Marvin Ammori

Several news reports suggest that, after a wide-ranging 19-month investigation of Google’s business practices, the Federal Trade Commission is near to closing its investigation of Google. Early reports also suggest that the FTC found that Google’s business practices did not harm consumers or violate applicable antitrust laws. Specifically, the FTC seems to have rejected the Google competitors’ core antitrust arguments: that Google uses its search algorithm to preference its own products over that of its rivals. Politico this weekend reported that Google will be making some voluntary commitments regarding use of snippets, and AdWords-exclusivity arrangements. At the same time, the FTC and Google are also settling a (somewhat different) matter regarding whether Google can seek injunctions when it asserts “standard-essential” patents.

The coalition of competitors lobbying for an FTC investigation and seeking a federal antitrust case, called FairSearch, is already expressing disappointment. Last week, the coalition, which includes Microsoft, Foundem, and Hotwire, started asking the Department of Justice to repeat all the FTC’s work and start a new investigation of Google. Today, FairSearch issued a statement to the effect that the FTC was failing on the job unless it takes action “to permanently end Google’s biased display of search results.” It has also argued that “voluntary commitments” aren’t enforceable.

FairSearch’s words and actions reflect a little desperation. There is almost no way the DOJ would repeat the FTC’s lengthy investigation: our nation has two antitrust agencies who split rather than repeat the immense work of antitrust enforcement. It’s not a legal gauntlet, where companies must survive one antitrust agency after another, applying the same law. The FTC heard the complaints of Google’s competitors and it investigated them. Just because FairSearch failed to persuade the FTC does not mean that it should have another opportunity, with the same law and facts, at a different antitrust agency. Plus, to the extent that Google might be adopting some voluntary commitments, the FTC could enforce them under their strongest source of jurisdictional power: the FTC can act against deceptive practices. If Google even “voluntarily” commits to certain actions in the market and doesn’t abide, the FTC would have a stronger case than it would have under “unfairness” or even traditional antitrust principles. If we were talking about a different agency, I’d be more skeptical, but the FTC is not shy about going after such deception.

It is not surprising that the FTC rejected the search-bias arguments. As we, and others, have explained (see here and here), those arguments were evidently flimsy as a matter of fact and as a matter of law. For example, there is no way to define a “neutral, unbiased” search algorithm. The point of a search engine is to discriminate in favor of particular results for particular users, even if every website wishes to be listed first. A technical committee or government agency could not easily enforce search “neutrality.” Google’s competitors, like Bing, engage in the same practices. And consumers appear to benefit from many of the activities about which the competitors complain. FairSearch made its best case on search-bias, in public and private, and it was not a strong one.

I am looking forward to seeing the full details when the settlement is announced. I have written quite a bit about the antitrust investigation; I’ve focused on the issues of search “bias,” snippet-use and fair use, and transparency, each of which will be the topic of much discussion in tech and antitrust circles.

I haven’t written very much about the patent issues yet, but hope to do so soon.

Also–as readers of this blog are aware–Google is a client of my law firm on a range of issues, and  I have advised them during the FTC investigation. These thoughts are mine, and shouldn’t be attributed to anyone else, including Google.

Today, Politico ran an op-ed I wrote about the importance of ensuring fair use while enforcing competition policy. At the moment, the FTC is investigating Google for antitrust issues. The allegations against Google are many, and often changing, but I focus on one particularly problematic allegation: that Google is acting anticompetitively through quoting competitors’ content, even though Google relies on the fair use exemption in copyright law.

Of all the allegations leveled by Google’s competitors, I think this one might be the most dangerous argument for the broader Internet. It could provide copyright-like protections (a new “ancillary” copyright) that would expand the already-inflated copyright protections that can restrain users’ ability to access, find, and share information.

Here is a part of the Politico op-ed. It’s run in “Politico Pro,” meaning it’s available only to some readers (premium users). I believe in a few days, it will be removed from the paywall and available to all readers. Here is an excerpt (thanks to the fair use doctrine).

Opinion: The FTC and Google’s supposedly anti-competitive quoting

By Marvin Ammori

11/29/12 5:24 AM EST

Last month, a lawsuit over 10 words made headlines. The estate of author William Faulkner filed a copyright infringement suit against Sony Pictures because Sony’s 2011 Woody Allen film, “Midnight in Paris,” used a well-known, 10-word quote from a 1950 Faulkner novel. Coming less than a year after Wikipedia and Reddit blacked out their sites to protest controversial copyright legislation known as SOPA, Time magazine called this suit another example of copyright “getting out of control.”

Granting Faulkner’s estate these rights would harm creativity in film, but an antitrust agency in Washington may inflict even more damage to the Internet through another theory providing legal protection for short quotes.

Since June of last year, the Federal Trade Commission has been investigating Google based on allegations that the company’s actions are anticompetitive. The Financial Times reported last week that the FTC is considering one theory that could run straight into the buzzsaw of copyright law, as well as the First Amendment doctrine enabling us to quote authors. At the same time, it would likely ensure that the FTC and Google lock into years of litigation.

The agency is reportedly reviewing how Google crawls and displays short snippets of content from review websites. The crux of the theory is that Google displayed review snippets from Yelp and TripAdvisor and in Google Places, its local search tool.

Politico also ran an opposing op-ed from FairSearch, the coalition of companies, led by Microsoft, seeking the antitrust investigation against Google.

As most readers of this blog know already, my law firm and I do some work for Google, but I don’t speak for Google, only for myself.

Update – 2:55 PM

If you want to learn more about fair use, see this great explanation by Mike Masnick at Techdirt.

Bloomberg reports today that the FTC is reconsidering some aspects of its ongoing antitrust investigation of Google. According to the story, agency officials are not certain of the legal strength of a claim that Google preferences its own products and services over those of its competitors. In addition to the legal hurdle, the officials are trying to figure out if such preferencing actually provides “benefits to consumers” that “outweigh any harm suffered by rivals.”

If this story is accurate, it’s a good sign. Companies like Microsoft, Yelp, Nextag, Foundem, and others have aggressively made their case, flawed as I think it is, not only to the FTC, but also to Congress and in academic and legal circles. The FTC has taken their claims seriously and investigated them. But these competitors have leveled many allegations that are either factually disputed or likely to benefit consumers and could not even amount to a claim under antitrust law.

If the FTC ultimately decides not to advance some claims, it is not for lack of taking allegations seriously. Google’s competitors have had a lot of time to make their case. Having now put it forward, they have revealed just how weak it really is.

Disclosure: As we always note, Google is a client of the firm. We have been retained by the company to advise on these issues. But here I do not speak for the company, only for myself.

Barbara van Schewick has impeccable timing.

Her seminal book on network neutrality —Internet Architecture and Innovation (2010)–has just come out in paperback and Kindle in the midst of the D.C. Circuit litigation about the FCC’s Open Internet rules and the same exact week that the three most prominent network neutrality organizations–Free Press, New America Foundation, and Public Knowledge–announced they would file the first Open-Internet complaint against AT&T for its treatment of FaceTime for the iPhone 5.

I will probably have more to say about the FaceTime case. Let’s set aside for now whether AT&T’s behavior is violating the letter of the FCC’s Open Internet rules (as these organizations assert). You might want to understand more broadly whether AT&T’s behavior is harmful and what impact it may have on innovation in the Internet ecosystem.  You might have heard someone say “I don’t use FaceTime and Verizon and Sprint allowing FaceTime with their basic data plans, so where is the problem?” Van Schewick’s book answers all these questions. It explains why banning this kind of behavior is important, how users are harmed by it, and also why competition doesn’t solve the problem.

The book came out in hardcover back in July 2010, and so was also well-timed. It was six months before the FCC finally adopted their Open Internet rules, just in time for every tech policy wonk in the White House, FCC, and Congress to read the book or buy a copy, prominently display it on their desk, and pretend they had while debating the finer points of the forthcoming Open Internet rules. There was a several month stretch during which I saw her book on the shelves of a White House staffer, a Washington Post reporter, and the head of a think tank.

For those unfamiliar with Barbara van Schewick, she is a law professor at Stanford Law School. Her work was cited repeatedly in the FCC’s Open Internet order and has shaped how all of us think about network neutrality, whether we oppose or support it, whether we’re mere civilians or government officials. Her work hasn’t just influenced the American debate and American law; European regulators are intimately familiar with her work. She is a super thoughtful scholar, driven by analytical theory and evidence, looking at the issues from every angle. You have to grapple with her objections.

Here are all her fancy titles: Associate Professor of Law and Helen L. Crocker Faculty Scholar at Stanford Law School, an Associate Professor (by courtesy) of Electrical Engineering in Stanford University’s Department of Electrical Engineering, Director of Stanford Law School’s Center for Internet and Society.

I wrote a review of the book when the hardcover came out and Larry Lessig helped get the review on BoingBoing. Many of the top thinkers in Internet policy have recommended the book and explained how much it influenced them. (Here are several of them.)

I’ll include a section of my previous review.  I thought of her analysis today in fact–I saw the CEO of Uber speak in Washington, DC and he explained how he wasn’t trying to create a company. He just wanted to create a button for 100 of his friends to press and have a nice ride roll up. It became a business–the amazing Uber now in 17 cities–out of that happy accident.

My Favorite Part

This is one of those rare books where every chapter is full of novel and important ideas. But I’ll tell you about my very favorite part. In the eighth chapter, beginning with “The Value of Many Innovators,” van Schewick presents the stories of how several major technologies were born: Google, Flickr, EBay, 37Signals, Twitter, and even the World Wide Web, email, and web-based email. I had always suspected that the “accidental” beginnings and unexpected successes of these technologies were a series flukes, one fluke after another. Rather, van Schewick explains, it’s a pattern. Her models actually predict the pattern accurately–unlike other academic models like the efficient market hypothesis and theories on valuing derivatives. These entrepreneurial stories (or case studies, to academics) are eye-opening; they’re also counter-intuitive unless you consider the management science and evolutionary economics van Schewick applies to analyze them. So if you wondered what the invention of Flickr, Google, Twitter, and the World Wide Web had in common, van Schewick answers the question.

With all the “Back to School” ads, it feels like we too need a new look for the new year.  I like this new look–clean and simple like the last, but new and with a little more color.

The Tiger Leap Foundation in Estonia is helping public schools to teach their students coding and other computer lessons. The project is using Microsoft’s Kodu, a program kids can use to build PC and Xbox games. I recently published an article in the Atlantic arguing that the US federal government should fund such courses for American public schools.

On this blog, we usually write about tech policy, the First Amendment, and an open Internet.

But I was at the Democratic National Convention this week. Obviously, I was mainly going to events related to Internet policy and seeing the speeches.

After President Obama’s speech, I went to a party with some friends. There were also some celebrities at this party. All of us were star-struck by one group of celebrities–the Daily Show cast. We’re political news junkies, and the Daily Show aspires to have “the Best F#@king News Team Ever.” We were like kids running into star quarterbacks.

I chatted with John Oliver–he was friendly and chatting with everyone. I told him I loved the song about Team Very Rich and Team Very Poor, and he tried to remember it and sang some of it for me. (That was cool.) I asked for a photo, and he handed the photo to his assistant, and they made some inside jokes to one another about whether this assistant was his “First Assistant” or his “Second Assistant.” They both found the joke funny.

Seeing this interaction with the assistant, and to mess with John Oliver, my friend Seth Bannon handed his own camera to John Oliver and said, “Hey, I’d love a picture with your assistant. Could you take it, John Oliver?” This photo would reflect the spirit of inclusion we heard about in Joe Biden’s speech. Seth is the CEO of Amicus, which is one of Silicon Valley’s most talked about new companies, a recent graduate of Y Combinator, and is very funny and sharp.

He poses for a photo with Oliver’s assistant, everyone’s laughing, the assistant loves the attention and points a cocked finger at the camera.  John Oliver snaps a photo in good cheer.

And then Oliver hands me the camera and dashes off before I can look at it. This is the picture he took.

Translation: You might be funny, but John Oliver is funnier. Don’t even try to mess with him.

This week, Luke and I filed an amicus brief with the U.S. Supreme Court on behalf of several clients that have an interest in investigative reporting, citizen journalism, and shining a light on government actions. These clients are the American Society of News Editors, the Center for Investigative Reporting, Ars Technica, Daily Kos, Techdirt, Grist, Automattic (the company behind WordPress.com), Tumblr, Matthew Lee of Inner City Press, and MuckRock.

You can read the amicus brief here.

We filed this brief in a case concerning state freedom of information (FOI) laws that discriminate against the citizens of other states.

Most of our readers are probably familiar with the federal equivalent of these state laws: the Freedom of Information Act, known more popularly as the FOIA, gives us the right to request and receive federal government records. These “records” range from emails to memos to calendar schedules for federal officials. Each state has passed FOI laws at the state level providing similar rights to access state government records. 

Government records often underlie good investigative journalism. Journalists may file requests, analyze (state and federal) records, track down sources, and write up breaking stories for their readers. Because of journalists using state FOI laws, the rest of us better understand why state governments take certain actions and their spending taxpayer money. Consider a few exaxmples. Ars Technica recently published a series of articles on the use of license plate readers by state and local law enforcement—and how that use impacts our privacy. The series makes use of information in government records—obtained from state and local law enforcement agencies all over the country. Another organization, Dronewatch, filed state FOI requests to learn about law enforcement use of unmanned aerial vehicles—known as “drones.”

But a handful of states deny out-of-state residents the same access to records that is enjoyed by their own in-state citizens. Take Virginia. It will provide records to its own citizens, but will not process the requests of non-citizens.  If you’re not from Virginia, and you file a request for information about the purchase of drone technology, Virginia might not furnish the information, even though it would provide that information to in-state residents. These restrictions of non-citizens harm the ability of investigative reporters and citizen journalists—as well as their readers—to understand their governments’ actions.

The parties to the brief all have an interest in having the Supreme Court review these state FOI laws and declare unconstitutional their discrimination against out-of-states.

The American Society of News Editors (ASNE) consists of deans of journalism schools and heads of news organizations. ASNE has an interest in ensuring that journalists in any state can access records in other states.

Popular online news organizations like Ars Technica, Techdirt, Grist, and the Center of Investigative Reporting (whose projects include the Bay Citizen) investigate national stories for national audiences. But for practical reasons, they don’t have employees in every state to satisfy the residency requirements in the half-dozen states that discriminate against out-of-staters.

Moreover, today, you don’t need to work for the local newspaper—or Ars Technica—to be an investigative reporter. You might have a WordPress.com blog or a Tumblr account. You might also have an account on Daily Kos and post stories there. Only Virginia’s law even has an exception for out-of-state media organizations—but that exception is unclear, and doesn’t seem to cover online reporters and citizen journalists with a WordPress.com blog or Tumblr account.

If you don’t have the time, know-how, or resources to file requests for state records, you can turn to the online tool MuckRock for assistance.

While this case arises out of the Virginia law, the impact of this case extends to several other state laws and would benefit both traditional and online journalists.

We filed this brief at the “cert” stage: we are asking the Supreme Court to take the case, called McBurney v Young. The Fourth Circuit, the appellate court that covers Virginia, upheld the Virginia restriction. We believe that decision was wrong and are asking the Supreme Court to take the case to consider reversing the lower court’s decision. The main parties to the case have Deepak Gupta as counsel. There were two other amici briefs filed on our side, one by the transparency community (including the Sunlight Foundation) and one by the Big Data industry.

We are all asking the Court to take the case not only because of the impact on journalism (and data innovation and open government), but also because of confusion about the current state of the law. Generally, the Supreme Court is more likely to take a case when there is a “circuit split,” meaning disagreement among different circuit courts. The Fourth Circuit court, in upholding the Virginia restriction, disagreed with another court, the Third Circuit in Philadelphia. The Third Circuit had struck down a very similar provision in Delaware’s FOI law in a case called Lee v. Minner. We want the Supreme Court to eventually agree with the Third Circuit case. The Lee in Lee v. Minner is Matthew Lee, another of the parties to our amicus brief and the editor of Inner City Press.

The organizations behind this brief recognize the crucial role for access to government records in a democratic nation with a free and independent press. We believe that reversing this case will benefit journalists and all citizens. We hope the Supreme Court agrees to take the case.

On Saturday night, I had a layover of about twelve hours on a trip from Budapest, where I was able to teach in an amazing media policy course at Central European University. That layover was through Charles de Gaulle Airport, in Paris.

Finding myself in Paris, I had the opportunity to go see the Eiffel Tower, the Sacre Coeur Basilica, or the Pont des Arts. But the greatest wonder in Paris is none of those things.

It’s the headquarters of La Quadrature du Net, one of the world’s great organizations working for Internet freedom. I popped over to see Jeremie Zimmermann, the organization’s fearless leader, and to see his team working away into the late evening. On Saturday night, Jeremie and his team were preparing for this week–the week that the European Parliament would vote on ACTA, the controversial copyright/censorship treaty opposed by proponents of an open Internet. We can think of it as the European/international version of SOPA/PIPA, with an increased dose of secrecy.

For those who haven’t followed ACTA closely (most of us Americans), here are some links to read: the Wikipedia entry, Quadrature’s activism, and a page for Europeans to call their representatives. 

Here is a picture of Jeremie and me. (Yes, that’s a staircase behind the short white wall, and I’m a step or two down). And, yes, those posters all urge you say “No to ACTA”–in different languages.

Jeremie and many others were heading to Strasbourg for the vote. 

As I bid adieu to Jeremie, I was reminded of this scene in The Princess Bride (minus the miracle): “Have fun storming the castle!” Good luck slaying ACTA, and burying it for good.