Much of the search engine's dominance is down to the former president
Google appears in a US courtroom today as the defendant in the biggest competition lawsuit for two decades. This case is apparently part of Joe Biden’s mission to cut Big Tech down to size, with another lawsuit against Amazon reportedly imminent. But we should remember that the President was a member of the administration that created the problem in the first place.
With Biden as his running mate in 2012, Obama won a surprisingly comfortable victory, and by a margin far greater than his team had expected. The two candidates, Obama and Mitt Romney, were neck and neck as the poll date neared, with the Republican challenger edging into a slight lead in the critical weeks from 9 October in the majority of the polls taken. But when the counting was done, Team Obama discovered it had five million more votes than it had anticipated.
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Credit for this went to Google’s executive chairman Eric Schmidt, who had stepped down as CEO in 2011 to play a key role in the campaign, masterminding the “boiler room” on Election Day. As Bloomberg reported, Schmidt was “an underappreciated asset”, who “helped recruit talent, choose technology, and coach the campaign manager, Jim Messina”.
At the time, Google’s arch rival Microsoft was running a punchy, popular and highly personal ad campaign called “Scroogled”, featuring a cartoon of a creepy and predatory Schmidt. But more significantly, one of the two federal competition watchdogs, the Federal Trade Commission, had built a strong case that Google had abused its market dominance of searches to harm consumers and stifle innovation. A lawsuit was expected.
Within weeks of the 2012 vote, though, all the investigations were dropped, and no lawsuits were ever filed during Obama’s second term. And after pressure from the White House in the spring of 2013, according to insiders with knowledge of the talks, the Scroogled campaign was dropped too, and Microsoft and Google began to collaborate closely. The war was over.
We only know how strong the FTC’s case against Google had been when, some years later, the FTC accidentally disclosed internal material to a newspaper. FTC staff had recommended filing lawsuits on three of the four points it had investigated, alleging that Google had abused its dominant market position. Yet no lawsuits were filed because the Obama administration went soft, allowing Google and others to negotiate behavioural remedies instead.
In fact, what took place after the 2012 election was “the most extreme example of ‘regulatory capture’ we have seen in Washington in recent years,” according to the National Legal and Policy Centre. Over the next few years former Google executives, and senior lawyers at firms that Google retained, took on key roles in the Obama administration. The posts included: Assistant to the President (and her deputy), Chief Technology Officer, the head of the patents office, and, astonishingly, two of its top antitrust officers.
Since Google beat the antitrust rap 10 years ago, Big Tech’s largest companies, including Amazon, Meta and Microsoft, have grown fivefold. Google has extended its dominance into areas, like smartphones, that agencies wanted to hinder. Much of this can be attributed to Obama. As the competition activist Matt Stoller noted: “Obama’s FTC knew Google was engaged in monopolization, the lawyers said sue, and… nothing. All of this was in 2012.”
Little wonder that, free of serious scrutiny, Big Tech has flourished. But if Obama hadn’t fallen so hard for the seductive techno-utopian promises of Google a decade ago, we might not have a problem with Big Tech at all.