It’s Not Just Antitrust! Google Undermines Property Rights and Privacy
Some hard-nosed Republicans will rail against Senator Mike Lee (R-UT) for stepping forward to support FTC antitrust action against Google—as he did in a letter released today. This anger is surely misdirected; instead, we should take the time to understand Lee’s justified and principled action.
For conservatives, the regulatory direction of antitrust enforcement strikes right at the heart of what defines a company: its property. Google has seemingly built and branded the most highly prized real estate on the Internet through innovation, investment and competitiveness. At first glance, Google could be a poster child for free enterprise. Is Sen. Lee simply encouraging big government to intervene once again in the marketplace and essentially seize and redistribute property?
But digital property ownership—of content, intellectual property and personal data—is exactly the issue that Google wants to sweep under the rug. To evaluate the need for antitrust enforcement against Google, we need to understand the extent to which Google has built its business through the abuse of the property rights of others.
Google’s search index is arguably assembled through the fair use of copyrighted content. Though Google largely does not seek permission to crawl websites, and copy and repurpose content on its own search pages, most websites—whether corporate or institutional—want to be found. That’s why they’re on the Web.
But Google has also built and maintained search on illegally copied content—and it continues to demonstrate a reluctance to address this issue. At September’s Senate Antitrust Subcommittee hearing, Yelp CEO Jeremy Stoppelman detailed how Google had scraped (or in layman’s terms, “stolen”) Yelp’s content—reviews of local businesses—and put it on Google Places. Former Assistant U.S. Attorney General Thomas Barnett told a similar story about TripAdvisor’s content.
While Google appears to have misappropriated content in the cases of Yelp and TripAdvisor, it would be hard to argue that those specific transgressions warrant wholesale antitrust enforcement and de facto redistribution of Google’s property. Google might say that it merely stretched fair use in the service of consumers—a sort of Robin Hood defense, except where the kingmaker of search steals from small search companies.
But these specific transgressions are just two examples of a larger business plan that relies continuously on the misuse of the property of others. Handsets with Google’s Android now outsell all other types of smart phones—in part because Google allows manufacturers to load Android for free. How can that be possible? According to a lawsuit by Oracle, it’s possible because Android includes Oracle’s intellectual property, used without permission. Oracle is seeking billions in damages.
Google has created an enormous database of books by photocopying millions of books, including copyrighted works without permission. This project—now being commercialized—drove away competitors who were unwilling to overstep property laws.
In the September’s hearing, Senator John Cornyn (R-TX) drew attention to Google’s embarrassing non-prosecution agreement with the U.S. Department of Justice and forfeiture of $500 million in ill-gotten gains from the promotion of illegal and counterfeit pharmaceutical ads. In this instance, Google aided other property thieves—thieves of drug patents and trademarks—in a way that put the health of consumers at risk.
And perhaps most troubling, Google has collected content from individuals—personal digital property—again without permission or transparency. It scans emails sent to and from Gmail accounts. It collected personal information from unsecured WiFi hotspots—similar to wiretapping. Through partnerships with other websites, it also collects a range of other information about us and turns this data into its own digital property. We do not want government invading our privacy—and we should not stand for Google (which is also a government contractor) to do the same.
In the Heritage Foundation’s adaptation of their First Principles Essays, they summarized Friedrich Hayek’s insights in the Road to Serfdom which “made it clear he was not advocating a system of pure lasses-faire, but one with a general system of rules that would enable individuals to carry out their own plans. Hayek’s contribution was to stress the importance of institutions – a market system, in a democratic polity, with a system of well-defined, enforced, and exchangeable property right, protected by a strong constitution, and operation under the rule of law, in which laws are stable, predictable, and equally applied.”
While antitrust enforcement has threatened marketplace competition in the past, it’s worth remembering that antitrust laws were developed by Republicans—and refined under the Rehnquist Court—to protect free enterprise. The telecommunications revolution began when Ronald Reagan enforced antitrust law and took the final step in dismantling AT&T’s government-sanctioned monopoly—and deregulating the industry. As someone who started a Competitive Local Exchange Carrier in Michigan and consults for Microsoft, I have first hand knowledge how important a limited and targeted regulatory structure can be. There is precedence for the conservative application of antitrust against companies that have benefited from growing too close to government protectors.
In conservative circles, antitrust enforcement has often been seen as a big government tool for enabling intrusion in the free marketplace. But Senator Lee—along with Senators Cornyn and Chuck Grassley (R-IA)—rightly voiced concerns about Google’s impact on consumers, small businesses and marketplace competition. It makes sense for the FTC to act on these concerns, as Lee wrote this week. The common denominator of these concerns is not just unfair competition—but unfair competition powered by property theft.