Google was right all along!

I’m Alan Chapell. I’ve been working at the intersection of privacy, competition, advertising, and music for decades, and I’m now a pundit writing for The Monopoly Report. I’m rebooting another ASK ME ANYTHING standup session this Friday, Sept. 5, at 11:30am EDT.

The latest Monopoly Report podcast is out!

 This week, I welcome Cobun Zweifel-Keegan, Managing Director of the International Association of Privacy Professionals. Cobun and I discuss key themes around U.S. state efforts to enforce on privacy AI and consumer protection. We talk about regulatory tension between the federal and state governments, the key areas of focus at the state level, and the impact of state enforcement on the ads space. Cobun also gives me a hard time about my recent prediction around a federal privacy law.

The Google search remedies decision is in!

Summer’s over, my kid is heading into kindergarten this week, and I’m sitting in a cafe in Washington, DC on Tuesday morning, waiting for my next meeting to start.

And then it hit me: I owe Ari another article.

Truth be told, I spent my Tuesday early afternoon on the Acela writing a completely different article — one about the TID controversy, which by now, most of you have completely forgotten about in the wake of Judge Mehta’s decision in the Google Search antitrust remedies trial.

My hot take on Judge Mehta’s decision

There’s lots to discuss about this decision. I’ll be talking about it with Ari on the Marketecture pod later this week. Meanwhile, you can snack on this:

1. Judicial restraint or judicial abdication - For all the talk about a new approach to antitrust, the decision reads as an admission that current antitrust law doesn't have a solution for the marketplace issues created by Google. Some may argue that the judge is applying a 1980s-era antitrust approach to the modern tech landscape — a sentiment that I share.

   In fairness, there is some precedent here when it comes to divestment (U.S. v MSFT). The judge clearly didn’t want to be overturned on appeal and erred on the side of caution. But it’s also inescapable to anyone paying attention that that the milquetoast set of remedies in this decision are tantamount to kicking the can down the road. It’s just a matter of time before Google is back in antitrust court again on many of these same issues.

   I think we’re going to look back on this moment in the same way that many look back on the FTC’s decision not to come after Google back in 2013.

2. Limited to the U.S. - I was a bit surprised that the Judge found that divestment of Chrome was also inappropriate because it exceeded the violation's geographic boundaries. In other words, the fact that Chrome’s customer base is mostly non-U.S. was used as justification. Not to be super snarky, but considering other countries' feelings is not something you see every day from the U.S.

   On a more practical level, if Europe or South Korea or even California can impose unique rules on app stores in their jurisdictions, I'm not sure why Judge Mehta was so reluctant to contemplate different ownership of Chrome for different countries. And it's been obvious for some time that the EU and UK were waiting on a Chrome decision to follow the U.S. Court's lead. And now the door is open for Google to take a similar approach re: AdX in the other remedies trial.

3. Data sharing - I've said from the beginning that this is the least likely remedy to be helpful and the most likely remedy to be gamed by Google. Will the court-imposed technical committee fare better than the UK CMA did? I'm not so sure. (I know at least two people who were vying for roles on the technical committee, but I’m not sure they’re still interested now that Chrome divestment is off the table.)

4. Search and AI indexing will remain lawless - I might have been able to hold my nose and accept the court's unwillingness to push for a Chrome divestment if the court had imposed restrictions on tying of search index collection with AI index collection by Google. Once again, the publishing industry is left out in the woods.

5. Hey, at least Mozilla is happy - Despite acknowledging that Google's revenue share payments have made the ecosystem "exceptionally resistant to change," the court declined to impose a complete ban on payments. Judge Mehta played the "unintended consequences" card, which is great for Mozilla and Opera. But I'm struggling to understand how perpetuating the status quo where Google is able to exercise control over the fate of the rest of the browser market is good for competition or consumers.

6. But, but… the EU Commission is waiting in the wings - LOL. If this press report via Reuters is correct, it would be unwise to look to the European Union to break up Google over the next year.

7. Likelihood of a breakup - I get it. The judge clearly stated “no breakup” in this case. But even more broadly (and I’m trying not to overreact to this decision), the tea leaves were not exactly screaming “divestment.” If you are counting on a breakup of Google, it’s time for some cold water. There’s a couple of points that I made in last month’s Chapell Report (ask me about a subscription).

   First, evidence is mounting (e.g., IPG-Omnicom merger, Paramount-Skydance, DOJ removal of Roger Alford and Bill Rinner) that MAGA antitrust just might be more interested in forging its own path than continuing the Kahn / Kanter enforcement approach when it comes to the business community generally.

   Second, it seems to me that optimism regarding a breakup of Google is based on the assumption that the Trump administration will continue to pursue Google antitrust enforcement differently than it is approaching it with the rest of the business community — an assumption that is starting to feel more like wishful thinking.

   And that’s a huge deal if we’re really counting on the current DOJ or FTC to come after Google again.

8. Will the DOJ appeal? - Conventional wisdom suggests that the DOJ will appeal. I mean, it’s not like they have much to lose. Personally, I’d want to think through the implications a bit first. And to my previous point, the DOJ may be tempted to take the perceived “W” and move on (as witnessed by the post-decision spin here).

9. The DOJ got Hovenkamp’d - This one is mostly for the antirust nerds. But if you told me in advance that Professor Herbert Hovenkamp would be cited 30-something times in this decision, I’d have told you that the DOJ’s proposed remedies were in big, big trouble.

CODA: Will we see a federal privacy or antitrust law soon?

This is the time of year when individual members of Congress float bills, sometimes as a way to create the appearance of solving a problem — and sometimes as a way to shed light on an issue that isn’t getting talked about enough. Personally, I’ve lost count of the number of comprehensive privacy bills floated over the past two decades, but I’m increasingly of the mind that privacy reform is futile unless accompanied by antitrust reform. In that light, a comprehensive federal privacy law will only take us so far.

A few additional thoughts:

1. Last week, I made a bold prediction that the U.S. Congress will finally move to pass a federal privacy law. My prediction apparently rang a few bells within the privacy community, many of whom may have missed the fact that my prediction was made in jest.

2. As of today, it’s more likely that we’ll see another push to preempt state-level regulation of AI (and to a lesser extent privacy) but less likely that the pre-emption will include an actual federal ruleset.

3. However (and kudos for reading all the way to the bottom), I wonder if this decision re-ignites Congress to take action on antitrust. If it happens, it’ll most likely be the Senate Judiciary Committee leading the way.

A guy can still dream…

_________________________________________________________________________

If there’s an area that you want to see covered on these pages, if you agree or disagree with something I’ve written, if you want to tell me you dig my music, or if you just want to yell at me, please reach out to me on LinkedIn or in the comments below.