Today, we’re kicking off a new feature on the blog, a weekly round up of the tech industry’s various antitrust cases and “potential” antitrust concerns. While last week’s antitrust news was dominated by competition concerns outside the technology industry (health insurers and the BCS), there were a few notable stories coming out of the world tech competition.
Amazon – Are Amazon, Wal-Mart, and Target Pricing Like Predators? | WSJ Blog
Apparently, the American Booksellers Association (representing small and independent booksellers) has written to the DOJ asking it to “investigate the book price war under way between those three retailing heavies to determine if it constitutes “illegal predatory pricing.”
In a letter dated Oct. 22, the ABA said it believes that the discount pricing—which has led to 10 of the most anticipated hardcover titles being priced as low as $8.98 on Walmart.com—amounts to such an act and that it is “damaging to the book industry and harmful to consumers.”
And a great quote from Gary Reback about why the case is unlikely to make it to court:
”Successful predatory-pricing cases are as rare as Bigfoot sightings.”
IBM – IBM Facing Double Legal Trouble | San Francisco Chronicle
The San Francisco Chronicle and IDG ask which is worse for IBM, the fact that the head of Big Blue’s Systems and Technology Group has been charged by the SEC with insider trading, or that the US Department of Justice is formally investigating alleged abuses of IBM’s mainframe monopoly. One key quote:
“Djurdjevic writes that IBM is dealing with “triple trouble,” referring to the two legal incidents and a beating taken by IBM stock. Out of the three, the insider trading allegation “probably hurt the most,” he writes… Oct. 16 may go down as a “Black Friday” in IBM history, he says.”
Google – Obama & Google (a love story) | Fortune
Fortune Deconstructs the Google Lobbying Strategy on Competition Issues and the Company’s Relationship with the Obama Administration. This article has some great insights into Google’s Washington operation and its strategy for overcoming potential competition issues. While it is clear that Google is trying to learn from Microsoft’s mistakes in the antitrust world, it hasn’t completely avoided them and is even creating some new problems. As the article suggests:
Google…likes to portray its Washington operation as a quasi-academic resource that’s above the political fray. Politicians and their staffers “are sometimes taken aback by the fact that we don’t always act the way that other companies act,” says Bob Boorstin, a former Clinton White House speechwriter who works on freedom of expression issues in Google’s Washington, D.C., office. “What we offer is technological expertise … It’s a company that’s a think tank, or a think tank that’s a company.”
Either Google is very naive about the way Washington works, or it thinks everyone else is.
Cloaking corporate interests in the “public interest” is a long-time lobbying tactic that we recently warned about in the tech sector. While the interests of corporations and the public often intersect, any company that suggests is policy interests are a mirror image of the public interests is overstating at best.
This is particularly problematics given what the article calls the “Orwellian nature of Google’s power.”
“Google is in a position to pick the winners in just about every web-based market,” says antitrust lawyer Gary Reback, who is part of the charge against Google Book Search. And, he adds, “it can do it without anyone even knowing.”
And this power is creating real concern in Washington. Google has to do a lot more than say “trust us” if it wants to quell the growing concerns about its dominance.
Eric Schmidt recently suggested to a group of reporters that Google’s culture was the strong hand that kept it from engaging in anticompetitive behavior: “If somehow we went into a room with the evil light, and we announced an evil strategy, we would be destroyed,” he said. “There is a fundamental trust relationship between Google and its users.” He shared similar comments, according to Wired, with Varney’s predecessor at the Justice Department, who apparently was floored that “trust” was Schmidt’s legal justification for pushing through the Yahoo/Google deal.
Microsoft – Microsoft/ Yahoo! Search Deal Gets Support From Major US Advertising Agency Group | Marketwatch
The American Association of Advertising Agencies, representing some of the world’s largest advertising firms, wrote the Department of Justice in support the proposed partnership between Microsoft and Yahoo! on Search and search-based advertising. The partnership is currently being reviewed by the DOJ for any potential competition issues.
“We believe that Yahoo and Microsoft’s proposal to combine their technologies and search platforms is good for advertisers, marketing services agencies, Web site publishers and consumers,” the American Association of Advertising Agencies said in a statement.
Oracle/Sun – Oracle Fails to Convince MySQL Doubters | The Register
It appears that Oracle has not convinced FSF founder Richard Stallman, MySQL founder Michael Widenius, or, most importantly, European antitrust commissioner Neelie Kroes that its acquisition of Sun and MySQL poses no competitive problems. This is a really fascinating case when you start to think about open source licensing and business models.
A spokesman for Competition Commissioner ‘Steelie’ Neelie Kroes said the Commissioner had: “expressed disappointment that Oracle had failed to produce, despite repeated requests, either hard evidence that there were no competition problems or, alternatively, proposals for a remedy to the competition problems identified by the Commission”, according to the Beeb.