Category: Digital Technology

Posted on By Patrick Maines

Google, the FTC, and ‘Plausible’ Justifiability

Though it was surely not its intention, the Federal Trade Commission’s conclusion last week of its investigation of Google invites the question: What useful function does the FTC serve?

Not content, after two years of investigation on the taxpayers’ dime, to largely look past the mountain of evidence of marketplace harm caused by Google’s search and advertising practices, the Commission compounded that error by declining to issue a formal consent order, leaving it in the hands of Google itself, without the prospect of penalty, to change some of its business practices.

As even Commissioner J. Thomas Rosch said in his statement of concurrence and dissent, the FTC’s “settlement” with Google “creates very bad precedent and may lead to the impression that well-heeled firms such as Google will receive special treatment at the Commission.”

In elaboration of his dissent from the settlement procedure, Comm. Rosch added this:

Instead of following standard Commission procedure and entering into a binding consent agreement to resolve the majority’s concerns, Google has instead made non-binding commitments with respect to its search practices….

Our settlement with Google is not in the form of a binding consent order and, as a result, the Commission cannot enforce it by initiating contempt proceedings.  The inability to enforce Google’s commitments through contempt proceedings is particularly problematic given that the Commission has charged Google with violating a prior consent agreement.

What Comm. Rosch delicately calls “special treatment,” the more cynical of us would recognize as political influence peddling, a practice that Google has become quite adept at employing.  First it bankrolled the codification, at the Federal Communications Commission, of “net neutrality” regulations, thereby providing a solution to a nonexistent problem; then it led the successful opposition to the PIPA and SOPA copyright bills, the better to protect its investment in YouTube; now it has neutered the FTC, with the consequence being that it can continue to game its search results in ways that favor companies it controls.

So how has Google managed such political feats?  Well, would you believe that money has played a role?  In the FTC investigation alone Google reportedly spent some $25 million lobbying the matter.  To give an idea of the magnitude of this kind of spending, it equals 10 percent of the FTC’s total annual budget of $250 million.

But in addition to its FTC-specific lobbying, it’s well known that Google has cast its lot, through munificent campaign contributions and public policy support, with the current administration. Though it failed to come to pass, there was undoubtedly substance to the rumor that Google’s Eric Schmidt was being considered for a cabinet post in the Obama Administration.

Even so, there is evidence that the FTC commissioners know what they have done.  Their concluding statement about Google’s search practices, for instance, displays an almost comical defensiveness as they contend that, even if Google’s search practices favor its own companies, that is arguably okay:

In sum, we find that the evidence presented at this time does not support the allegation that Google’s display of its own vertical content at or near the top of its search results page was a product design change undertaken without a legitimate business justification.  Rather, we conclude that Google’s display of its own content could plausibly (emphases added) be viewed as an improvement in the overall quality of Google’s search product….  Although at points in time various vertical websites have experienced demotions, we find that this was a consequence of algorithm changes that also could plausibly be viewed as an improvement in the overall quality of Google’s search results….

Although our careful review of the evidence in this matter supports our decision to close this investigation, we will remain vigilant and continue to monitor Google for conduct that may harm competition and consumers.

Such limp-wristed rhetoric aside, there is a chance that Google will be brought to heel, just not by American authorities.  As it happens, the European Commission has also been investigating Google’s misdeeds, and the odds are good that, lacking the kind of political clout in Europe that it has in the USA, the company may actually receive from the Europeans something more than just a slap on the wrist.  On Dec. 18 the Commission gave the company 30 days to provide it with proposals to settle its complaints, something that could cost Google billions if it fails to do so.

Whatever the Europeans do, however, there remains the FTC’s foozled play, well put in a Bloomberg News editorial:

The FTC missed an opportunity to explore publicly one of the paramount issues of our day: Is Google abusing its role as gatekeeper to the digital economy?  Lawmakers, economists, other regulators, and consumers should all be in on this important debate over whether Google is leveraging its overwhelming dominance of search into unassailable market power in other areas. 

                                               

The opinions expressed above are those of the writer and not of The Media Institute, its Board, contributors, or advisory councils.

Posted on By Patrick Maines

The ITU and the Internet

In 1971, when China was first admitted to the United Nations, William Rusher quipped that it was "a case of loosing a China in the bullshop.”  Such is the first thought that comes to mind in reflection on the latest bit of mischief to issue from the UN, in this case courtesy of that body’s International Telecommunications Union (ITU).

The second thought is of the power of precedents in law and policymaking.  Policywise, precedents can be likened to the engine of a train, the caboose of which is incremental or galloping movement in the same direction.

So the take-away from the vote last week in Dubai by 89 countries, including such freedom-loving regimes as those of China, Russia, Iran, and Venezuela (you know, the usuals), is that it’s just a matter of time before many of those same countries claim the right, under the UN charter, to control the Internet through such things as filtering, identifying users, and surveillance.

Defenders of last week’s vote, like the head of the ITU, disingenuously claim that “The conference was not about Internet control or Internet governance….  And indeed there are no treaty provisions on the Internet.”  The key word here is “treaty,” since tucked away in the appendices, as reported by Ars Technica, is this sentence:

[WCIT-12 resolves to invite member states] to elaborate on their respective positions on international Internet-related technical, development and public-policy issues within the mandate of ITU at various ITU forums including, inter alia, the World Telecommunications/ICT Policy Forum, the Broadband Commission for Digital Development and ITU study groups. 

So for the first time, the precedent has been established that the UN is an appropriate body for the deliberation of policy issues affecting the Internet.  Never mind that this resolution is not binding on those countries, like the United States, which voted against the International Telecommunications Regulations.  The point survives: From this time forward the UN’s ITU will provide cover for those nations that wish to wall their citizens off from the open Internet.

Nor is this the only dangerous precedent to be noted in the context of the WCIT.  As warned two years ago by Ambassador Philip Verveer, the adoption by this country of so-called “net neutrality” regulations itself provides an opportunity for international mischief making.

As Robert McDowell, than whom no other FCC commissioner in memory has been right more often, put it in congressional testimony earlier this month:

Should the FCC’s regulation of Internet network management be overturned by the court, in lieu of resorting to the destructive option of classifying, for the first time, broadband Internet access services as common carriage under Title II, the FCC should revive a concept I proposed nearly five years ago – that is to use the tried and true multi-stakeholder model for resolution of allegations of anti-competitive conduct by Internet service providers….

If we are going to preach the virtues of the multi-stakeholder model at the pending World Conference on International Telecommunications (WCIT) in Dubai, we should practice what we preach.  Not only would the U.S. then harmonize its foreign policy with its domestic policy, but such a course correction would yield better results for consumers as well. 

                                               

The opinions expressed above are those of the writer and not of The Media Institute, its Board, contributors, or advisory councils.

 

Posted on By Kurt Wimmer, Esq.

Google and the First Amendment

By guest blogger KURT WIMMER, ESQ., partner at Covington & Burling LLP in Washington, D.C., and chairman of The Media Institute’s First Amendment Advisory Council.

I just had the privilege of participating in a panel discussion at an American Antitrust Institute conference.  My panel included such luminaries as Eli Noam of Columbia, Gene Kimmelman of the Antitrust Division of the Department of Justice, and Susan DeSanti of the Federal Trade Commission.  Unlike many of my colleagues on the panel, I’m far from being an antitrust expert.  My topic was a more familiar one – whether enforcement of antitrust law against a search and advertising provider would violate the First Amendment. 

The question arises because of a novel proposition being advanced by Google.  The Federal Trade Commission is investigating claims that Google has violated antitrust law by manipulating search results to favor its own services and bury the services offered by vertical search engines that might compete with Google.  Google has argued that it is absolutely immune from antitrust liability because its search results constitute speech protected by the First Amendment – in fact, it asserts that the First Amendment actually “blocks” the application of antitrust law to it.  Google analogizes its work to that of a newspaper editor selecting information for publication, and seeks the same “absolute” protection that a newspaper editor would receive under the First Amendment.

But wait – newspaper editors don’t receive absolute protection under the First Amendment.  If editors’ work is absolutely protected, why did I spend last night discussing a story with an editor to mitigate defamation risk?  Why did I defend a deposition last week of a reporter attempting to keep his source confidential?  Why have reporters gone to prison in the United States to protect sources?  Why are some in Congress talking about doubling down on legal restrictions to stop leaks to the press?

The First Amendment is not absolute, and never has been, for anyone, whether they run a newspaper, a blog, or a search-and-advertising business. False and deceptive speech, as Google’s manipulated search results are alleged to be, falls outside the protection of the First Amendment.  Jon Leibowitz, chairman of the FTC, made precisely this point in an All Things Digital interview just this month, and he’s precisely right as a matter of constitutional law.  Otherwise, the FTC would have no jurisdiction to enforce privacy laws or laws against false advertising and deceptive trade practices.

Of course, non-deceptive speech also may be regulated in many circumstances.  The antitrust laws, which regulate commercial behavior to promote competition, are an example of laws that may permissibly restrict certain kinds of speech.  The plain fact is that “the First Amendment does not provide blanket protection to restraints of trade effectuated through speech,” in the words of the Department of Justice.  This principle has been applied consistently since the Supreme Court affirmed an antitrust judgment against the Associated Press in 1945, and remains the law today.

Google’s arguments that it is uniquely immune from antitrust liability, regardless of how it has abused its massive market share, remind me of the quaint musings of early Internet pioneers that law cannot apply in “cyberspace.”  But the same law that applies offline generally applies online (in the absence of online-specific legislation such as Section 230), and damage to competition that may occur on the Internet can destroy real businesses in the real world.  No one is above the law – not even Google.  Whether any of the allegations against Google can be proved, of course, remains to be seen.  But to assert at the very outset that the First Amendment actually “blocks” liability, regardless of what the FTC or a court might find, ignores the law.

If you’d like to read more, the Media Institute has graciously agreed to host my paper (available here) that addresses these issues in more depth.

                                  

The opinions expressed above are those of the writer and not of The Media Institute, its Board, contributors, or advisory councils.

Posted on By Richard T. Kaplar

DOL Reportedly Postponing New ‘Lock-up’ Policy

Published reports suggest that the Department of Labor is poised to delay implementation of a policy announced in April that would require reporters working in the DOL’s “lock-up” room to use government computers and transmission lines when writing stories about DOL reports and data as they’re released.  The proposed policy caused a flurry of criticism from media outlets and prompted a June 6 hearing by the House Oversight and Government Reform Committee.  DOL will announce a new start date this week, according to reports quoting an e-mail from DOL media specialist Carl Fillichio.

We’re glad to see that DOL is at least planning to postpone the policy.  Media Institute President Patrick Maines was an early and outspoken critic of this bureaucratic folly, questioning the wisdom of such a move in his May 7 post.

Let’s hope that any delay becomes permanent, and that this attempt to extend the government’s hand into reporters’ notebooks is forever banished to the dust heap of bad ideas. 

                              

The opinions expressed above are those of the writer and not of The Media Institute, its Board, contributors, or advisory councils. 

Posted on By Patrick Maines

Julius Genachowski and Broadband Billing

Comments made earlier this week by FCC chairman Julius Genachowski have raised hackles at organizations like Free Press and kindred groups.  The occasion was the Cable Show in Boston, and the offending subject was what is called “usage-based billing” – the radical notion that people who use more of a thing should pay more than those who use less.

In a Q&A session with Michael Powell, former FCC chairman and current CEO of the National Cable and Telecommunications Association, Genachowski avowed that there was much to like about broadband providers basing their charges on usage (rather than on a one-size-fits-all basis).

This wasn’t the first time Genachowski had endorsed this practice – it was part of the net neutrality regulations that the FCC promulgated a couple of years ago – but it was enough to provoke the simple folk at Free Press into eruptions of their usual blather.

The last time broadband billing was discussed in this blog (April 2009), the news was Time Warner Cable’s decision, under fire from people and organizations like Free Press, Public Knowledge, and Sen. Charles Schumer, to suspend their trials of this kind of billing in a handful of cities.

As reported at the time, the air was thick with celebration as the “victors” issued triumphant statements on the occasion.  Triumphant no more, they have been reduced, in response to Genachowski’s comments on Tuesday, to broadsides and bromides like this one from Matt Wood, policy director of Free Press: “The data caps being pushed by the biggest cable companies are bad for consumers … and the FCC should be investigating these caps, not endorsing them.”

But enough about broadband billing per se.  The more noteworthy thing about Genachowski’s comment is that this marks at least the third time that he has demonstrated his independence from the louder voices among communications policy outfits.

The first time was with the FCC’s adoption of what came to be called “net neutrality lite,” and the second was when he hired Steve Waldman to head up the agency’s “future of media” report, a document that steered clear of the most intrusive and inappropriate kinds of recommendations that had been proposed for it.

None of this is to say – nor would the gentleman necessarily welcome our saying – that Mr. Genachowski is the very model of what one looks for in an FCC chairman.  Though the net neutrality regulations are much better than what they might have been, better still would be no such regulations at all.

Still, in an environment as divisive as Washington’s, it’s probably a good idea once in a while to step outside of it all and give credit where credit is due.  So props to Julius Genachowski for his embrace of usage-based broadband billing.  ’Tis a fine thing he’s done.

                                     

The opinions expressed above are those of the writer and not of The Media Institute, its Board, contributors, or advisory councils.

 

Posted on By Patrick Maines

The Truth Behind Google’s Copyright-Bills Hysteria

Though the final chapter in the legislative history of the copyright bills hasn’t yet been written, a couple things are obvious even now: The tech industry has demonstrated great political clout through the mobilization of its users and fan base; and the industry lobby, led by Google, will say and do pretty much anything to advance its commercial interests.

This provides the background for what happened within just a few days last week, as Congress was flooded with calls and mail, and petitions were signed by millions, in opposition to bills whose intent was to provide an effective way to combat content infringement on rogue websites abroad.

Didn’t matter that most fans of social media, file-sharing, blogs, and the like know next to nothing about communications policymaking, or even the details of the laws they were moved to oppose.  They know what they like, and dislike, and when manipulated into seeing the copyright bills as a threat they responded in great numbers.

None of which, of course, is to wonder why people feel more of a kinship with things like the social media than they do with the mainstream media.  The one-way and “one-to-the-many” aspects of the old media don’t empower people, or allow for their personal expression, in the manner of blogs or social media like Facebook and YouTube.

But the reason so many people were disposed to dislike the copyright bills, and their knowledge of what was actually in them, are two different things.  What moved them to act on their dislike was yet another.  For these parts of the story we have to look to the tech industry lobby, and Google most importantly.  It was Google that floated the canard that passage of the bills would forever change “the Internet as we’ve known it.”

The irony in Google’s claim was apparently lost on most of the media, tech and mainstream, which may explain why so few reporters pointed out that this alleged threat is word-for-word what the company said, 13 years ago, in opposition to another copyright bill (the Digital Millennium Copyright Act), passage of which has since proven to be a positive boon to Internet companies.

It may also explain why so few reporters pointed out that Google’s claims about the copyright bills – as precursors to the regulation of the Internet – are not just over the top but hypocritical.  It was, after all, Google that successfully lobbied, with the active help of a majority of FCC Commissioners, for so-called “network neutrality” regulations, the precedent of which provides not for just speculative but “here and now” regulation of the Internet.

Still, if crass exaggeration and hypocrisy were all that Google displayed in this regard, one might be inclined just to dismiss it as boys being boys.  But it didn’t stop there.  Google, and other groups that should know better, also gave expression and currency to the bunkum that the copyright bills amounted to an assault on the First Amendment.

That this argument was utterly demolished by the country’s leading First Amendment expert, Floyd Abrams, didn’t give them a moment’s pause, with the upshot being that this nonsense was parroted by all sorts of people as a reason for rejection of the bills.

In August of last year, The Media Institute filed a white paper with the Federal Trade Commission titled “Google and the Media: How Google is Leveraging its Position in Search to Dominate the Media Economy.”  Among other things, the paper demonstrated the ways in which Google profits from copyright infringement; that indeed the use of other people’s content without their permission has been at the heart of the company’s business plan.

Though the paper didn’t recommend any particular remedy, it asked the FTC to intervene in a way that would prevent the media economy from being dominated by a single entity.  Google’s conduct regarding the copyright legislation shows that, far from pulling back, its interest in this kind of domination is growing apace.

                                  

The opinions expressed above are those of the writer and not of The Media Institute, its Board, contributors, or advisory councils.  This piece was first published in the Dallas Morning News on Jan. 25, 2012.

 

Posted on By Patrick Maines

Rationalizing Theft: A Postscript

The fight over the copyright bills currently being considered in Congress puts on display two of the tech industry’s least attractive characteristics – its sense of entitlement, and its extraordinary lack of knowledge about things outside the area of its core competency.

So it is that the bills in question (the Protect IP and Stop Online Piracy acts) are said by the tech industry’s lobbyists and fan base to threaten the “end of the Internet as we’ve known it,” the same claim they made 13 years ago in opposition to the Digital Millennium Copyright Act.  (And we all know how that worked out.)

As mentioned in an earlier post, all of the techies profess to have an interest in preventing copyright infringement; it just happens that they oppose anything and everything that’s ever been (or will be) proposed for the purpose.

The earlier blog scored the hyperbolic, not to say hypocritical, aspects of the criticism being leveled at today’s copyright bills.  But after reading additional criticism of them published since, it’s clear that I overlooked something.

Though most critics don’t come right out and say so, much of the criticism of the bills springs from people who, convinced that industries like Hollywood and the traditional media are of less importance than the Internet, believe that for this reason copyright laws ought to favor the latter over the former.  As one techno-philosopher, commenting on a piece in TechCrunch put it: “The Internet is the new entertainment industry.”

One needn’t dispute the current and future importance of the Internet (and all things digital) to know that this is an inapposite and corrosive argument, for the simple reason that copyright protection was never designed to be meted out in proportion to the financial dimensions of a company or industry.  It’s a constitutional law that is meant to protect all copyright holders, whatever their commercial girth or market caps.

To put it another way, the Constitution does not have to accommodate industries; industries have to accommodate the Constitution. This is, after all, one of the reasons we call our own a nation of laws.

Because The Media Institute is not a lobby, we’re not in a position to know whether the House or Senate bills will pass either body.  We read that some softening of them may be in the cards, though the recent forceful testimony in support of the bills, as written, by Register of Copyrights Maria Pallante would seem to suggest otherwise.

Whatever the outcome, one thing has been made clear by the tech industry’s shrill opposition.  If U.S. copyright laws – and those people and industries that rely on them – are to survive, there will have to be a far more sophisticated and generous understanding of the value in copyrights generally.  As Ms. Pallante chillingly put it in her remarks to the House Judiciary Committee: “It is my view that if Congress does not continue to provide serious responses to online piracy, the U.S. copyright system will ultimately fail.”

                                  

The opinions expressed above are those of the writer and not of The Media Institute, its Board, contributors, or advisory councils.

Posted on By Patrick Maines

Rationalizing Theft: The Technology Lobby’s Attack on Copyright Legislation

The technology crowd’s objections to the copyright protection bills, now moving their way through Congress, put one in mind of H.L. Mencken’s crack that criticism is prejudice made plausible.  This, because that industry’s leaders, scribes, and think tanks uniformly oppose every legislative initiative aimed at protecting copyrighted content, even as they frequently give lip service to the concept .

From the Digital Millennium Copyright Act (DMCA) in the late ’90s – which they fought tooth and nail, but cling to in today’s debates as though it were an uncle come to jail with money for the bail bondsman – to today’s Protect IP and Stop Online Piracy acts (good summaries of which are here and here), the techies profess all sorts of high-minded concerns, but never at the expense, you understand, of their business plans.

Take, for instance, Google, the 800-pound gorilla, inside and outside the Beltway, regarding all things digital.  The company’s executive chairman, Eric Schmidt, claims that attempts to crack down on rogue sites profiting from copyright infringement could set a “disastrous precedent” for freedom of speech, and also that they would encourage more restrictive Internet policies in countries like China.

This is serious stuff, and would be more serious still if (a) it were true, and (b) it issued from a company with any public policy credibility in this regard.  Alas, neither is the case.  Let’s start with the credibility problem first.

The best example of a U.S. policy that really would have (or might still) set a bad precedent regarding repressive regimes abroad is the FCC’s recently concluded Network Neutrality proceeding.  Indeed, in March of last year the U.S. Coordinator for International Communications & Information Policy at the State Department, Philip Verveer, had this to say about the subject at a Media Institute luncheon in Washington: “The net neutrality proceeding is one that could be employed by regimes that don’t agree with our perspectives of essentially avoiding regulation of the Internet … it could be employed as a pretext or as an excuse for undertaking public policy activity that we would disagree with pretty profoundly.”

Though there are those, of whom I’m one, who think the FCC’s subsequently enacted Internet rules, though greatly watered down, still went too far, the more interesting thing to note in this regard is that Google was the leading figure among those lobbying in support of net neutrality.

In the summer of 2006, for instance, Eric Schmidt himself penned a note on Google’s Public Policy Blog that read in part:

The Internet as we know it is facing a serious threat.  There’s a debate heating up in Washington, D.C. on something called “net neutrality” – and it’s a debate that’s so important Google is asking you to get involved.  We’re asking you to take action to protect Internet freedom….

Creativity, innovation, and a free and open marketplace are all at stake in this fight. Please call your representative and let your voice be heard.  

And then there’s the argument, made by Google and lesser apologists of unfettered infringement, that the Protect IP and Stop Online Piracy acts undermine the speech guarantees of the First Amendment.  Whether it’s because they like the sound of the accusation, or because, not knowing any better, they actually believe it, there’s a lot of this nonsense going around the technocracy.

They might be more cautious about making such claims if they read the First Amendment analysis of the Protect IP Act written by the most distinguished First Amendment scholar of our age, Floyd Abrams.  In a 12-page letter sent on May 24 to Senate Judiciary Committee members Leahy, Hatch, and Grassley, Abrams lays out a compelling argument that the Act is consistent with the First Amendment, and concludes with these observations:

Among a range of objections, two core critiques stand out.  First, there is a recurring argument that the United States would be less credible in its criticisms of nations that egregiously violate the civil liberties of their citizens if Congress cracks down on rogue websites.  Second, there is the vaguer notion that stealing is somehow less offensive when carried out online….

I disagree.  Copyright violations are not protected by the First Amendment.  Entities “dedicated to infringing activities” are not engaging in speech that any civilized, let alone freedom-oriented nation protects.  That these infringing activities occur on the Internet makes them not less, but more harmful.  The notion that by combating such acts through legislation, the United States would compromise its role as the world leader in advancing a free and universal Internet seems to me insupportable.  As a matter of both constitutional law and public policy, the United States must remain committed to defending both the right to speak and the ability to protect one’s intellectual creations.  This legislation does not impair or overcome the constitutional right to engage in speech; it protects creators of speech, as Congress has since this Nation was founded, by combating its theft.

Abrams’ last point is especially noteworthy.  Not only is the current concern with copyright protection  nothing new, it is in fact as old as the country itself.  Reading the overwrought diatribes of the tech community one might get a different impression, but in fact it’s all there in black and white, among the “enumerated powers” in Article 1, Section 8 of the U.S. Constitution.

For those who have forgotten, or never knew, this so-called copyright clause empowers Congress “To promote the Progress of Science and the useful Arts, by securing for limited Times to Authors and Inventors the exclusive right to their respective Writings and Discoveries.”

Language and wisdom, that is to say, that is not the contemporary creation of the heads of the motion picture studios, but of the Founding Fathers more than 200 years ago.

                                  

The opinions expressed above are those of the writer and not of The Media Institute, its Board, contributors, or advisory councils.

Posted on By Kurt Wimmer, Esq.

Media Institute Response to ‘The Truth About Google, Search, and the Media Industry’

GUEST BLOG

[EDITORS’ NOTE:  Kurt Wimmer is a partner in the Washington, D.C., office of Covington & Burling LLP.  He is chairman of The Media Institute’s First Amendment Advisory Council, and is the principal author of the Institute’s white paper to the Federal Trade Commission about Google’s practices.  The article below is in response to the rebuttal of Oct. 6 by Adam Kovacevich of Google, which can be found on this site.]  

By Kurt Wimmer, Esq.

When Google wrote the Media Institute about the white paper we submitted to the FTC (“How Google is Dominating the Media Economy”), Patrick Maines invited Google to respond on this blog.  Frankly, we were pleased that we’d prompted a frank conversation about Google and the future of media.  We expected and were ready to welcome energetic disagreement with our position; after all, one of the Media Institute’s underlying missions is promoting a diversity of voices on major public policy issues.

But instead of deepening the debate, Google dusted off talking points that it’s been using for years, most of which our paper readily acknowledges. 

We don’t question, for example, that Google News drives some traffic to some publications’ websites.  Most viewers of Google News do not click through to any of the media sites from which Google scrapes content – about half of all users go no further than Google News and thus do not generate a dime for the content producers.  But we know that some traffic does flow from Google News to publishers’ sites.  We do have serious doubts about the “value” of this traffic, and we worry that, as it has in other areas, Google increasingly uses its News page to cannibalize whatever value there is.  Whether these websites can “opt out” of News is unhelpful because of the predicament News puts publishers in – opt-in, and feed the Google monster; opt-out and starve alone.  Our concerns do not relate to publishing only; as our paper pointed out, Google Places is following the Google News model in using its search dominance to scrape and scuttle local review websites.  Google’s response breezily ignores these points.

We have the same objections to Google’s treatment of Books and YouTube in its response, which again relies on broad statements rather than engaging in any serious debate.  Google simply bypasses our basic premise, which is that it has used its scale to coerce content makers into accepting the Google business model.  Google claims legal victory in the dispute between YouTube and Viacom, but the Second Circuit won’t hold oral argument to settle the matter until later this month.  Given the brazen evidence that YouTube was founded and grew on a business model of copyright infringement, we believe that Viacom is likely to take the upper hand – but we won’t claim victory until the Second Circuit rules, and suggest that Google should do the same.

And Judge Chin’s concerns about the Google Books Settlement have left that agreement hanging by a thread.  Though we disagree with Google’s legal arguments in both cases, we wouldn’t have criticized Google for offering an outspoken defense of those positions.  But Google, rather than addressing the colossal quantities of content it stockpiles at the expense of creators and competitors, offers only the same hollow defense: We bring books and video to a wider audience.  This is no help, in our view, given the costs that Google’s response sidesteps.  Infringement always brings works to a “wider audience” – an audience that the creators of the works did not agree to serve for free, and one that does not fund the creative spark that created the works.  In fact, both Google Books and YouTube exist not to bring works to a wider audience, but to create dominant platforms for works that deny creators the benefit of a competitive marketplace.

The rise of Google’s dominance in media deserves a candid discussion, both here and at the FTC.  We wish Google had contributed something new to the discussion, rather than just reiterating its weary talking points.  We would welcome any additional comments that Google would like to make in defense of its position or in rebuttal to our white paper.

                                   

The opinions expressed above are those of the writer and not necessarily of The Media Institute’s Board, contributors, or advisory councils.

Posted on By Patrick Maines

Response to The Media Institute White Paper: The Truth About Google, Search, and the Media Industry

GUEST BLOG

[EDITORS’ NOTE: In this space we offer Google an opportunity to take issue with the White Paper that The Media Institute filed with the FTC in August.  Google’s response is printed below exactly as we received it.]

By Adam Kovacevich, Head of Competition, Public Policy and Public Affairs, Google (Washington, D.C., office)

In August 2011, The Media Institute submitted a white paper to the Federal Trade Commission claiming that Google practices could “foreclose competition” in the media industry. The white paper largely restates past criticisms of Google on copyright and intellectual property issues. We appreciate the opportunity to post a rebuttal. Some of these criticisms are obsolete or have already been litigated; others we believe are just wrong. Here are the facts:

Google Has a Record of Helping the News Industry

Google News drives valuable traffic to news organizations’ websites for free. Each click from Google News to a publisher’s site is a business opportunity, offering newspapers and other publishers the chance to show ads, register users and earn loyal readers. Google News follows international copyright law by only showing users a headline and a short snippet for each news story.

Google sends news publishers more than 4 billion clicks each month. Google News provides about 1 billion of these clicks, and an additional 3 billion come from other Google services like web search. This means that Google sends approximately 100,000 business opportunities to publishers every minute.

Google News works with publishers by offering them useful tools. For example, Editors’ Picks is a feature that enables editors in newsrooms to identify the stories they believe should receive attention. Additionally, the new “standout” tag on Google News gives publishers the ability to self-designate unique and noteworthy content from their own or other publications. Articles tagged as “standout” may appear with a “Featured” label on the Google News homepage and News Search results. [Google News Blog, Aug. 4, 2011, Sept. 24, 2011]

News Organizations Can Easily Opt-Out of Google News

News publishers have control over their inclusion in Google News. If at any point a web publisher wants Google to stop indexing their content, they’re able to do so quickly and effectively by sending Google an opt-out request. Google also provides publishers with instructions to block their content from Google News, should they choose to do so. [GoogleNewsBlog, Dec. 2, 2009]

Opting out of Google News does not remove content from Google Web Search results. If a publisher opts out of Google News, but stays in Web Search, their content will still show up as natural web search results. [GoogleNewsBlog, Dec. 2, 2009]

Google Is Investing in the Future of Journalism

Google donated $5 million to nonprofits devoted to developing journalism in the digital age. $2 million went to the John S. and James L. Knight Foundation, a nonprofit that supports programs that drive innovation in journalism. The Knight Foundation used half of its grant to augment the Knight News Challenge, a media innovation contest that recognized 16 winners in 2011. [Official Google Blog, Oct. 26, 2010, June 22, 2011]

Google and the Associated Press are offering six $20,000 scholarships to journalism students to encourage and enable innovation in digital journalism. The Online News Association, the world’s largest membership organization of digital journalists, will administer the program. [OfficialGoogleBlog, Aug. 15, 2011]

Google Books Helps People Discover Books, Benefiting Users, Authors and Publishers

Google Books helps readers find information and gives authors and publishers a new way to be found. For instance, the Google Books Partner Program enables publishers to promote their books online for free — so that users can search through them, and find out where to buy them or get them from a library. More than 40,000 partners have joined the Partner Program, including nearly every major U.S. publisher. [GoogleBooksBlog, May 23, 2011]

Google will work to make more of the world’s books discoverable online. The March 2011 decision by Judge Denny Chin to reject the Google Books settlement was disappointing, but Google is reviewing the Court’s decision and considering various options. We believe this agreement has the potential to open up access to millions of books that are currently hard to find in the US today. [GoogleBooksAgreement]

Google Helps Rights Holders Manage Their Presence on YouTube

YouTube created Content ID to help rights holders manage their content on YouTube. Managing rights for content owners on YouTube has been important since the site’s early days. In 2007, this strategy led to the creation of a new technology called Content ID. Content ID is a full set of audio and video matching tools that give rights holders fine-grained controls for managing their content if someone uploads it to YouTube. Rights holders have the option of blocking, tracking, or making money from videos containing their content. More than 100 million videos have been claimed with Content ID. [YouTubeBlog, Dec. 2, 2010]

Content ID helps rights holders monetize their content. More than 1,000 partners use Content ID. Rights holders who claim their content with Content ID generally more than double the number of views against which YouTube can run ads, which doubles the rights holders’ potential revenue. Content ID contributes more than a third of YouTube’s monetized views each week. [YouTubeBlog, Dec. 2, 2010]

YouTube won its copyright case against Viacom. In June 2010, a federal court decided against Viacom in its copyright infringement lawsuit against YouTube. The court ruled that YouTube is protected by the safe harbor of the Digital Millennium Copyright Act if it works cooperatively with copyright holders to help them manage their rights online. [OfficialGoogleBlog, June 23, 2010]

Google Does Not Block Other Search Engines from Crawling YouTube

Bing and Yahoo both display YouTube videos on their search engine results pages. A search for [rebecca black friday] on Bing and Yahoo displays the YouTube video as the fourth result on Bing (following two Wikipedia entries and a Bing Images result) and as the third result on Yahoo (following two Wikipedia entries). [Bing | Yahoo]

                                  

The opinions expressed above are those of the writer and not of The Media Institute, its Board, contributors, or advisory councils.