Setting The Record Straight: NYT Magazine Recycles Old Arguments By Google’s Competitors
The New York Times Magazine dug up decade-old complaints to relitigate a multi-year investigation by the FTC where all Commissioners ultimately ruled in 2013 that Google’s search engine design benefited consumers, dismissing the claims. This ruling aligned with recommendations of the FTC’s staff economists as well as expert consensus.
The Magazine pushes for American policymakers to take radical action to break up Google, justified by a revisionist approach to the history of antitrust. It assumes antitrust cases have lead to new technologies, whereas in reality, innovative companies have displaced old ones. For example, Microsoft’s own executives acknowledge it failed to innovate. Further, its comparison to the breakup of Standard Oil completely ignores the fact that oil is a scarce resource with high barriers to entry. Tech is defined by the opposite: low barriers to entry and abundance.
The piece ignores competition in looking for answers online by not even mentioning “voice assistants” in any of its 8,000+ words. Ultimately, the article’s claims are rebutted by the reality of today’s tech sector, which is driving the highest R&D investment in the U.S. due to fierce competition, creating more innovation and growth than any other sector.
Below are more points detailing each of the above concerns.
The NYT Mag Rehashes Multi-Year FTC Investigation That Dismissed Rival Claims With The Bureau Of Competition, Economics And Office Of General Counsel All Aligned With FTC Recommendations
See more expert opinions HERE.
A Bipartisan Commission Unanimously Voted To Close The Google Investigation In Accordance With The Recommendation Of Staff. “Contrary to recent press reports, the Commission’s decision on the search allegations was in accord with the recommendations of the FTC’s Bureau of Competition, Bureau of Economics, and Office of General Counsel.” (Statement of Chairwoman Edith Ramirez, and Commissioners Julie Brill and Maureen K. Ohlhausen regarding the Google Investigation, FTC, 3/25/15)
The FTC Ruling Explicitly Cited Its Investigation Into Google Search And Its Impact On Vertical Websites, Like Foundem, And Dismissed Rival Concerns. “The FTC also conducted an extensive investigation into allegations that Google biased its search results to disadvantage certain vertical websites; and that Google entered into anticompetitive exclusive agreements for the distribution of Google Search on both deskop and in the mobile arena. The agency decided not to take action in connection with these allegations.” (Google Agrees to Change Its Business Practices to Resolve FTC Competition Concerns In the Markets for Devices Like Smart Phones, Games and Tablets, and in Online Search, FTC, 1/3/13)
Leaked FTC Memo Shows FTC Economists Agreed With FTC That Google Search Changes Had “Strong Procompetitive Justifications” And Taking Action Was Not Merited. “Did this overrule FTC staff recommendations? No. FTC Commissioners emphasized that the Commission’s conclusion was ‘in accord with the recommendations of the FTC’s Bureau of Competition, Bureau of Economics, and Office of General Counsel.’ A leaked FTC memo, obtained by the Wall Street Journal in 2015, indicated that some staff in the agency’s Bureau of Competition (BC) had supported an enforcement action — but not regarding how Google showed ads and results on its Search page. On that issue, the WSJ makes clear that, like every other part of the FTC, the leaked BC memo recommended against a case. Why? BC staff doubted a case would succeed due to ‘legal hurdles and Google’s ‘strong procompetitive justifications’.’ The memo itself thus concludes ‘…we do not recommend that the Commission issue a complaint against Google for this conduct.'” (Matt Schruers, “Did The FTC Overrule Staff? Setting An Alternative History Straight,” CCIA Project Disco, 6/29/17)
The International Center For Law & Economics Review Of Yelp’s Study Found The Evidentiary, Economic, And Legal Evidence For A Successful Antitrust Case Offered Falls “Woefully Short.” “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 A.Manne, Ben Sperry, and Kristian Stout, “A Critical Assessment of the Latest Charge of Google’s Anticompetitive Bias from Yelp and Tim Wu,” ICLE Antitrust & Consumer Protection Research Program White Paper 2016-3, 9/19/16)
Econsultancy CEO Chris Lake’s 2009 Scathing Review Of Foundem Found A Search For A Nokia Phone Returned 27 Pages Of Links To Mobile Retailers With Duplicate Content All Over The Place. “Take this example, which provides a ‘comparison’ of the Nokia 6600 mobile phone. It is in fact 27 pages of links to mobile retailers, and there is duplicate content all over the place (in the extracts to each offer). That’s not something Google would like to see, and it does nothing for me either.” (Chris Lake, “Foundem Vs Google: A Case Study In SEO Fail,” Econsultancy, 7/18/09)
The NYT Mag’s 8,000-Word Case Against Google Doesn’t Even Mention “Voice Assistants,” Where Google Competes Against A Host Of Other Platforms And Services, As Well As Other Competitors
See more on search competition HERE and background on Foundem HERE.
iCrossing CEO Guy Phillipson Points Out Voice Search Has Already Reached 20 Percent Of All Queries. “Voice search has already reached 20% of all queries. That’s critical mass in my business book, so we must be heading for the early majority on the old bell curve. With Google, Siri, Alexa and Cortana there’s a whole gang of virtual assistants taking our commands, and getting smarter in the process. This will have a positive impact on our SEO strategies in 2018, as we optimise and generate content to respond to longer (and sometimes surprising) consumer voice queries. For those who do it well, this should become a seamless element of the modern brand experience.” (Guy Phillipson, “Eight Predictions For Digital Advertising In 2018,” The Drum, 12/21/17)
The Similarities Between Google And Microsoft Are “Superficial,” And Microsoft Failed To Advance In Search For Many Reasons Beyond Antitrust
Vanity Fair Reports That Microsoft’s Lost Decade Was The Result Of “Bloated And Bureaucracy-Laden” Culture That Rewards Managers Who Strangled Innovative Ideas That Might Threaten The Established Order Of Things. “In December 2000, Microsoft had a market capitalization of $510 billion, making it the world’s most valuable company. As of June it is No. 3, with a market cap of $249 billion. In December 2000, Apple had a market cap of $4.8 billion and didn’t even make the list. As of this June it is No. 1 in the world, with a market cap of $541 billion. How did this jaw-dropping role reversal happen? How could a company that stands among the most cash-rich in the world, the one time icon of cool that broke IBM’s iron grip on the computer industry, have stumbled so badly in a race it was winning? The story of Microsoft’s lost decade could serve as a business-school case study on the pitfalls of success. For what began as a lean competition machine led by young visionaries of unparalleled talent has mutated into something bloated and bureaucracy-laden, with an internal culture that unintentionally rewards managers who strangle innovative ideas that might threaten the established order of things.” (Kurt Eichenwald, “Microsoft’s Lost Decade,” Vanity Fair, 8/12)
Contrary To NYT Mag’s Claim, Former Microsoft CEO Steve Ballmer Argued If Microsoft Had Just Had Patience, They Might Be In Paid Search. “‘The biggest mistakes I claim I’ve been involved with is where I was impatient — because we didn’t have a business yet in something, we should have stayed patient,’ Mr. Ballmer said in an interview. ‘If we’d kept consistent with some of the ideas” that Microsoft had in-house in 1999, “we might have been in paid search.'” (Robert Guth, “Microsoft Bid to Beat Google Builds on a History of Misses,” WSJ, 1/16/09)
AEI’s Jim Pethokoukis Argues Microsoft Failed Due To “Caution That Typically Afflicts Large, Successful Incumbent Firms.” “The simplistic antitrust explanation is an even worse fit when making the case that a young Google would have been crushed by Microsoft if the software giant had not been distracted by the government’s 1998 antitrust case against it. Microsoft executives themselves have blamed their lack of response to Google as well as their failure to make Windows the dominant mobile operating system on the caution that typically afflicts large, successful incumbent firms.” (Jim Pethokoukis, “The Astonishingly Weak Antitrust Case Against Facebook, Google, And Amazon,” The Week, 1/19/18)