WASHINGTON – As reported this morning by Politico, almost 30 groups sent a letter to President Joe Biden and Attorney General Merrick Garland calling for strong antitrust leaders to fill key roles at the Federal Trade Commission and Department of Justice.
This comes in the wake of recently leaked FTC files showing the mismanagement of an investigation into Google between 2011-2013, highlighting the need for leaders in antitrust positions who will hold Big Tech accountable.
The letter was organized by Demand Progress, and includes key progressive organizations like American Economic Liberties Project, Democracy for America, Our Revolution, People’s Action, Progressive Change Campaign Committee, Revolving Door Project, and Social Security Works.
Below is the text of the letter. It is also available online here with footnotes. Please let me know if you are interested in discussing. — Maria
March 23, 2021
To President Joseph R. Biden, Jr. and Attorney General Merrick B. Garland:
We write to you as a broad coalition of organizations committed to ensuring that corporate giants engaging in anti-competitive behavior are held accountable by the federal government. As you know, recent reporting by Politico as part of a series titled the “Google Files” has shed light on the degree to which the business model of Google, a Big Tech giant currently the subject of multiple federal and state-level antitrust lawsuits, is rooted in anti-competitive practices and how the government has failed in the past to take on this behavior adequately.
By obtaining 312 pages of internal memos circulated within the Federal Trade Commission (FTC) during its investigation of Google in 2012, Politico has helped reveal the extent to which the FTC lacked leadership in that era and failed to grasp the threat to open markets posed by the company. The FTC reneged on its duty to hold the company accountable for its anti-competitive behavior, and nearly a decade later both consumers and smaller competitors alike have paid the price. These revelations further stress the need for strong antitrust enforcement at both the FTC and other federal bodies, namely the Antitrust Division of the Department of Justice.
Page 14 of the Google Files further corroborates what has long been alleged by anti-monopoly advocates: that one of the ways Google is able to retain its monopoly position in the search engine market is through anti-competitive contracts preventing the installation of rival search engines. Indeed, the documents found that Google had likely aspired to engage in similar anti-competitive practices to protect the company’s search advertising business as early as 2012. Per the documents, Andrew E. (Andy) Rubin, then a top Google executive, openly boasted about the company’s practice of entering into anti-competitive exclusivity agreements, stating in plain terms that it allows for the company to “own the US market”.
Furthermore, the leaked documents confirm widely-held suspicions that Google’s practice of reprogramming its search engine has been done to unfairly elevate Google products at the expense of competitors and consumers, rather than to tailor search results more effectively to consumers as the company has long claimed. According to the documents, “Google initially sought to demote all comparison shopping sites” through reformulating its algorithm in 2007. The corporate giant would seek further reformulation of its algorithm to the detriment of competitors over following years. One change to its algorithm in 2011 had consequences so drastic and detrimental to merchants that fellow corporate giant Amazon reported a 35% loss in traffic from comparison-shopping websites, according to information it provided to the FTC.
Per the documents, both Amazon and fellow Big Tech company Facebook privately complained to the FTC that Google’s anti-competitive business model hurt their own bottom line. As Politico reported, “Amazon was already the most successful online retailer in 2012, though it posted a loss of $39 million for the year because of heavy investments to help launch its new Kindle Fire tablet. Facebook went public in 2012 and was emerging as a key challenger to Google in online advertising.” Representatives from Facebook privately shared their concern with FTC officials that Google would enter into anti-competitive contracts with mobile carriers to mandate the installation of social media service Google+ on their platforms. Given that the company has effectively forced carriers to enter into similar clauses to elevate other Google products, this fear was clearly warranted.
Through the Google Files, competition advocates have been further vindicated in their long-standing belief that Big Tech companies like Google have engaged brazenly in activities detrimental to open markets. Perhaps more importantly, however, the Google Files have shown the degree to which many federal officials were unprepared to meet the challenge of holding anti-competitive corporate giants accountable. Leaked internal memos displayed poor judgement by these officials, who wrongly predicted that Google’s targeted advertising policies showed only “little potential for growth,” something that has been proven false in the decade since.
FTC officials additionally argued that search consumption would remain mostly conducted on computers, thereby dismissing the need to stop Google’s from mandating its search engine on mobile devices. As noted by Politico, “[t]oday, 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.” Furthermore, these documents show that FTC officials wrongfully anticipated competition to Google in the smartphone software market in addition to generally underestimating Google’s market share. It’s clear that the ability of Big Tech giants like Google to acquire monopoly power has been abetted by the leadership deficit at top enforcement agencies such as the FTC.
Consumers and smaller technology companies alike have borne the brunt of the failure of FTC leadership to hold Google accountable in 2012. As such, the federal government needs to strengthen its approach to combating anti-competitive practices, and this necessitates a clean break from past leadership of agencies like the FTC in favor of strong advocates of antitrust enforcement. As the Administration considers nominees for vital antitrust positions, such as the post of Assistant Attorney General for the Antitrust Division or for appointments to the FTC, it is crucial that it elevates people with strong track records of standing up to big corporations and Big Tech. This means eschewing individuals with backgrounds like former FTC Chair Jonathan D. (Jon) Leibowitz, who served as a corporate lobbyist prior to his appointment and has pushed for relaxing internet privacy laws since leaving the agency. The fact that many alumni of the FTC previously tasked with oversight of Big Tech have since joined the industry further stresses the need for a new approach to the personnel selection process. We need a break from past, failed leadership, and we need it now.
18 Million Rising
Action Center on Race and the Economy (ACRE)
American Economic Liberties Project
Center for Biological Diversity
Climate Hawks Vote
Demand Progress Education Fund
Democracy for America
Fight for the Future
Friends of the Earth U.S.
Jobs with Justice
Liberation in a Generation
Oil Change U.S.
Progressive Change Campaign Committee
Revolving Door Project
Social Security Works
The Freedom BLOC
United for Respect