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November 13, 2017

Google Now a Target for Regulation

Headline in the Washington Post:

Tech companies pushed for net neutrality. Now Sen. Al Franken wants to turn it on them.

The time was – way back around the turn of the century – when all Internet companies believed that the Internet should be free from government regulation. I lobbied along with Google and Amazon to that end (there were no twitter and Facebook then); we were successful over the objection of traditional telcos who wanted the protection of regulation. The Federal Communications Commission (FCC) under both Democrats and Republicans agreed to forbear from regulating the Internet the way they regulate the telephone network; the Internet flourished, to put it mildly.

Fast forward to 2015. Google and other Internet giants and their trade group, the Internet Association, were successful in convincing the Obama FCC to reverse that policy and regulate Internet Service Providers (ISPs) under the same regulation which helped to stifle innovation in telephony for decades. The intent, according to the Internet Association, was to protect Net Neutrality (a very good name) and assure that ISPs didn’t either censor or prefer their own content over the content of others – Google, for example. The regulation was acknowledged to be preemptive - ISPs weren’t discriminating but they might.

This spring Trump’s FCC Chair, Ajit Pai, announced the beginning of an effort to repeal the 2015 regulations and return the Internet to its former lightly regulated state. The Internet Association and its allies mounted a massive online campaign against deregulation in order, they said, to protect Net Neutrality. One of their allies was the Open Market Initiative, which was then part of The New America Foundation. More about them below.

I blogged to Google:

“You run a fantastically successful business. You deliver search results so valuable that we willingly trade the history of our search requests for free access. Your private network of data centers, content caches and Internet connections assure that Google data pops quickly off our screen. Your free Chrome browser, Android operating system, and gmail see our communication before it gets to the Internet and gets a last look at what comes back from the Internet before passing it on to us. You make billions by monetizing this information with at least our implied consent. I mean all this as genuine praise.

“But I think you’ve made a mistake by inviting the regulatory genie on to the Internet. Have you considered that Google is likely to be the next regulatory target?”

It didn’t take long.

In August the European Union declared a penalty against Google. Barry Lynn of the Open Market Initiative posted praise for the EU decision on the New America website. According to the NY Times:

“The New America Foundation has received more than $21 million from Google; its parent company’s executive chairman, Eric Schmidt; and his family’s foundation since the think tank’s founding in 1999. That money helped to establish New America as an elite voice in policy debates on the American left and helped Google shape those debates…

“Hours after this article was published online Wednesday morning, Ms. Slaughter announced that the think tank had fired Mr. Lynn on Wednesday for ‘his repeated refusal to adhere to New America’s standards of openness and institutional collegiality.’”

Mr. Lynn and his colleagues immediately founded The Open Market Institute. The front page of their websites says:

“Amazon, Google and other online super-monopolists, armed with massive dossiers of data on every American, are tightening their grip on the most vital arteries of commerce, and their control over the media we use to share news and information with one another.”

Sen. Al Franken and the Open Market Institute held an event which led to the WaPo headline and the article which begins:

“For years, tech companies have insisted that they're different from everything else. Take Facebook, which has long claimed that it's a simple tech platform, not a media entity. ‘Don't be evil,’ Google once said to its employees, as though it were setting itself apart from the world's other massive corporations.

“But now, some policymakers are increasingly insisting that firms such as Google, Facebook and Twitter really aren't that special after all — and that perhaps it's time they were held to the same standard that many Americans expect of electricity companies or Internet providers.

“Sen. Al Franken (D-Minn.) became the latest and most vocal of these critics Wednesday when, at a Washington conference, he called for tech companies to follow the same net neutrality principles that the federal government has applied to broadband companies such as Verizon, AT&T and Comcast.”

I’m not happy to have been right; on the contrary, I’m appalled. The last thing we should want is the government regulating Internet content, especially at a time when both the political right and the political left are anti free speech. But there is no principled argument that Google’s potential competitors, the ISPs, should be constrained by regulatory oversight while Google, much bigger than any of these competitors and much more dominant worldwide, can exert its dominance freely. Google truly opened a Pandora’s box and let out a regulatory genie.

As much as I am against regulatory oversight of content, I do believe that the government has a very proper role both in antitrust and in truth in advertising. These are some of the tools which do need to be used to keep new or old oligarchs from ruling the world.

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