The New York Times once called former President Barack Obama the “Regulator in Chief,” so why would his administration pass up the chance to regulate Big Tech a decade ago?
“Once a presidential candidate with deep misgivings about executive power, Mr. Obama will leave the White House as one of the most prolific authors of major regulations in presidential history,” The Times said about him in August 2016, citing his “560 major regulations” passed in his first seven years in office.
But despite those hundreds of regulations in Obama’s legacy, the administration let Google amass unchecked power by committing key errors in its investigation and letting the company off the hook, a 312-page cache of confidential internal Federal Trade Commission documents published Tuesday by Politico revealed.
After opening an antitrust probe and spending 19 months investigating, the FTC commissioners voted 5-0 to close the case without further action in January 2013.
Notably, four out of five of those were Obama appointees.
Investigators discounted the potential of revenue from targeted ads and miscalculated the role smartphones would play both in Google’s ability to dominate the market with its Android operating system and customers’ preference for using their smartphones that unfairly advantaged its search engine.
In fact, the customer review company Yelp testified that 92 percent of its traffic came from Google, and shopping sites like eBay and TheFind similarly reported that more than two-thirds of their referrals came from the search engine, exemplifying how these companies relied too heavily on one search engine for the majority of their business.
The FTC also failed to penalize Google for its intentional algorithmic change that funneled traffic away from competitors to its own sites in a decision that later prompted the U.S. Department of Justice to file an antitrust lawsuit in October.
Jon Leibowitz, then the FTC chair, told reporters at the time of the probe there was “some evidence” Google had done this, but that ultimately “on balance we did not believe that the evidence supported an FTC challenge to this aspect of Google’s business under American law.”
The memos also revealed that the FTC attorneys were in favor of regulation, but that ultimately the commission decided to leave Google alone based on the economists’ recommendations — with only a “voluntary commitment” from Google to make their algorithm fairer.
It appeared that investigators understood that Google was moving toward a monopoly on the ad, search engine and smartphone fronts, but either didn’t understand or didn’t care that the company would be free to gobble up market share with so few impediments.
To date, Google is now embroiled in three massive antitrust lawsuits that would have been avoided if the FTC had clipped its wings back in 2013, according to The Times.
Google responded to Politico’s revelations, calling it “old news” in a statement to the news outlet.
“A bipartisan FTC voted unanimously to close its investigation into Google nearly a decade ago — supported by recommendations by all of the FTC divisions including the Bureau of Competition, the Bureau of Economics and the Office of General Counsel,” Google spokesman Peter Schottenfels said.
“In closing its investigation, the FTC stated that our changes to Google Search were procompetitive and benefited consumers,” he added.
“And in the eight years since, competition in search has only increased as people have more ways than ever to access information online, including through an array of dedicated mobile apps.”
These recent revelations have lawmakers calling for action, including Colorado Rep. Ken Buck, the highest-ranking Republican on the House Judiciary Committee’s antitrust panel.
“The Obama/Biden Administration let Google off the hook and allowed them to continue to expand until they became a monopoly,” he tweeted.
“Congress must act now to rein in the power of Google and Big Tech.”
Republican Sen. Josh Hawley of Missouri called for an overhaul to the FTC, saying in a statement the FTC “lacks teeth” and expressed support for closing the “revolving door” between the commission and the companies it investigates.
That revolving door is a big problem, as The Intercept reported that nearly 250 people moved back and forth between the White House and the tech giant during the Obama administration, including one of the commissioners who now works for a law firm that has represented Google.
It’s possible that it was regulators’ lack of foresight that allowed Google to escape the probe unscathed, but the closeness between the Democratic administration and the company may have something to do with it.
In addition, it’s probable that the lovefest will continue since employees at tech companies like Google, Amazon, Apple and others donated more than $15.1 million to President Joe Biden.
Meanwhile, Twitter and Facebook have blocked news articles unfriendly to Democrats and even silenced former President Donald Trump while he was still a sitting president.
The Obama administration missed this opportunity, and either by commission or omission allowed Google’s parent company to grow unchecked into the $1 trillion powerhouse it is today.
The symbiotic relationship between Big Tech and government is hard to ignore and dismiss in light of the information revealed this week. Whether it continues this way is still unknown.