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The Monopoly Report
Episode 49: Part 1 - Jon Leibowitz and the FTC's role during the early Google Era
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Friday on NBC Jimmy Fallon.
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And Bozma St. John host the incredible new competition show. I hired 10 creatives from all walks of life. They will be battling it out to see who can impress the world's biggest brands. This is a huge opportunity. This is the battle for the next big idea. This is not Play Play.
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We're spending millions of dollars.
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I'm so to embark on this adventure with all of you. May the best idea win on Brand with Jimmy Fallon Friday on NBC.
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Welcome to the Monopoly Report. The Monopoly Report is dedicated to chronicling and analyzing the impact of antitrust and other regulations on the global advertising economy. Hi, I'm Alan Chappelle. This week my guest is John Leibowitz. John is an attorney who was appointed as FTC Commissioner by President Bush in 2004, and in 2009, John was appointed as Chair of the FTC by President Barack Obama, serving until 2013. We put a link to John's full bio in the show Notes, as I'm understating his impressive career both in public service and in private practice. As I was researching this episode, I was really struck by the number of issues that John and his FTC colleagues grappled with between 2004 and 2013 and how those issues continue to impact the digital media space. Today. There's so much here and we chatted for nearly an hour and a half, so I'm going to split the interview into two episodes. In Part two, we'll talk a bit about Google's current antitrust cases, including an amicus brief in the Google Search Remedies decision that John helped author. But you're now listening to part one of the interview where John and I discuss some of his signature issues that crossed the FTC's desk over the course of the decade from 2004 to 2013. So let's get to it. Hey John thanks for coming on the pod. How are you?
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I'm doing great and thank you for having me.
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It's my pleasure. Where are you these days?
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C
I'm in Jackson, Wyoming, where we have a house and we have been spending. We spent most of the last year actually out here, and then we still have our house in Bethesda right outside of Washington, D.C. and we're back, we are back there for, you know, several months a year at least.
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B
Oh, that's fantastic. I'm in New York City. And in New York City in late September is absolutely brilliant. And the only thing that I'd rather be doing than just walking through the streets of New York on a day like today is talking policy. It's a close call, but I think I still, I still love having these kinds of discussions. So let.
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Can I tell you, there was a. There was a moose running outside our house yesterday. Actually, three moose. But I want to talk policy too.
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B
You were appointed as FTC commissioner in 2004 and served as chair from 2009 to 2012. So I'm going to start with a real easy one. I mean, what do you see as your defining issues or achievements while at the commission?
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C
First of all, the defining issues and achievements weren't just me. It was the commission writ large. We were then a very bipartisan commission, which doesn't mean we agreed on everything, but it meant that we talked pretty much every issue through before we came to a resolution. And we took a kind of utilitarian approach, I would say, to our work. You know, sort of the greatest good for the greatest number of people. And so what do I think were the things that we accomplished? I think we, we, we took on the biggest health care antitrust issue at the time, which was pay for delay pharmaceutical settlements where brands literally paid off generics to stay out of the market. And that left consumers holding the bag. We tried to get legislation through, we tried to be opportunistic, we tried to get legislation through Congress and we came very, very close, but that didn't happen. But we won a case in the Supreme Court and that saved American consumers hundreds of millions of dollars over the past 12 years. The what was happening. I'll come back to other things too, but what was happening in that market was that brand pharmaceutical companies were literally, which have very high margins, were literally paying off generics, which have tiny margins to, to sort of not enter the market. And most of the appellate courts, most of the appellate courts were on their side. In fact, every appellate court for a while. And we created a Circuit split, just like you're supposed to do. We got a case of the Supreme Court, and we won. It was one of the very few plaintiff side wins in the Supreme Court in the last couple of decades. And we're very proud of that. And that was unanimous by the Commission, Democrats and Republicans. Privacy issues. We didn't do everything we wanted to do on privacy. And I can come back to this in a minute. But we all believe that privacy was important because data belongs to consumers, not companies, and consumers deserve to control its use. And I'll come back to that in more detail later. And then I'd say another area where we had some success, but maybe not all the success I wanted was antitrust involving tech companies. We brought a major case against Intel. I can come back to. And we settled on the trial. We, some of us wanted to bring a major case against Google. But. For preferencing its own.
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B
Well, we should definitely talk about that.
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For preferencing its own products over the. Over competitors in search. But the most important rule at the FTC is the rule of three. With three votes, you can do anything you want. With two votes, you could do very, very little. So we can come back to that. But I would say if you asked me to recap our successes, I would say it was stopping a major healthcare antitrust issue and saving consumers billions and billions of dollars. It was doing a lot of work on privacy. We can come back to that, too. Whether it was suing tech companies for not honoring consumer commitments or strengthening the Children's Online Privacy Protection act, writing a report calling for legislation. And those were, I think, very successful in our own way, and then some work in antitrust tech, which I would say laid the groundwork for things that are going on now.
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B
So there was a number of, I think, signature issues. And my focus is really the ad space, the digital media space. So we're going to hone in on that. Not to say that those other things are not absolutely important, but I'd love to maybe riff on a couple of the areas. It's really. As I was preparing for this, I was really struck by how many just really, really important issues were just getting their start back during your tenure 15, 20 years ago. So the first one is do not track. Probably my favorite thing in the world to talk about on some level, because the idea of a simple button that stops tracking. I mean, am I giving you credit wrongly? Was that sort of. I don't say you're entirely your brainchild, but something that you had popularized within.
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Policy, Something I was Very involved in, I think the rest of the commission and the staff were very, very supportive. You know, again, it goes back to the notion that, you know, data is your own, it's the consumers, it's not the company's. And if a consumer wants to, wants to keep that information, particularly pii, but just any information about the consumer, they should be able to do that. They should have the right at the very least to opt out. Although I was much more personally for a right that said it's all the consumers and you have to get consumers to opt in if they, if you want to use their data now, you know, so, so it was something we tried very hard to do. We tried it, we tried to do it voluntarily by working with, as I'm sure you know, with the WC3 and companies. I think probably in retrospect we should have initiated a rule. But, you know, it's easy to look back and say, how could we have accomplished this? And at the time when we were in the midst of it, we thought we were making some progress.
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Yeah, it was sort of tantalizingly close, but in some ways a little deceptively close because it felt like you had, you know, all the markings of a standard and you had the W3C and you eventually, not you. But we eventually had the right people in the room. But at the end of the day, we couldn't get anybody to agree on what it meant to track. And that was sort of the end game because we kept thinking we were getting close to that and nobody in the room.
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C
Yes, everybody agreed at a very high level that consumers should have the right to their own information. And that do not track was a very good concept. And I can remember once going and testifying before the Senate Commerce Committee, which was our principal oversight committee, certainly on consumer protection. And I, and I mentioned the idea that we were kicking around, the idea that we were kicking around at the commission the concept of a do not track option. Because at one point, you know, the do not call registry worked very, very well. It doesn't anymore, but it did for about 10 or 15 years. And, and I remember multiple members, multiple members of the committee, Republicans and Democrats, including John Thune, were like, I want to be involved in that. But also when it came to, I would say two things. When it came to a voluntary agreement, companies with a vested interest in tracking wanted to continue tracking. Okay, that's the world we live in. And so at a high level, they liked what we were doing. At a bottom line level, it's very like privacy legislation. You know, there were all sorts of things they wanted that we, we couldn't accept. And then when I left the commission, I think that the, the, the idea probably lost a little bit of momentum. You know, we had also thought about at one point Mozilla had like a tracking, had a do not track me flag. And I kind of thought the next commission might say if you use the Mozilla do not track me flag and someone's tracking you, that's unfairness under the FTC act and we could have a challenge case and maybe someday that'll happen. But it has not happened yet. It was a great idea and one that 95% of American consumers and I would say 85% of elected officials should be supportive of and probably were.
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B
Yeah. I think what's really interesting is that the global privacy control, now that it's tethered to an actual definition, you know, has a shot. I mean, I know California is still trying to require, well, Edge, Chrome and Safari to implement one. And by the way, I think the reasons that they're not is that some of the states have anti preferencing measures tied to the use of those universal opt out mechanisms.
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Yeah. Although at a certain level you could get protection from a government man, from even a state government mandate. And so I don't know enough about, I'm not as involved in this today as I used to be. If you have some thoughts for having me back in it, you just let me know. But I also think sometimes, you know, the resistance is sort of protectual. Well, I can't do that because we get an antitrust trouble or I can't do that for this reason or that reason when maybe you actually could if you wanted to.
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Yeah, oh no, for sure. I'm, I'm, I'm not saying it's pretextual at all. I'm saying that, that a lot of the browser makers now have very clearly defined. Oh yeah, business.
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Oh yeah, no, no, no, that's, that's certainly true. And with Apple they were actually doing some of this. So I have to say their ant they're antitrust issues around it. But so we've come to some extent, we have come part of the way to do not track option, just not when we wanted to do it quite in the universal way we wanted to do it.
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Well, what's interesting is that now that it does appear that the days of the cookie are certainly numbered, I would say that the ads industry may need to embrace a global privacy control or something similar to it because otherwise you're not even providing choice. And my understanding of how the FTC operates is that you guys don't like it when, when folks are not providing at least some.
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I think that's true. I actually think that's even true into the current commission which has done some good things on privacy, particularly privacy. Particularly privacy and kids.
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Oh, for sure. Well, let's, let's shift to kids because during your tenure there was a pretty significant shift to coppa. And look, I come at from the ad space, so there are probably other things added to there. But the thing that impacted my world was, okay, number one, all of the sudden pseudonymous data is personal data. That was new and a big shift. And then there's sort of the, well, how do you incorporate COPPA into this, you know, in this new world under the child directed website. And anyway, I would love, you know, the backstory of you, what you guys were thinking as you decided to revamp.
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Well, I think we had found that the coppa. Well, I think we had found that, you know, COPPA was a law that was passed in I think 1999 or 2000. And by 2012, smart companies had found ways to alight around Coppa's prohibitions of collecting data without parental consent. And we found that in a couple of our cases. And we just, you know, we used to talk to the industry and we used to talk to the public interest community and I used to have meetings the public interest community, I don't know, every couple months just to see what was on their mind. And it was clear to us that COPPA was not working as Congress intended. Right. And the FTC is a creature of Congress. And we all believed in the Children's Online Privacy Protection act as a way to protect children from who are a vulnerable population or teens who are tweens who are a vulnerable population, you know, from misuse of their data. And so we thought about it with staff and the commission agreed that we should move forward with strengthening COPPA and stopping those ways to allied around it. And it was not a unanimous vote. I think it was 4 to 1, 3 to 1. Maybe there was a, maybe there was an abstention. But it was something where I think looking back a few years later, every commissioner who was involved in the staff thought that we did something that was important. We protected children. Now I will say that a couple of weeks ago, the FTC issued what's known as 6B letters. Section 6B of the FTC. I should probably explain it to your listeners. You of course know, Alan, what it is Allows, and it goes back to 1914, when the commission was created. It allows the FTC to subpoena. They use something called civil investigative demands, but basically to subpoena an industry to bring to light what's going on in that industry. And the commission subpoenaed all of the AI, major AI companies because they wanted to learn more about how chatbots were interacting with teens. This is beyond. I mean, one of the problems with. One of the problems with COPPA was that it stops at. It's 12 and under. It should probably be to 16 and under. But here the commission can, can, can get more information about. And that was something we couldn't change by, by, by regulation or by rule. We could only, Only Congress can change it. And there's some bipartisan issues to do that. But here there have been some tragic instances of chatbots essentially advising kids to commit suicide or teens to commit suicide, who then did. And you may say, well, that's anecdotal, but I think there's a really important issue about whether, Whether the AI companies have appropriate guardrails in place to sort of prevent that kind of interaction that encourages, you know, that, that encourages sort of children, teens who are, you know, very emotionally complicated. All humans are emotionally complicated, but particularly teens, to take, you know, horror to take. To take these types of actions. So those 6Bs will probably take a year or so for them to come back with answers and about what's going on. But, you know, one thing we learned from our cases against then Facebook and Google, but particularly Facebook, was you have to. For privacy violations was you have to follow up with the executives. You can't just do document requests, which the staff sometimes wants to do, and they do a very good job of it. You have to talk to the people who run these companies, because sometimes they know what's going on, and they blithely ignored some warning signals. And then in the case of Facebook, now Meta, you know, we put them under order for violating privacy commitments to. We sued them, put them under order for violating privacy commitments to consumers. They had told consumers, we're not going to share your data. And they shared the data with advertisers, perhaps not you, Alan, but others. And they just weren't good at compliance. And the result of that was Cambridge Analytica. Right. So you want to. It's a really good idea for the commission to find out what's going on with these chatbots and teens and to make sure that these companies aren't just simply trying to grow their market as quickly as possible. But that with respect to young people, they're putting in some, they're putting in some guardrails so that, you know, the chat won't be entirely unadulterated. Right. And so that the bots won't give the kind of advice that apparently they're given in celebrity tragic situations under, you know, this recently.
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Oh, for sure. And I would say, in my view at least it's beyond anecdotal. I think there's real hard evidence that these chatbots are really, really screwing around with, with young minds. And so a couple of reactions. First, it's more of an observation, but I'm really intrigued by what New York State is doing with respect to social platforms. Because a lot of the social platforms are holding out certain provisions as being child protective. And upon investigation, that is not always the case. And those are the things that I think, those are the areas where I think it's just much easier to make claims and it's certainly easier to regulate if it's against, if it's somebody's doing something to kids. But overt acts where you're saying X and then the regulator can demonstrate that it's not X are much easier to bring than harm or deception.
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Yeah, well, I mean, that's exactly right. And I mean the core of the FTC statutory authority is to stop unfair methods of competition and unfair deceptive acts or practices. And so one of the things you can do with what are known as these 6B investigations, these industry wide investigations, is if you find information or data that suggests that a company is saying, we're doing this, we're protecting kids, but there's all sorts of data that shows they're doing the opposite or they're not doing that adequately. That's an unfair deceptive actor practice. And the, and the commission, I am sure, you know, I like bipartisan commissions better than, better than commissions that only have members from one party, but I'm sure this commission would go after it.
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So one area that I get a little bit concerned about is so completely on board with protecting kids. Very, very much on board with providing some way of weeding out kids from non kids. But I'd be curious of your take towards some of the age authentication type measures where that starts to make me a little bit nervous because that in my view is a recipe for potentially singling out protected clients.
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C
Yeah, it could be if it's misused. I agree with that. But this is a complicated and fraught area. So one thing we found, and in the privacy legislation of maybe three years ago, it was included. The legislation never passed the House. It, I think, came out of the. Did come out of this. The. I believe it came out of the House Energy and Commerce Committee. They found that, you know, under. Under the Children's Online Protection act, you have to sort of know that you are advertising to a kid or to someone 12 and under. If you don't, if you're not aware of that, you're not in violation. And so certain large tech companies, I won't name names, had different data sets on potential on kids or on people who were potentially 12 and under, but they refused to match those data sets with each other because that would give them pretty conclusive proof that they were advertising to people they weren't allowed to without parental consent, that is kids 12 and under. So, you know, this is an area where I would say, yes, there are certain uses of granular data that could result in bad practices to certain types of groups. And we want to, of course, avoid that maybe in violation of certain laws anyway. But at the same time, you know, if you can, if you can create incentives for these companies, even if they're regulatory or legislative, to actually, you know, make sure that they're not advertising to children in ways. Or collecting data from children in ways that they shouldn't. But for the fact that it probably, probably someone they're not allowed to. But maybe they could. But maybe they could because they don't know for sure. That's also a good thing. I believe that California sort of has its own equivalent of the Children's Online Privacy Protection act that goes to 16 now. I think they pass legislation like that. A couple states do, and there's bipartisan legislation. I want to say Ed Markey and maybe Josh Hawley to do this and someday that should get passed. That would just increase. That would just raise the age for coppa. But again, there are companies that resist it because they want to collect that data. But one thing we've also sort of learned is that if you create the prohibition across the board so that no company is disadvantaged, they're more willing to live with those types of restrictions. Right?
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B
Yeah. And I think we've reached the point where there's enough states that are even 16, 17, even under 18, might be Maryland, and Maryland might even have prohibited that collection of anybody who, you know, is a minor. Eventually, whether or not the federal government does something is going to be almost irrelevant because it's going to be, you know, you have enough states saying you have to do X. It's the de facto.
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C
Well, I would say two things about that. Right. I mean, one is, yes, that's what happens. And it's not surprising. I remember the then AG of Washington, I think, calling me up one day and telling me, you know, if you guys did your job in D.C. i don't think I was at the FTC, but I was involved in privacy legislation. You guys did your job in D.C. we wouldn't have to pass privacy legislation in our state. And, and I couldn't disagree with him. Right. Because, you know, in 2012, we wrote a major report on privacy where we called for do not track and we called for privacy legislation, legislation against data brokers. And yet 10 years later, 13 years later, we, you know, we still don't have privacy legislation, even though lawmakers on both sides of the aisle probably agree on about 85% of what should be in that legislation. We don't have legislation that circumscribes the kind of things that data brokers can do, even though there are lots of instances that data brokers have done some. I mean, they perform a role in society. And I don't, I don't want to say they don't, but, like, there's some things they shouldn't be doing. And so, you know, you're right. States, States will fill the void. Right. And act in a vacuum. And they should. And you understand why they would. And they waited for a while for, you know, Congress to act, and Congress has repeatedly been unable to do that. So I totally get that. I will say this. If you start to see conflicting state laws, and we've seen a little of this so far, but it hasn't been litigated, then you have a problem. And you have a problem because it's sort of a dormant state commerce clause problem. You have a constitutional problem. And keep in mind, and I will quit bloviating about this because I'm hardly a constitutional scholar, but sort of keep in mind, if you really had, if you really, I mean, data moves in interstate commerce. It moves internationally, of course, too, but it moves in interstate commerce. So there is a particularly important role for the federal government in setting a standard, maybe a floor, but in legislating here, and if the federal government could bring itself to pass a strong, and I really mean strong, privacy law that really protects American consumers, then there would be a role for some degree of preemption, I think. But, you know, they haven't passed anything weak or strong. And I, and I also worry about states passing. States will pass laws, but often, not always, but often they're the Weaker laws. Right. You know, they have this exception and that exception. And so they're sort of good, they make people feel good about legislating in the, you know, in the state. The governor feels good about signing that bill. But. But like take something like do not track, which is sort of obviously supported by 90% of Americans. You know, it hasn't quite happened yet. To the extent it, to the extent it's moving that direction, it's probably because Apple is sort of insisting on it. Right. So with its counterparties.
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B
Yeah, no, fair enough. So I want to transition to industry self reg. But before I do, this sort of is a nice transition because I'm going to start with the post COPPA world. One of the most impactful speeches ever that I've seen at an industry event. And it wasn't you, but it was somebody who I know that I'm pretty sure that you like is Jessica Rich. Jessica came in front of the NAI in like 2013 and said, hey, duh. IP address is always personal data. And it was as if she had thrown a grenade in the room. And there was a whole bunch of objections at the time, myself included, and questions. But you know what?
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C
Of course she was right. Of course she was right. And she was working off of our. And of course it's true. And she was. And I was at the ftc. I can't remember if I was. I was there till mid 2013. And Jessica was our deputy bureau director for a while and then under my successor, she became the bureau director. And she's very committed to privacy and she is a wonderful, brilliant lawyer. And if you can't sort of push the industry a little bit, particularly in ways that I think they came to agree is correct, then you know, you shouldn't be in that job. And she was very good at that job.
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B
That completely agree. But I want to transition now to a little, to maybe riff a little bit on industry self reg because I would from my side of the room. The emergence of the Digital Advertising alliance code, particularly the icons on ads concept, seemed like it was in direct response to a call from the commission to increase transparency around behavior. Behavioral ads, interest based ads, targeted ads, however you want to define it. Am I remembering that correctly from your side?
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C
That is entirely correct. We were pushing. I mean you can use your bully pulpit, you can threaten cases, you can bring a few cases and you can get the industry to move to some extent. My recollection of the DAA proposal and I remember it getting demoed in my office. So I maybe, Maybe that was 2011, 2012 was that it required a very sophisticated consumer to, to be able to sort of opt out of advertising. You had to go through multiple clicks. You had to really want to do it. You know, my own view, and you can disabuse me, disagree with me on this, but my own view is you have to make things fairly simple for consumers. If you want to, if you want to give the, if you want to ensure that, that, that you allow their preferences and, and also that you know, when it comes to the collection of data it's important to, to give consumers their, their preference. So let me go on a tangent for a little bit. So at one, at one point I'm driven by Apple. Meta agreed that if you were on Facebook you were given a prompt and that prompt said we would like to collect your data. Will you allow us to collect your data? And 80% of people who clicked said don't collect my data. Now I wonder, and maybe this is a place where my former agency might be interested in looking. I, I do wonder, you know, whether they've honored that commitment because if they haven't honored that commitment, that might be an unfair, deceptive act of practice. Actually might be very clearly deceptive. But maybe they have. We'll, you know, we'll see.
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B
Yeah, one of my biggest beefs with Apple and, and I don't know think, I don't know that this rises to the level of deception under Section 5, the FTC Act. That said they characterize their use of the intellectual property from the apps in their network as personalization and everybody else's as horrible tracking avoided all cost.
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C
You know, this is where it's an interesting question, right, because companies that were counterpart, if they wanted to be the App Store, right, they had to allow this clear opt out. This is not just, it's not just meta, it's others that it's a lot clearer. I don't know. I just know a little more about meta and it's also advantageous from a comp, from a competitive perspective to Apple, right? So they are in some ways, they are in some ways enhancing consumer privacy but also collecting a lot of that same data that they won't allow others to collect or that they allow consumers to opt out of having others collect. So you know, I, I, I, I, I. So the, the, the characterization of what they're doing as, as entirely pro consumer and what others are doing as entirely violative of the consumer, what should be the reasonable consumer experience and their, and their expectations of privacy might be a little Bit misleading if, if they characterize it that way. But I'd also say you do have pluses as well as minuses.
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B
Fair. Absolutely fair. Before we leave self reg, I just. So when you were in the commission, it felt like you used the bully pulpit pretty frequently. Maybe more so than I've seen since. And as we've looked at self reg over the last 15 years, look, I'm still on the board of the NAI, so like, I'm not here to beat anybody up, but it does strike me that the states have surpassed the self reg standards. And I just, you know, and so I think what ended up happening was that, that, you know, you eventually reached the Khan era and Ms. Khan and her colleagues sort of threw their hands up and was just like, all right, well we're just. The self reg isn't working and we need to find something else. I'm just curious as a, as an outside observer, in between your era and the con era, you know, was the commission pushing self reg? Was there? Like, and I'm not trying to lay the blame here on the commission, but like, because I think most of the blame is on the industry self reg groups. But I'm just curious, like, could the FTC have maybe pushed a little bit?
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C
Yeah. And I think you see from, from my era, and again from my era, we, we were more than light touches on industry. We actually wanted to go after industry when they were violating the law. But we also sort of believed that industry could get there with a push from us, in fact, in using the bully pulpit as a part of that. And we talked about an advertising initiative that came out of that went to some extent towards giving consumers more control over their data. I think by the time you got to Lena Khan, she was like, I'm done with this. Right. I mean, you sort of said that in between, you know, I think there was a, you know, there was a pull and tug between different commissions about how far they wanted to push. I think for the most part. Well, I think for the most part when you had Republican commissions, they were a little more prone towards self regulation. When you had my successor, Edith Ramirez, under Obama, she was a little more willing to push the industry on some antitrust cases in particular, actually more than maybe privacy issues. But you care about privacy issues and it's always a pull and tug. I would say that you are right. Some of the states went well beyond self regulation. And I think Lena comes from an approach where, I mean, I think she did use the bully pulpit, particularly if you include the bully pulpit as bringing certain cases that may or may not be successful but that others had not brought before and talking about that. But I think you'll see that pull and tug about how much we want to let industry, we want to allow industry to be super competitive and how much we want to make sure we regulate them under, for example, the FTC Act. You'll see that playing out over time with this commission as well.
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B
Yeah, I think that certainly makes sense. I want to turn to antitrust and specifically now to Google. And with your permission it would be, I'd love to know as the commission was sort of watching Google acquire DoubleClick AdmilD, invite AdMob, what was going on for policymakers in DC.
- [37:30]
C
So I would say, I would say there was sort of a growing awareness, but it took time to start to think about whether Google was acting anti competitively and making anti competitive acquisitions. So I, you know, if I had, I will just tell you this in retrospect, if I had one vote, I wasn't sure at the time, but if I had one vote to take back, it would have been voting in favor of allowing Google to acquire Double Slick. Now having said that, and you know, you work under the having said that staff, I would say staff fully believed that this was not an anti competitive merger. And our staff is actually, you know, pretty aggressive. And I called up publishers at the time and I asked them what they thought about this deal. So I talked to the publisher of the New York Times and the Washington Post where my wife worked and the owner of the Washington Post and publishers organizations because I was really concerned that this was a 3 to 2 or maybe even a 2 to 1 deal. And 2 to 1 is usually anti competitive. And what I heard from publishers at the time, and what I heard from publishers at the time was that no, no, no, this is going to be the greatest thing for newspapers, for other publishers. This is going to be really, really good. And I think they absolutely believed it. And I remember talking to of all people, Rupert Murdoch who just said, you know, and he came and he spoke at the FTC when we did a session, a couple of sessions on journalism and the Internet because we're trying to figure out what was going on in that world. And he was like, no, no, no, government should just stay away from here. We're going to be just fine. Now looking back, he would say, everybody else would say, you know, it turned out to be, it turned out to be, most other people would say an anti competitive deal. But, but at the time, you can't win. It's hard to win a case without customers saying oh yeah, this is going to hurt me when they're going to go out and say this is going to help me. And it's hard to, you know, you know. And they all believe it was a good thing. So the Clayton act is a predictive statute. You look to see whether something may substantially lessen competition. We probably got that wrong. Although I will say this, if you had head to head competition between, between Google and DoubleClick the network effects might have been such that one of them and probably DoubleClick might have gone out of business over a period of time or just hemorrhage business. So it's hard to say what the but for world was but in retrospect but that's the vote I wanted back now continuing sort of along those lines. We wanted my commission and again we were looking for practical solutions to real problems. We had a very aggressive, in a good way Republican, the late Tom Rush who really wanted to bring antitrust cases. We kept on looking for big anti competitive, anti competitive behavior, particularly by large companies, particularly by tech companies which were growing larger and more important by leaps and bounds. And that led us to start to look at Google and whether they were preferencing their own product, whether they were prohibiting multi helping ad campaigns which you know about and whether they were, which they were scraping other people's reviews and calling it their own. And, and we launched an investigation. We also brought a case against them for not honoring their commitments to license on fair and reasonable terms called FRAN terms with, with their competitors. Even though they made a commitment to do that. We put them under order for that which I thought was, which we thought was good. And that was, that was not unanimous, it was 4 to 1. But it was a good prohibition. It made them behave better with respect to their counterparties like Apple and Microsoft and just other companies. But on the big search case it was a close call. Remember their monopoly was not as durable at the time as it is now 12 years later. Just see how durable and how long lasting it is. And reasonable people could disagree and I always sort of believe that. So without a majority we just moved on.
- [42:23]
B
Yeah, fair enough. And for what it's worth, I would second your notion. I can't speak for the publishers of the world but the prevailing thought in the ad space up until really Fairly recently, maybe 2018 was that DoubleClick, I'm sorry that Google was sort of on their side that if anything they were the path. Become a founder, build something really cool, solve a problem in the ad space and sell to Google. Like that was the, you know, that was the. And if you can't get Google to buy you, maybe you can get, you know, Oracle to buy you. But, but that was the, that was the recipe. And so I can imagine during that time that, that there wasn't a lot of noise within the business community about some of the problems that we were going to see. That was a great discussion. You've been listening to part one of my interview with former FTC chair John Leibowitz, and while there is so much to cover here, I couldn't resist the temptation to begin by discussing the Do Not Track standard, as John was a key proponent of Do Not Track back in the day. Do Not Track is a deceptively simple proposition. An easy button for privacy, but it only works if you can get everyone in the room to agree with the definition of tracking. From my side of the room, nobody involved on the ground in terms of creating a Do Not Track standard wanted the standard to impact their business. And that includes browsers. Most of the browsers didn't want anything preventing them from sending their users to Google for monetization. It was just too lucrative. On a related note, John and I certainly disagree when it comes to using Do Not Track to create an opt in standard for the ad space. We'll get to consent standards in a bit more detail in part two of our discussion. It was interesting to hear John's perspective on the FTC's use of the bully pulpit to push the ad industry to do better. I think John and his colleagues did a good job putting pressure on the ad industry from the period of 2004 to 2013 overall. And I acknowledge that it is sometimes difficult to find the right balance. As a regulator, you not only want to push the right buttons, as it were, but you want to be careful about being either too gentle or too forceful as you push for change. And I'll say this, during the times when the FTC did not strike the right balance, the it made it slightly more difficult for those of us in the ad industry who were pushing to set a higher bar in terms of self regulation. John offered two fascinating revelations about Google's string of acquisitions, starting with DoubleClick in 2008. First, in hindsight I think he wishes he had pushed back harder on that acquisition overall and I think he mentioned that there is at least one vote that he wished he could have had back. And second, his recollection was that the market had viewed at least the DoubleClick merger rather favorably, which I think may have muted the FTC's willingness to challenge that acquisition. While I don't recall whether publishers were in favor of the DoubleClick acquisition at the time, I would agree that the ad tech community was generally in favor of Google as a possible vehicle for ad tech companies to exit it. Next week we'll continue with a brief discussion about what I refer to as the first party data exemption and how that can be a bit misguided. And then we'll go into a bit more detail on the FTC's, look into the development of journalism in the digital age, and talk about some of Google's more recent antitrust woes. So that'll be part two of the interview next week. Meanwhile, please leave us a comment or review or maybe even subscribe to the show@monopolyreportpod.com or on Spotify, Apple, YouTube, or wherever you listen to your podcasts. And thanks for listening.
- [46:12]
C
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