Google’s Open Double Standard — Fact-Checking Google’s Treatise on “The meaning of open”

Google posted its treatise on “The meaning of open” designed to redefine the word “open” in Google’s image. It is an important read because it is a bay window view into the altruistic way that Google yearns for the world to perceive it.

• Like most all of Google’s PR, however, Google’s Treatise on “The meaning of open” may be “the truth” as Google sees it, but it is certainly not “the whole truth and nothing but the truth.”

I. Google’s Open Double Standard

Simply, Google is for “open” wherever it does not have a monopoly or dominant market position, however where it does, as in AdWords, AdSense and search advertising syndication, it is closed, to ensure that its dominance remains impregnable to competitors.

In the height of irony, Google has cleverly flipped a concept that was originally designed to be a sword of competition to a closed monopoly, and applied it as a political/PR shield to protect Google’s closed monopoly from competition.

• Google admits: “Open systems are chaotic and profitable, but only for those who understand them well and move faster than everyone else.” [bold emphasis added]
• Google de facto admits here that open systems are only profitable for the one that better understands and is faster than “everyone else” i.e the open-opoly winner of the open race.
• Now light bulbs should be going on in readers heads why Google:
  • Has a master plan to “Make the Web faster;”
  • Serially releases betaware forcing open sourcers to orbit around Google’s monopoly center of gravity; and
  • Serially releases more new products and services than anyone (that just happen to uniquely integrate with one another and depend on underlying data and private information that only Google has.)
• Google “understands” that its doublespeak re-definitions of “open” and “free” enable Google to uniquely harness the Internet’s many network effects for the benefit of Googleopoly.
  • In a word, Google’s between-the-lines re-definition of “open” is: “that which benefits Google.”

In Google’s 4400 word treatise telling everyone else how they should run their businesses openly, Google dismisses the notion in 82 words that Google’s monopoly businesses should be open.

• “In many cases, most notably our search and ads products, opening up the code would not contribute to these goals and would actually hurt users. The search and advertising markets are already highly competitive with very low switching costs, so users and advertisers already have plenty of choice and are not locked in. Not to mention the fact that opening up these systems would allow people to “game” our algorithms to manipulate search and ads quality rankings, reducing our quality for everyone.”

There is a reason students are not allowed to grade their own papers and judges are not allowed to hear their own appeals and it is the same reason Google cannot be the definer and arbiter of Internet openness no matter how deeply Google feels that it already is and always should be.

Principles to be principles must principled. Any monopoly power that can de facto dictate a standard for everyone else but itself, is unjust, unfair, and unreasonable.

Google, in pretending to stand for “The meaning of open” for all, while at the same time self-exempting only Google’s monopolies businesses from the so-called principle, is the ultimate in dystopian hypocrisy and cynicism.

 

II. Fact-Checking Google’s “The meaning of open” Treatise

Google: “…we need to lay out our definition of open in clear terms… There are two components of our definition of open: open technology and open information. Open technology included open source… and open standards…”

• Why does Google not include the definition of an “open market” — “a freely competitive market operating without restrictions”?
• Could the reason for Google’s gross omission of “open market” be that the definition then would not square with Google’s self-serving re-definition of an “Open Internet” which requires that FCC regulation and not market competition produce openness? And which requires that open Internet principles only apply to Google’s broadband competitors and not to Google itself?

Google: “…we have a big opportunity to lead by example…”

• Why doesn’t Google lead by example where Google leads the world by opening Google’s “black box:”
  • Search algorithm?
  • Search advertising auctions for AdWords and AdSense? and
  • Quality Score which determines Google PageRank?
• Why is Google’s Chrome browser closed to the Internet in that it blocks user access to the Domain Name System address bar that enables users to go directly to the website of their choice?

Google: “Our committment to open systems is not altruistic. Rather it is good business.”

• How does this assertion square with Google’s assertion above that “open systems are chaotic and profitable but only for those who understand them well and move faster than everyone else.”
• And if its good business, why shouldn’t Google’s clients (advertisers and publishers) have access to the same buy-sell market information that customers have in most every other market, but don’t get from Google?

Google: “Our goal is to keep the Internet open…”

• Since over 70% of the world searches Google’s exact mirror copy of the Internet stored on Google’s servers, why is GooglesNet not considered the Internet when it is for all intents and purposes for over 70% of Internet search users?

Google: “…our approach to open information is to build trust with the individuals who engage within that ecosystem… we adhere to three principles of open information: value, transparency, and control.”

• How is it open when, like a one-way mirror, Google takes access to more private information than any entity in the world without permission, but is among the most secretive companies in America about its own core business?
  • How is Google’s open information “transparent” to users, if surveys indicate that most users are largely unaware that their private information is being collected without their permission by Google?
  • How is a user in so-called “control” of all the information Google collects on them if Google’s so-called “privacy dashboard” does not have:
    • An on-off switch?
    • One omni-opt-out-box? Or
    • A “Do Not Track List” button that is only “one click away?”

Google: “… open is the only way…”

• Why should there be no competition to Google’s re-definition of “open?”
• What if someone does not want, or agree with, Google’s open approach?
• Is there any room for dissent or reasonable difference of opinion from Googleopoly’s “only way?”

In sum, Google obviously is aware that the word “open” has over 88 different definitions per Dictionary.com, so it is furiously trying to redefine what “open” means in the context of Google and the Internet.

• Part of “the whole truth and nothing but the truth” that Google has so grossly omitted from its definition of “open” is that open can easily mean “vulnerable,” which is why I wrote the white paper: “The Many Vulnerabilities of an Open Internet.“

Lastly, it should be no surprise that the author of Google’s post on “The meaning of open,” is Jonathan Rosenberg, Google Sr. VP for product development, who infamously declared earlier this year in a Google omni-post:

• “We won’t (and shouldn’t) try to stop the faceless scribes of drivel, but we can move them to the back row of the arena.”

 

FCC’s Berkman study debunked by Bret Swanson

Kudos to Bret Swanson for his outstanding debunking of the approach and conclusions of the FCC’s Berkman study on broadband policy lessons in his Real Clear Markets piece, “Harvard’s Berkman Study Bungles Broadband.”

• To the extent that the FCC wants its decisions to be fact-based, data-driven, and respected, the FCC’s National Broadband Plan conclusions can not rely on this exceptionally flawed Berkman study.
• The old adage is true: “garbage in garbage out.”

 

Google-Yelp: Google’s Monopolization Strategy is Coming into Clearer Focus

Google’s reported likely acquisition of Yelp, a popular review site for local businesses in major cities, does a lot to bring Google’s broader monopolization strategy into clearer focus.

• Yelp is potentially just the latest in a slew of strategic information-related acquisitions that Google has made, that when looked at individually — look small and innocuous, but when looked at together and as a cumulative pattern, appear eerily reminsicent of the classic monopolization tactics of Standard Oil’s monopolization of the oil industry via acquisition of oil producing/distributing networks in the late 1800s and those of pre-1911 AT&T in rolling up most of the nation’s telephone networks via acquisition.
• Google is simply replicating the same type of monopolization strategy for the 21st century by acquiring key strategic information producing/distributing networks.

The following list of strategically important Google acquisitions belies the conventional wisdom that Google’s scale and scope have been grown organically and as a result of Google in-house innovation.

• Blogger (2/03) for blogging, Measure Map (2/06) for blog-tracking software, and Feedburner (5/07) for RSS feed and blog advertising network;
• Picassa (7/04) and Panoramio (8/07) for digital photo management — Google Images;
• Urchin Software (3/05) and Trendanalyzer (3/07) for web traffic analysis i.e. Google Trends;
• Keyhole (10/4) and Image America (7-07) for digital mapping and aerial imaging, i.e. Google Earth and Google Maps;
• Dodgeball (5/05) and GrandCentral Communications (7/07) for text messaging and phone integration, i.e. Google Voice;
• YouTube (10/06) On2 (8/09) for Internet broadcasting and video compression;
• GreenBorder (5/07) and Postini (7/07) for web browsing and application security, ostensibly for online tracking;
• DoubleClick (12/07) for display-ad-serving/analytics and Google’s behavioral advertising/”interest-based advertising.
• And proposed AdMob (11-09), Gizmo5 (11-09) and maybe Yelp (?)

Google has obviously concluded that it is a lot more efficient to achieve its monopolistic public mission “to organize the world’s information,” if Google actually owns or controls most of the world’s most strategic information, and most all the strategic derivative private information associated with it, so competitors and others can’t get access to it.

 

The proof of Google’s monopolistic intentions is that the second part of their mission, “to organize the world’s information and make it universally accessible and useful,” is simply not true, because Google routinely and non-neutrally blocks competitors’ access to information that Google owns and controls, (and which, given Google’s exceptional scale and scope, is increasingly necessary for search advertisng competitors and others — in order to compete with GooglesNet.)

• YouTube is the second largest generator of searches in the world, and has ~fifteen times the online video share of its closest rival.
  • Google excludes search advertising competitors from crawling Google’s world-leading video archive called YouTube.
• In the Google Book settlement, the DOJ in a statement of interest letter to the court, argued it was anti-competitive for Google to exclude search advertising competitors from crawling the several million book archive of digital orphan works that Google illegally copied.

In sum, Google is not merely a search engine company, but a highly diversified digital information production/distribution and content-owning conglomerate.

• Not only has Google amassed its monopoly scale and scope in good part via acquisition, but it also has strategically targeted the means of controlling the world’s information, by dominating the monetization of digital information via their:
  • search advertising monopoly;
  • search and display advertising integrated platform (via their acqusition of DoubleClick;) and
  • proposed acquisition of AdMob (to dominate mobile advertising.)
• On top of the scale/scope and domination of monetization achieved in part through acquisition, Google also excludes competitors from strategic information they require in order to compete.

There are more than enough correlated dots to connect here.

• The increasingly clear Google monopolization picture that emerges from the connected dots is alarming to say the least.

 

Chrome is not an Internet Browser and not open, but closed to the Internet’s Domain Name System

Since the EU-Microsoft settlement now will allow users to select an Internet browser from Microsoft, Mozilla, Google, Apple, and Opera among others, the next relevant competitive issue with browsers is if the browsers themselvesa are operating clandestinely in an anti-competitive or closed way.

• In other words, whether or not browsers are non-neutral and divert the user somewhere against the user’s expressed choice.

As I have discussed before, Google’s Chrome is not an Internet browser, but a gateway to Google’s datacenter to browse Google’s mirror copy of the Internet and track the user’s every movement.

• Specifically, Google’s Chrome browser effectively eliminates the Internet’s Domain Name System (DNS) address bar where a user can directly go to the URL and to the “open Internet” content/application of their choice, and replaces it with Google’s “OmniBox,” which is just a fancy rhetorical sleight of hand for Google’s search bar.
  • This is particularly troublesome because users are increasingly typing in URLs in order to more efficiently go where they want to go.

The import of this is that Google has been the most vocal corporate proponent for net neutrality and the FCC’s Open Internet regulation of competitive broadband companies without market power, when Google, with a search advertising monopoly per the DOJ, is not neutral, and is now leveraging its search advertising monopoly into browsers and cloud computing by creating its own clever technological version of a first landing page “walled garden” — that they claim to oppose.

• When one puts a URL, www.brand.com, into Google’s OmniBox search bar they do not go where they asked to go but to Google’s results page where Google can advertise against that brand without sharing the ad revenues with that brand, and where Google can offer competitors an opportunity to divert the user from their requested destination and to a competitor’s destination.
• This technological misdirection, misrepresentation, and duplicity can only happen in Google’s “walled garden” on a first landing page, where Google gets a unique opportunity to skim off the fruits of others.
• This is neither neutral nor how a supposedly “Open Internet” (as Google and the FCC define it) should operate. 

Googleopoly V — Why the FTC Should Block Google-AdMob

 

Below is the abstract of my latest white paper in my five-part “Googleopoly” series of antitrust white papers. The full white paper is at this link and at www.googleopoly.net.

 

Googleopoly V* — Why the FTC Should Block Google-AdMob

The Top Ten Reasons Why Google-AdMob Would “Substantially Lessen Competition”

 

By Scott Cleland,** President, Precursor LLC

December 16, 2009

 

Abstract: A Google acquisition of AdMob would eliminate Google’s only substantial rival platform in mobile in-application advertising and catapult Google from an estimated 25% share to over 75% share of this strategic gatekeeper market for monetizing mobile Internet applications. Combined with Google’s search advertising monopoly and dominance of mobile search advertising, Google’s acquisition of AdMob, “the world’s largest mobile advertising marketplace,” would likely tip the broader mobile advertising marketplace from a competitive to a monopoly trajectory. In short, the AdMob acquisition threatens to foreclose competition and facilitate monopoly in a strategic gatekeeper market essential to the Internet economy, which would harm: consumers, developers, advertisers, publishers, smart-phone manufacturers, and broadband providers.

 

The Top Ten Reasons Why Google-AdMob Would “Substantially Lessen Competition:”

1. Google-AdMob would combine the #1 & #2 mobile in-application display advertisers in a highly-concentrated and exceptionally-strategic gatekeeper market, effectively eliminating Google’s only substantial rival competitive platform in this market.
2. Acquiring AdMob’s ~50% share would catapult Google to >75% share of the mobile in-application display advertising market.
3. Preserving competition in this market is key to preserving a competitive mobile ecosystem.
4. Google-AdMob would tip mobile advertising toward a monopoly trajectory.
5. The extraordinary price paid for AdMob is evidence of acquisition of market power.
6. Google proactively thwarted Apple from becoming a stronger competitor to Google.
7. Déjà vu: DOJ’s Google-YouTube approval proved that antitrust enforcers need to be much more aware of the extraordinary network effects of adding fast-growing, first-mover strategic platforms to firms with existing market power.
8. Google misled the FTC in the FTC’s Google-DoubleClick investigation by representing Yahoo as a viable long-term competitor when the two firms were exceptionally close and cooperative as evidenced by the proposed and rejected Google-Yahoo ad agreement.
9. Google-AdMob could snuff out potential mobile application monetization competition in the crib.
10. AdMob would enable Google to further dominate the collection of data and sensitive competitive information that is central to competing in the monetization of Internet content in the mobile or PC stationary markets.

 

*Googleopoly IV: How Google Extends Search Monopoly to Monopsony over Digital Info 9-15-09

Googleopoly III: Dependency: The Crux of Google-Yahoo Ad Agreement 10-3-08

Googleopoly II: Google’s Predatory Playbook to Thwart Competition; 9-23-08 

Googleopoly: The Google-DoubleClick Anti-Competitive Case; 9-17-07  

See www.Googleopoly.net

 

**The views expressed in this white paper are solely the author’s and not the views of any Precursor clients. See Scott Cleland’s Full Biography at: http://www.precursor.com/bio_long.htm