Leaked documents from the Federal Trade Commission’s 2012 investigation of Google show that the Obama administration closed the investigation despite sufficient evidence of market distortions and threats to competitions.
The Federal Trade Commission had the chance to stop Silicon Valley from dominating the internet but closed the investigation. A leak to Politico of agency documents about the 2012 Google investigation exposes that despite sufficient evidence of market distortions and threats to competition presented by the agency’s lawyers, the five commissioners of the FTC deferred to uncertain speculative claims by their economists. Records about the 2012 investigation suggest the FTC was bending to political pressure from the Obama White House which was bending to political pressure from Google.
William Kovacic, a former FTC chair under President George W. Bush, reviewed more than 3,000 pages of documents leaked to Politico. He stated that the agency overlooked “what many experts and regulators would consider clear antitrust violations,” calling the specificity of issues outlined “breathtaking.” Though an independent agency, four of the five commissioners of the FTC were selected by the Obama administration. In 2012, Google employees were the second-largest source of campaign donations by any single U.S. company. Not only were Google employees senior aides at the White House, but Google executives also served on White House advisory panels.
On the day Obama was elected to a second term, Eric Schmidt, Google’s then-executive chairman, “personally oversaw a voter-turnout software system for Mr. Obama,” according to the Wall Street Journal. The frequent contact continued between Google and the White House during the FTC’s investigation. In 2015, a report published by the Wall Street Journal expressed the “unusual” depth of Google’s engagement with the Obama administration as the company had clocked 230 meetings with senior White House officials.
Brought nearly a decade later by the Trump Department of Justice, the FTC’s antitrust attorneys settled that Google was breaking the law by “banishing potential competitors” with a series of exclusionary contracts on mobile phones which forms the basis for the lawsuit. However, the FTC’s economists asserted that allegations of Google’s market dominance were baseless and would soon give way to competition. The economists claimed that Google only represented 10 to 20 percent of the referral traffic to retail sites. However, evidence from staff attorneys state that Google’s referral traffic to retail provided closer to 70 to 90 percent.
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ARTICLE: GABRIELLA ANTOS
POLITICS EDITOR: CARSON CHOATE
PHOTO CREDITS: THE FEDERALIST