Thread by @matthewstoller

1. Here's a little story about how Google's search monopoly kills and harms a lot of people. There's no reason for this, except that economists and Obama era enforcers chose to structure Google to let it do so. Follow along. mattstoller.substack.com/p/how-biden-ca…

2. Last week, @leah_nylen broke one of the biggest political scandals of the decade - the choice by Obama officials to not bring anti-monopoly charges against Google. The story seems like a business story, so people don't get how society-shaking it is. politico.com/news/2021/03/1…

3. We see glimpses. Like Google sending users trying to recover from addiction to sham treatment centers, and making money from ads as it does it. theverge.com/2017/9/7/16257…

4. Or Google sending people to buy fake health care plans, or fake Microsoft Windows or Netflix support. Or destroying small businesses with fake listings. Why is it that 25 years after the first web-based search engine this is happening? mattstoller.substack.com/p/absentee-own…

5. It didn't used to happen. Google used to send people to the best results. "We want to get you out of Google and to the right place as fast as possible.” That was Google cofounder Larry Page. If Yelp or TripAdvisor had a better result, that's where Google would point you.

6. In 2007, Google stopped trying to get the best result, and to try and keep people on Google properties. It became a walled garden monopoly, and excluded competitors. Today less than half of Google searches result in a click. sparktoro.com/blog/less-than…

7. As @ShiraOvide noted, "In an alternate history, maybe we’d have more and better online options." nytimes.com/2021/03/17/tec…

8. Google did what is called 'self-preferencing,' or sending users to its own results even when competitors' results were better. It signed deals to stop advertisers and phone/browser/publishers from working with rivals. It monopolized. mattstoller.substack.com/p/how-biden-ca…

9. Venture capitalist stopped investing in potential rivals, using the term 'kill zone' to describe anything in Google's path. A good specialized search engine that could have dealt with finding rehab clinics died in infancy or was never formed. Google would've killed it.

10. I often get the question, 'how is that legal?' And the answer, in this case, is that it wasn't legal. And the government had evidence - strong evidence - of what Google was doing. That's what @leah_nylen found. politico.com/news/2021/03/1…

11. There are three antitrust suits against Google today, each brought in 2020. And basically the Federal Trade Commission nine years ago knew most of it. @leah_nylen found a proposed FTC complaint and memos revealing it.

12. If they had the evidence, why didn't they bring the suit? Three reasons. One, corruption. Everyone is on the take. The only former FTC Commissioner who voted on the case and does not today receive big tech money is deceased. mattstoller.substack.com/p/how-biden-ca…

13. Google was extremely close with Obama, averaging a meeting a week at the White House. The FTC shut the case just after Obama's reelection, a campaign in which Google CEO Eric Schmidt was on election night, “personally overseeing a voter-turnout software system for Obama.”

14. Today this is wrong, but back then, Dems loved big tech. For example, in 2013, pundit Matt Yglesias wrote about Amazon, “Amazon, as far as I can tell, is a charitable organization being run by elements of the investment community for the benefit of consumers.”

15. The second is ideological. The lawyers thought that monopolization was fine, as long as it was good for consumers. So self-preferencing and killing rivals was fine, in their view. They did want to bring charges in other areas, but were overall meek.

mattstoller.substack.com/p/how-biden-ca…

16. But the biggest reason is the point of the post. Economists. The commission’s antitrust economists made a very strong, and entirely wrong, argument against the case, which in retrospect rested on a set of laughably inaccurate predictions.

17. Here are some of their assumptions/predictions.

- Consumers will continue to rely on desktop computers to search, not smartphones or tablets

- Surveillance advertising tracking users across the web have only a “limited potential for growth”

- Google is not a monopoly

18. More...

- Search engine quality isn’t primarily driven by data

- Google was not a particularly significant source of traffic for vertical search engines like Yelp

- Google self-preferencing is good for consumers

- Defaults don’t matter

These are... insane.

19. For example, the FTC economists rejected that data was the key factor in search quality. This contracted testimony from Udi Manber, who was... Google’s former chief of search quality.

What??!
mattstoller.substack.com/p/how-biden-ca…

20. Why did these economists, who are well-trained and smart, get it so wrong? And this is not a one-off. Antitrust economists are this wrong and this bad in virtually every area. Antitrust economics is irrelevant to the truth at best, and harmful at worst.

21. For example, Carl Shapiro, who was running economics at the other Antitrust agency at DOJ at the time, justified the lack of monopolization cases by saying that there simply weren't any monopolies out there. I'm not kidding. (He now gets Google $$$.) mattstoller.substack.com/p/how-biden-ca…

22. If economics were a 'science,' these people would be fired. But it's not. FTC economists spent ten years keeping this stuff secret to hide their horrific failure. During the Trump era, the only part of the FTC to receive boosts in funding were the economists!

23. Even today, the Obama status quo wing of the Democrats - like @ProfFionasm - argues that we need *more* economists in antitrust, just center left technocrats. But it was center-left economics under Obama that let Google monopolize.

24. Fortunately, Biden is breaking starkly with Obama's antitrust status quo, just as Trump broke from Bush's status quo. Trump brought a Google antitrust case. Biden appointed Lina Khan to the FTC, who will likely seek to restore anti-monopoly principles. whitehouse.gov/briefing-room/…

25. In contrast to Obama, Biden personally seems to dislike economic technocrats. In the Senate he called law and economics "“presumptuous and elitist” and "Harvard-ese ... that offends me." He's called big tech CEOs "little creeps." mattstoller.substack.com/p/how-would-pr…

26. So this is all fixable, and we are fixing it! Yes there's corruption but there are three big antitrust suits. And the GOP and conservatives, as well as Dems, are changing their approach to monopoly power. thefederalist.com/2021/03/22/lea…

27. Judges are coming out publicly attacking the entire economics-heavy frame of antitrust. And the GOP went after their own regulator, @FTCPhillips, for being useless in the face of big tech power.

https://twitter.com/matthewstoller/status/1372620313998020610

28. And all of us, normal citizens, are losing our fear of challenging technocrats and experts, who, as these documents show, are really just weirdos who scribble monopoly-friendly visions of the economy, and hide it with math.

29. To get back to Google. It's popular to say that Google won because it is the best, or that the internet killed newspapers, and just assume technology is a neutral unstoppable force. BS. In fact Google is a creature of law and regulation. We can choose, in part, our future.

30. If you liked this thread, sign up for my newsletter, BIG. I write about the open secrets that control society, which are our laws governing banks and business. All the money and power in the world is fun to learn about. So sign up. mattstoller.substack.com/welcome