isn’t alone. Competitors in cloud and search follow similar playbooks. Tech markets are defined by low barriers to entry, zero-to-low-switching costs, and multihoming, making them ripe for new entrants and disruptive competition. Competitors have plenty of market opportunities, but tend to complement it with campaigns to regulate or break up.
News Corp Lobbying Effort Contends Monopoly, While It Competes With Tech Services
News Corp CEO Robert Thomson’s Criticism Of Leading Tech Services Has Been Contradictory And Misguided For Years. “The last time Thomson fired such public shots at Google in 2014, he was championing an EU antitrust case even as his organization was editorializing against such enforcement. Now he’s launching an ad service, while claiming the very market News Corp. is entering isn’t competitive. Reality has a funny habit of getting in the way of News Corp. talking points.” (Ed Black, “News Corp. Enters Competitive Advertising Market, While Denying It Is Competitive,” Huffington Post, 5/24/17)
FTC Economist Seth Sacher: Antitrust Exemption For Publishers “Is An Appeal To Protect Competitors, Not Competition.” “Mr. Chavern claims that U.S. antitrust laws are ‘designed to promote fair competition and prevent consolidation.’ This is incorrect. U.S. antitrust laws are designed to protect consumers. His call to allow news publishers to ‘get together and agree to withhold their product’ is an appeal to protect competitors, not competition. The current antitrust statutes are the best avenue for policing any conduct by the tech giants that creates or preserves a monopoly. Using declines in the newspaper industry, trends that long predate the likes of Google and Facebook, doesn’t justify turning antitrust from this well-grounded objective.” (Seth Sacher, “Antitrust Exemption Not an Answer for News,” Wall Street Journal, 3/4/18)
Competitors Of Leading Tech Services Have A Long History Of Asking The Government To Protect Them
Oracle Funds And Controls FairSearch, An Organization That Claims To Represent Google Search Rivals And Is The Lead Antitrust Complainant In Europe, Per POLITICO Report. “Oracle and Naspers, two of the world’s largest tech companies, control a nonprofit group that is the main complainant in a landmark European antitrust inquiry against Google, according to documents obtained by POLITICO. The two companies hold legal authority over FairSearch, an organization that filed the first antitrust complaint in 2013 against Google’s Android mobile operating system, according to regulatory filings with Belgian authorities. FairSearch says it represents Google rivals concerned with the search giant’s alleged illegal conduct in Europe. But records filed with Belgian authorities indicate that, in fact, executives from Oracle and Naspers are the group’s only members with legal authority over its activities.” (Nicholas Hurst And Mark Scott, “Oracle And Naspers’ Stealth Lobbying Fight Against Google,” POLITICO, 2/16/18)
The International Center For Law & Economics Found Yelp’s Campaign Falls “Woefully Short” Of “Evidentiary, Economic, And Legal” Evidence For A Successful Antitrust Case. “Yelp, represented by the study’s authors, may find fault with Google’s search results because they would prefer something they perceive as better for Yelp. But in terms of the evidentiary, economic, and legal prerequisites for converting such a preference into a successful antitrust case, the Wu, et al. study falls woefully short.” (Geoffrey Manne, Ben Sperry, And Kristian Stout, “A Critical Assessment of the Latest Charge of Google’s Anticompetitive Bias from Yelp and Tim Wu,” SSRN, 8/19/2016)
IBM Is Throwing Its Support Behind Laws That Would Hinder Google’s And Other Leading Tech Services’ Growth. “Basically, technology old-timer IBM doesn’t exactly mind seeing laws passed that make it harder for Google and other internet whippersnappers to rake in money. Dealing with the rise in web applications and online services has been a particularly painful adjustment for Big Blue to make, as the US corp only recently broke out of a five-year stretch of declining sales growth, and is still in the midst of restructuring its business around cloud and online services.” (Shaun Nichols, “We Should Pass Laws To Make Google’s Life Hard! Oh No, Sorry, Did We Say That Out Loud? Asks IBM,” The Register, 3/1/18)
Economist Tyler Cowen: Most Complaints About The Technology Sector Are Coming From Facebook’s Media Competitors. “American consumers are pretty happy with the status quo. A lot of the discontent I see comes from media companies, which compete against Facebook, and very often are losing.” (Tyler Cowen And Luigi Zingales, “Are Google And Facebook Monopolies,” Chicago Booth Review, 1/22/18)