How Washington fumbled the future

how-washington-fumbled-the-future

30-03-21 02:00:00,

Nearly a decade ago, the documents show, the FTC’s investigators uncovered evidence of how far Google was willing to go to ensure the primacy of the search engine that is the key to its fortunes, including tactics that European regulators and the U.S. Justice Department would later label antitrust violations. But the FTC’s economists successfully argued against suing the company, and the agency’s staff experts made a series of predictions that would fail to match where the online world was headed:

— They saw only “limited potential for growth” in ads that track users across the web — now the backbone of Google parent company Alphabet’s $182.5 billion in annual revenue.

— They expected consumers to continue relying mainly on computers to search for information. Today, about 62 percent of those queries take place on mobile phones and tablets, nearly all of which use Google’s search engine as the default.

— They thought rivals like Microsoft, Mozilla or Amazon would offer viable competition to Google in the market for the software that runs smartphones. Instead, nearly all U.S. smartphones run on Google’s Android and Apple’s iOS.

— They underestimated Google’s market share, a heft that gave it power over advertisers as well as companies like Yelp and Tripadvisor that rely on search results for traffic.

The FTC’s decision to let Google off the hook reflected an era when the Obama administration had a close relationship with Silicon Valley and Americans held largely positive views toward the emerging tech giants. But the documents also demonstrate how the Obama-era FTC took a cautious approach to antitrust enforcement, deferring to the wisdom of the agency’s economists over its lawyers — an attitude anti-monopoly advocates are now questioning as Congress considers sweeping changes to antitrust laws.

The FTC’s antitrust lawyers took a harder line in urging the commission to sue Google over its efforts to own the U.S. mobile search market, the memos reveal — advice the agency never disclosed to the public. But the five commissioners rejected that recommendation.

  • 2011

    • June 13:
      The FTC’s commissioners vote to demand information
      from Google as part of an antitrust probe into
      whether the company had altered its search results
      to disfavor rivals.

    2012

    • May to June:
      FTC lawyers interview Google co-founder Sergey Brin
      and CEO Eric Schmidt.

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