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The Monopoly Report
Episode 50: Part 2 - Jon Leibowitz on Antitrust and Privacy in today's digital media marketplace
00:36:52
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- [00:01]
A
Hey, this is Ari with Market, and unless you've been living under a rock, you've probably heard that Market Live is coming up October 27th in New York City. The last Marketecture Live was sold out, and this one will surely be as well, with speakers like Mark Grether of PayPal, Eric Seufert of Mobile Dev Memo, and Jenny Wall from Videoamp. Plus, I'll be recording my podcast live with the one and only Antonio Garcia Martinez, author of Chaos Monkeys and now part of the team building at Coinbase. It's a stacked agenda and we hope to see you there. Go to marketlive.com and grab your ticket.
- [00:34]
B
While they're still available.
- [00:35]
A
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- [01:24]
B
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. I'm Alan Chappelle. This week I'm continuing my discussion with former FTC Commissioner and Chairman John Leibowitz. Last week in Episode one, Jon and I talked about the do not Track standard, the evolution of industry self regulation, and some of the antitrust issues raised by the FTC during the period of 2004 to 2013, including those against Facebook and Google. We also talked about children's issues, including the FTC's revamp of the COPPA rules back in 2011 and 2012. This week I start the discussion with a bit of a rant about the limitations of First Party Data. I will be speaking in depth on First Party Data with my pal Rob Leathern at the Market Live event in New York on October 27th. And since I'm clearly in a self promotional mood, I'll note that we're looking for a new sponsor here at the Monopoly Report. If anyone interested, Please ping ari ariarchitecturemedia.com in this episode, John and I also talk about the FTC enforcement against Google involving Google's alleged circumvention of the cookie controls in the Safari browser.
- [02:38]
C
We'll also discuss the recent decisions in.
- [02:40]
B
Google search antitrust remedies, and in particular the amicus brief that John and a number of other former regulatory enforcers filed in that case. In addition, we will compare and contrast the search decision with the remedies being discussed in the Google AdTech case. So let's get to it.
- [02:59]
C
I felt like I was jumping up and down a little bit on the privacy front because I felt like the bigger companies were claiming this, you know, first party advantage, you know, with their buttons all over the Internet. And I thought that was a problem because first party is in our world at a complete exemption from almost anything. At least it was then, right?
- [03:21]
D
No, no, no. And the equities, when I was in priority practice, I represented Comcast and I came to believe that some of the equities are different with a first party where you have a relationship. But, and I don't think anyone would disagree with that. But also it's still the collection of data and you should still give consumers more control over their data. And just going back to antitrust, I will say one of the most successful antitrust cases we had, and we didn't know how successful it was going to be at the time, was against Intel. Intel was doing a variety of things to harm its competitors, including some things that violated the consumer, some things that we believe violated the antitrust laws. Like, you know, you had to buy 100% or 90% of your product from U.S. aRC ships, or you didn't get any discounts at all. And if you bought 90%, well then you get a, you get discounts from 90%. If you got 80%, forget it, we're not giving you anything. And that really harmed capacity constrained competitors who couldn't sell 50% of anyone's chips. And there was hard for them to do it. And also they were doing things to companies that were becoming their competitors. Like a very small company at the time named Nvidia, by giving them, we alleged the wrong APIs to write to. So their products didn't work quite as well. They were also competitors and we put them under order. And I remember sitting down with my bureau director like six months later saying, what do we think we do? We think this worked out. And my bureau director said to me, well, you know, Nvidia's market cap went from 3 billion to 6 billion. So that tells you that we gave them an even playing field and now what is it, 4 trillion or something? Yeah, so sometimes you accomplish something meaningful, but it turns out to be bigger. And sometimes you don't get to quite where you want to go. But I would say to their credit, the Justice Department under Trump won and Makin Delrahim and Bill Barr, and then under Jonathan Kantor and Merrick Garland, where they brought another case, they brought two very serious cases against Google, some of which look like ours, what we were thinking about, and some of which are different.
- [05:17]
C
So I want to return to journalism.
- [05:21]
D
Yes.
- [05:21]
C
You had mentioned a series of town halls that you did. I think it was in 2009. I would love to maybe unpack that because with everything going on right now with news businesses, what were the issues that you were trying to surface at the time?
- [05:34]
D
You know, one of the things that the FTC has been very good at over decades is trying to look around the corner at what's going to happen and what issues might be competitive issues or consumer protection issues and what ones might not, where we should leave the market alone. And I was, you know, like, if the market's working reasonably well, we should let it continue. We should always go after low hanging, bad behaving fruit when we can. And so that was our pharmaceutical issue. Right. We thought something was blatantly anti competitive, but we got it to even a conservative Supreme Court. They would rule on our side, and they did. But with respect to journalism, we just wanted to understand a little bit more how the Internet was going to empower journalism, particularly consumer driven journalism, which was a big talking point at the time and something that we know has happened to some extent in whether there would be a sort of competitive imbalance between the largest Internet providers of social media and search and the journalism that we've all come to regard as being essential to a functioning democracy. So it was at that level, I mean, really just sort of an inquiry that we started our series of sessions. 2009 sounds right? It might that sound. It wasn't 2009. It was maybe it went into 2010 and we issued, I think at the end we issued a report basically not calling for any legislation or any antitrust legislation, but saying, you know, from our snapshot, we need to look, we need to continue to sort of look in this area. And so one piece of legislation that I sort of come to support would be for, and I think they passed versions of it in other countries like Australia, would be to give a sort of a collective bargaining status to newspapers. Because for all the benefits of the Internet with respect to news, we've also seen a very dark side. And we've also recognized that even some of the best newspapers and journals in America are just, it's hard in the Internet era to compete with free. And they're just, you know, they are maybe not all of them, but some of them are not quite the journalistic ventures that they once were. And journalism is again critically important to democracy, but also not thriving maybe the way it had pre Internet. And then the other thing we see of course is that which we started to look at, but I don't think we have, you know, we didn't have any thoughts about it intervening was that you see a lot of, you know, it's great that people can say anything they want online, but sometimes that results in misinformation. You don't have a lot of editing on top of your blogger sometimes. Right.
- [08:11]
C
Trust within the ecosystem is just such a big challenge. And then on top of that, the sad reality is you can hold out maybe a half dozen, maybe a dozen examples to the contrary. But people don't want to pay for content. They don't want to pay dollars for content. And so, so you're left with, you're left with paying for, with you know, advertising. And then you and I are back to our, our debate over opt in consent standards. And that that's sort of the, that's sort of the rub.
- [08:41]
D
Right. It is there, there's no doubt that there is that all of these different tentacles interact with each other.
- [08:47]
B
Right.
- [08:48]
C
So I was curious. You said that there was a report issued. I saw as I was doing some research for this. I saw that a report was anticipated, but it didn't. I couldn't find a publication. But I'll double check if you're somewhat sure that something was, something was released. I'm just curious if that's your recollection.
- [09:05]
D
Maybe it wasn't a full report. Maybe it was a concluding statement.
- [09:09]
B
Yeah.
- [09:09]
D
That the staff wrote and that maybe Tom Rush and I, who are the two commissioners most involved in this, concurred on and the commission voted for it. I'll circle back with you because it's impossible, entirely possible that your recollection or your research is better than my recollection. As I get older I find that happening more and more often.
- [09:25]
C
But, oh, I can't, I can't remember what happened yesterday. So I mean we're now talking 20 years ago. So I've got one more signature issue from, from your, the ftc and then I've got some other follow up questions, but absolutely the safari issue with Google and I think it was 2012, so. Because that's really pivotal, pivotal to what's happened in the last 10 to 15 years. Because one of the net results of that was that the term fingerprinting was became very maligned. And that's not entirely Google's fault and certainly not the FTC's fault, but that was the output of that. Can you walk my audience through what happened in 2012 with respect to Google and the Safari browser?
- [10:08]
D
Remind me, would you just give me a little more of a reminder about what you are, what you were thinking about?
- [10:14]
C
And I can probably, yeah. There was a complaint that Google engineers had. I'm going to use the word hack. I'm not sure that's my word. That might have been the FTC's word had circumvented privacy controls within the Safari browser so as to enable cookies to be dropped. Double click cookies to be dropped. And this resulted in something like a $26 million fine from the commission.
- [10:40]
D
Oh no, no, I do remember this. This was, this was a $26 million fine which at that point seemed to be exceedingly, which was very high. And I remember the FCC finding Google for something similar, $25,000. And we were like, well, we're 1000% but you know, thousand times higher than that. Anyway, what they had done was essentially, remember we, Google had. Now I have to go back a few years before that, Google tried to start a social network that would compete with Facebook, right? And Buzz, Google Buzz. And in starting Google Buzz, they violated every single consumer protection law, you know, I think that they possibly could. Or they violated the FTC's, we believe, prohibition on inferior deceptive action prices. And we had them, you know, just sort of nailed because what they had done, they had made commitments, they wouldn't share consumer data with others. But to launch, I'm sure someone at Google will call me to say I'm not entirely accurate when they listen to your podcast, but basically what they had done was they had, I get lots.
- [11:45]
C
Of those, just so you know, it's fine.
- [11:48]
D
What they had done was they had given everyone access to friends and friends of friends and their Buzz network. So sometimes your friend was your psychiatrist or your friend was your cancer doctor, or your friend was someone you were having an illicit relationship with or a same sex relationship with, although you hadn't told people about this. So we had a number of complaints from consumers, often important that, you know, their information was shared in ways that they were not allowed, that was unfair or deceptive. And we put them under a broad order saying, you know, you can't engage in these types of practices with respect to consumer information. And then several years later they did exactly what you described which was using Safari to engineer cookies. Very important at that time. Still not insignificant though. I think agree you're right. They're more or less going away to put cookies on consumers computers and that was a violation and we find them that much. We had discussions about whether we could find them more like more by a multiple but in fact it turned out that they had only, I think they had only done this in beta. So they hadn't, you know, they hadn't, it had been a full on barrage and every consumer, they could lose us, it was a small number just to see if they could do it. We had put them under order. We found that they, I mean they, we found that they had violated the order and one thing they stopped. Right. So we had important specific deterrence and then I think a general deterrence. You can't do this kind of stuff going forward.
- [13:18]
C
What's interesting from my side of the room about that settlement was that from that point on Google was very, very careful to say look, we are not going to do anything that touches browser settings. We were not going to engage in probabilistic fingerprinting, whatever, whatever the term for it is. And really it was only what six months ago that they reversed their policy sort of where they're not prohibiting it entirely on their network. Some of that is CTV related. But I guess I'm sharing this with you because this had a huge impact on probabilistic advertising on the marketplace.
- [13:53]
D
I mean again as between the legitimate interests, and I would say they are legitimate interests of advertisers and the privacy rights of consumers. From the FTC perspective, you try to put consumers, I mean they're not always right, but you try to give important way to sort of consumers privacy interest and the right not to be collected. And of course when you have a company under order, you want to make sure that they don't violate that order. Right. It turned out at least for a period of time based on what I remember and what you're telling me that Google, once we settled with them for about an order violation, they turned off that tap which had been only, which had not been a spigot, it had only been a drip. And then if you look at Meta, one of the problems that the FTC had and has continued to allege actually even under the Khan Commission, carried forward by the Ferguson Commission, is that they have engaged in multiple violations of the order we put them under in 2011 or 12 for giving information to advertisers they promised they would not give. And Then the follow up order under Cambridge Analytica, which was alleged to be a violation of the previous order. So you want companies to really get compliance. Right. I think. Even if it means a little less advertising to them.
- [15:05]
C
Yeah, to consumers. The output though, of a lot of that, and whether this is a good thing or a bad thing, I think is debatable. But the output is that with Meta, they immediately, as a result of the Cambridge Analytica scandal, sort of jettisoned all their third party data partners and brought everything in house. I'm not sure over the long term if that's good for privacy, it certainly gets rid of these bad third parties. But if at the end of the day you've got six or seven companies who have all the data in the world, that's not necessarily a good thing either.
- [15:42]
D
That's certainly true. I can't disagree with you. I mean, what you really want is for consumers to be able to keep the data to themselves that they don't want to share. And actually maybe. And a few companies have tried doing this, not successfully. And if they want to monetize their own data, isn't that great? Because companies going back to cable companies, when a cable company was being bought by another cable company, they knew exactly how much a consumer was worth, and so did these big data companies. And so maybe there's a role for consumers to monetize their data if they want to. But right now we've never seen any of that. It would be great if someone came up with a way to effectuate that. And again, some consumers, I mean, look, some of these services, many of these services are free because they use advertising to subsidize it. Right. We want those free services. And most consumers want that too.
- [16:27]
B
We do.
- [16:27]
C
And there's, there's trade offs here. And that's always sort of the challenge is as you, as you get into the world of like, what is an acceptable trade off, particularly given that, you know, what might be an acceptable trade off for John Leibowitz may be very different than it is for Alan Chappelle. And, and that's okay.
- [16:42]
B
That's right.
- [16:43]
C
It's, it is hard to operationalize.
- [16:45]
D
That's right. And by the way, what may be an accessible trade off for both of us may be very different for someone who is of a different economic class. Right. And has different values. And those people may either be in some ways exploited to give away their data, or they may actually, I mean, I don't think we know. Or they may be willing to give away their data in exchange for, you know, a lower cost for their, of their Internet provider. It's interesting questions.
- [17:09]
B
Right.
- [17:09]
D
And a lot of questions are unanswered.
- [17:11]
C
Yeah. Some of these are almost best, best discussed over wine with close friends. But someday I want to turn to the Google search remedies case. Now, my audience is going to be very familiar with that because we've been looking at that very closely. But the first question I have is specifically tailored to an amicus brief that was written by a group of former enforcers, including you. And what struck me about that amicus brief is that it was very similar to how Judge Mehta had ultimately ruled. Not, not necessarily the data sharing part, but I, I was really struck that the logic behind the decision was in my view, pretty similar to the logic of the, of the case. And I'm just wondering. Well, firstly, just, you must feel good about that. I mean, you've, you know, it would seem like you had had an influence from the outside looking in.
- [18:10]
D
Interesting question. You never know. I was actually working on an amicus brief today in support of one of the fired FTC commissioners and Humphreys executor. And it's an uphill battle in that fight to have a successful amicus, but we certainly hope so. I would say this my view, and I actually listened to a little bit of a podcast you did a few weeks ago, something the American Economics Liberty, American Economic Liberties Institute, and I didn't think divestiture of Chrome was appropriate. I actually thought that Jonathan, I mean, you'd have to ask Jonathan, put it on the table, probably because he thought if I ask for all this, maybe I'll get this. When you develop your monopoly mostly by virtue of your product or other legitimate things, it's hard to ask for divestitures. So I thought Chrome, I thought divesting Chrome, although it was not foremost in that case, it was not the only thing that just weren't asked for. I thought that was going too far and that's part of the reason why I signed onto that brief. On the other hand, I actually thought that Judge Meadow's proposed remedies were, I don't want to say a little bit timid, but I would say surprised me in how much he was going to let the marketplace try to solve this problem. And we didn't opine on this, I don't think in any particular way in our, in our amicus. But one thing he did was he prohibited exclusivity, yet he allowed payments to companies which may become exactly the same thing. And so I respect Judge Mehta, he's a very serious judge, but I think he was a little cautious in those remedies. I think maybe he should have prohibited those payments. And if he did, you might force a company to come up with a competitive product, possibly Apple, which would have a lot of incentive to do so. But he's putting a big bet on using AI to create a competitive landscape. That may happen and I hope it does. But that's, that's a kind of a risk. And I, and I understand, you know, judges don't want to put a really heavy hand on remedies and on distorting the marketplace. But I was a little surprised at his remedy. I would say there's a better case for divestiture. Now we'll see what she does in the ad tech case because there's, although she didn't say that the acquisitions are illegal of double clicking AdMob and others, the effect of those acquisitions based on liability was that they effectuated an anti competitive outcome. So we'll see.
- [20:35]
C
Yeah. And to your point in the search case, I think one of the justifications was that Google and their proxies and some of their experts made the case that Chrome divestiture was very, very, very challenging. And as much as Alyssa Cooper and the Georgetown folks tried to demonstrate otherwise, it seemed like that was a challenge. And I'm comparing it to the ad tech case where what we learned yesterday is that Google had even contemplated spinning off Adex and potentially Dart for publishers. So it's a little difficult to make the argument that it's impossible when there's documentation saying that you, you know, seriously contemplated it.
- [21:16]
D
Yeah, that's exactly right. And you kind of wonder what the negotiations were, if any, between Google and in the previous commission over whether there was a remedy. But I think the Justice Department really wanted to litigate this case or whether there was a remedy like that. On the other hand, at least based on some of the press I've read, Judge Brinkama has questioned whether the most aggressive remedies are based on an anti Google bias by the Justice Department. And, you know, so it'll be interesting to see where this comes out. But I do think it's a stronger case in some ways for a clearer remedy. We did get criticized for that amicus brief, but I don't think we were saying it could not be done, although we might have suggested that. I think we were saying that antitrust remedies for divestiture are strongest when they come from an anti competitive acquisition. The case for doing that is less Strong when you build your monopoly legitimately, but you maintain it was an illegitimate things. And I was, you know, I mean, look, and I was very happy that the Justice Department, I thought it was very legitimate for the Justice Department. And again, it was under President Trump to follow up on our closed investigation, which was, you know, in 2013, which was a very close case. So, you know, good for them. That's the way the antitrust law should work.
- [22:29]
C
I remember that part of the amicus brief. I think that the part of it that I have a challenge with and look, I'm not an antitrust expert, but, but the idea that structural remedies that you need to have what is a significant causal connection between the illegal conduct and the defendant's market power, which I read as a. Well, if distribution is the way to perpetuate that power, because that's the whole reason you're going after the anti competitive agreements. The second leg on that stool is chrome. That's the mechanism by which they distribute their search.
- [23:07]
D
It's a fair point. And I would just say, and this goes to sort of kind of, you know, you, you asked in a different context, where were we as antitrust and consumer protection enforcers in 2009 through 2013 compared to, let's just say, the Biden antitrust enforcers. And you know, part of it was we wanted to push the envelope. I think of Bill Bear, who was my counterpart for a while at the Antitrust Division, very good, head of the Antitrust Division. We brought monopolization cases. We brought cases where we thought we could do the greatest good for the greatest number of people. But we also tried to use earlier precedent sometimes particularly for an expansive view of the FTC Section 5 authority. The FTC's authority was designed to be a penumbra around the antitrust law. It was much broader by Congress when we created the agency. But I don't think we lived in the world where we thought all of the law from the 1930s, 40s, 50s and 60s was still good law necessarily. So we were more about picking and choosing the cases we could win or we thought we could win, rather than seeing if we could use those cases to challenge where the courts have been, where the courts have sort of put us. And of course, you know, we didn't believe in the Chicago school. We certainly thought maybe it had a few good things, maybe it raised a few good points and could be incorporated in things like efficiencies, but also thought that it was way constraining and too much market oriented. I think that in the Jonathan and Lena school, they wanted to take on a lot of things and some they have been successful on, some they have not been successful on, and some they might be, you know, well, who knows?
- [24:49]
C
And you know, I always like to go back to it took the, the government, what, three tries to eventually get to the point where they were able to make meaningful change with Microsoft back, you know, 25 years ago, I mean, it's hard to get these things right. I mean, even in the ad tech case, you can make an argument that going after the buy side is not really the problem. It's because the buy side is so tied to Google demand that that's really where the market manipulation takes place. And I know Jonathan Cantor tried to get at that in some ways and we'll see if that's successful. But it's really hard to get this.
- [25:26]
D
Perfect is remedies are awfully hard. And you know, you can sit around with your own staff and your fellow commissioners and you can all agree and you can see this from judges.
- [25:37]
B
Right.
- [25:38]
D
Yeah, we should impose liability. But when you get to what is the remedy, it's just, you know, it's very difficult. There's not a lot of precedent out there. Microsoft is a big precedent in D.C. particularly because it was a D.C. circuit decision rejecting splitting Microsoft a.
- [25:54]
B
Of part.
- [25:55]
D
Part.
- [25:55]
B
Right.
- [25:56]
D
So they ended up with pretty good remedies, I think, in the end, and as did the eu but they did it with behavioral remedies. Right. And I don't believe that you should ever go. I mean, structural remedies are inherently better than behavioral remedies. But, but in, in monopolization cases, behavioral remedies can serve an important purpose, in fact, including I think in some of the Justice Department papers recently, that they can be a gap filler or a. With structural remedies. So I'll just come back to this. Remedies are hard. Reasonable people can disagree. And you know, in our, in our, in our Google investigation, reason people did disagree. And I have a lot of respect for the three commissioners who said we don't want to bring a big monopolization case.
- [26:30]
C
So one more set of questions I'd love to riff on with your permission. So when absolutely. Commission, you're going to be putting a.
- [26:37]
D
Lot of your, your podcast guy, your podcast listeners to sleep an hour or two. But, you know, I'm willing to go as far as you want. You might want to do a little cutting and pasting, but go ahead.
- [26:45]
C
I disagree. I think this has been a great discussion. Perhaps one of the Better ones on the report.
- [26:51]
D
Check is in the mail. Thank you.
- [26:54]
C
That was a joke. That's another thing. Just as a personal observation, one of the things that I remember you from at the commission is that you had a whole dad joke thing happening as you were doing press conferences with the advocates. And there was a little bit of a back and forth that I will say it was kind of entertaining. You're not getting that from Lena Khan.
- [27:15]
D
Lena has her funny side in private. She's much more serious in public. People say that about Hillary Clinton too, you know.
- [27:21]
B
But.
- [27:21]
C
But okay. In any event, you left the commission.
- [27:23]
B
Yes.
- [27:24]
C
You started an alliance that. The name is escaping me, but you was some work with Mary Bono, former congresswoman, focusing, I think on the telecommunications sector.
- [27:34]
D
Well, it was on privacy and it was on the need for privacy legislation. And it was a group of telecommunications and Internet provider companies.
- [27:41]
C
Yes, but wasn't the core issue back then was the telcos were looking at the world and saying, wait a minute, we're held to this very high standard under the fcc and the edge providers are being treated like a three person ad network. So there was a disparity that that world was trying to even out. Am I remembering this correctly?
- [28:04]
D
You were remembering it correctly. It was a privacy coalition of Internet providers that had been phoned and had been or were phone and cable providers. I will say this at a very high level. They were all for federal privacy legislation, which was part of the reason I think Mary and I started that coalition. But yes, I mean, I think they also made the point, and I testified.
- [28:27]
B
To this as well.
- [28:28]
D
Why are you state of Maine or why are you fcc? I think under Tom Wheeler, who I thought was a very good chair in many ways. Why are you trying to regulate the 0.05% of data we collect rather than having Congress? Because I think you are right, Chairman Wheeler, you probably can't regulate the entire Internet rather than having Congress regulate 100% of the data collection. So you could see why they were uncomfortable with being singled out. As you pointed out, while the larger tech economy, and particularly the large data collectors in the tech economy were getting a free pass in time, they no longer get a free pass. In fairness. Right. And Internet providers are no longer on the front lines anymore of regulation. But you know, sometimes it takes a while for the political class and the regulatory class to catch up with where the marketplace is going and where they should be spending their time. I'll just say one thing which is a little bit of a frolicking detour. When we started to write our privacy report. We had a real agenda and a secret agenda. And our real agenda, it wasn't so secret, but our real agenda was we want to talk about best practices by companies and we want them to agree to best practices. And at the same time, when we started in 2009, we had a proposal in Dodd Frank which was going to give us easier rulemaking authority. The FTC is under something called the Magnuson Moss Act. When it does rulemaking authority, that's like a medieval form of rulemaking and it's designed to make it really difficult to do rules. And we wanted to do certain types of rules, including privacy regulation, where we could use what's called notice and comment rulemaking. It's what most other agencies do, the fcc, the sec. And so we tried to get notice and comment rulemaking so that we could do a privacy rule. And then we were writing this report which was going to tell us how we should write that privacy rule. Unfortunately, Chris Dodd himself in the conference, because we had gotten this legislation through the House, killed our initial finding authority or aiding and abetting authority and our easier rulemaking authority. So had we gotten that authority, wouldn't try to apply privacy rule. Before I left and we probably, in retrospect, knowing how anemic Congress's response would be to legislating on privacy, we probably should have tried a longer, harder magma rule back in the day. If we knew then what we know now.
- [30:46]
C
Yeah, well, that's the, that I guess that's the age old challenge. And I had forgotten about, I'd forgotten about the attempt while you were there. I mean it seemed like the focus then was more pushing industry on self reg and pushing a bit for a federal privacy law. I didn't realize that you had a third leg to that stool, which is, which is your own rulemaking, which was contemplated so.
- [31:08]
D
And supported by, and can I just say this, supported by at least one Republican commissioner and rule and finding authority for first time violations, supported by all the commissioners. But I think the business community, I mean you were not a lobbyist in the ad world then, you're not now. But the business community was very worried we would regulate privacy in a bad way. I don't think we would have. I thought we would have done it in a good way and was very worried that we would use. The entire industry was very worried about we would use finding authority in a muscular way which they did not want to see. And there are arguments against it. I thought the arguments for it were better. But that is the nature of Legislation.
- [31:42]
C
I think in retrospect it probably would have been better off had there been more teeth. I'm not sure we would have agreed again on every single place that the rules should have been. But I do think that it's funny. It's very easy as a business community to say, oh no, we don't want any rules. The lack of rules has been to our disadvantage in the same way that the EU consent for everything style rules have also been to our disadvantage because both of those approaches favor big tech.
- [32:11]
D
Yeah, I think we would have been. I mean, I had a Republican commissioner who always said, you have to, when you rule, when you, when you do rules. And we had, we did some rules, rules. We sometimes the Congress would give us like in the can spam act notice and comment rulemaking because they wanted us to do rules to effectuate their law. But one of my commissioners always said I took this to heart and as I became a better antitrust lawyer.
- [32:33]
B
With.
- [32:33]
D
Business, for more knowledge about how businesses work, he always said, watch out that when you do a rule, when we do a rule, or when Congress legislates, that you don't protect the incumbents because the incumbents can only always or usually, particularly if they're successful and have a lot of money and have a lot of abilities and have a lot of technology, they can comply with those rules, but the startups can't always. And you've heard, Alan, you know this a lot of concern that in the EU that their laws on technology, while trying to accomplish something important, have really suppressed new startups because they don't have the wherewithal necessarily to comply or the.
- [33:15]
C
Resources I would like to see. If I ran the world, I'd happily jettison precise location and a lot of the health stuff going out there, but I would also jettison a consent requirement in favor of data minimization and retention limits. Because I do think that having a consent for anything incentivizes the marketplace to collect as much data as they can.
- [33:39]
D
Yeah, that's a really good point. So when you become master of the universe, let me know if you need a lieutenant to implement some privacy, consumer protection, antitrust rules or not, depending on how the marketplace functions. Well, because I'd love to help you out.
- [33:51]
C
If we do it, I can tell you that the, the home base is going to be somewhere in Montana.
- [33:55]
D
That sounds good. Montana, Wyoming. Those people have good values out here in many, many ways. And I hope for the day when that happens. And I thank you for, I thank you for this, for, for, for this interview. It was really interesting for me too.
- [34:07]
C
Thanks so much John. This was wonderful. I really appreciate your generous time.
- [34:13]
B
That was a great discussion. Like many of the discussions we have here on the Monopoly report, John and I do not always agree. I wasn't a fan of the do not track standard, and I'm much less optimistic about the value of requiring consent for data processing in the ad space. I would much rather rely on things like data minimization and shorter data retention periods. Nonetheless, it was fantastic to get John's perspective. It was particularly interesting to hear John's thinking on the FTC case involving the Safari browser, and to understand how that case had its roots in the Google Buzz case. And there's a lesson in there that regulatory settlements often impose long term restrictions on how the settling company operates their business. And even though the Safari settlement didn't directly restrict Google's ability to engage in probabilistic advertising, I can say for sure that the Safari settlement made Google extremely wary of of doing anything that could be viewed as circumventing browser controls. I was hoping to have a bit of a more robust debate regarding Judge Mehta's decision in the Google Search antitrust case, as there were lots of similarities between the amicus brief that John signed onto and Judge Mehta's decision. But I suspect that I'll need to save that discussion for the day when I have Judge Meta on the podcast. Finally, I want to end this episode on a bit of a historical note. Think about the ad supported Internet in terms of eras or chapters. The first chapter is from 1994 to 2003, and that's headlined in many respects by the Rise and Fall of DoubleClick. The second chapter covers the time between 2004 and 2013, and that's been the focus of this interview with John. And while the headline of Chapter two is the Emergence of Google, there were so many other subplots here, for example the expanding definition of personal data, the rise of self regulation, the battle between new media and the telecommunications carriers, the first big browser wars, and some of the missed opportunities to rein in big tech on antitrust grounds. And so surprisingly, we're now in Chapter three, and in this chapter Big Tech dominates.
- [36:22]
C
Anyway, I've spoken a bunch about how the market has evolved over the past.
- [36:25]
B
Decade, so it was really enjoyable to walk through the previous decade or so and rediscover the way that all that history impacts us in the ad space today. So that's it for now. Please leave us a comment or review and maybe even subscribe to the show@monopolyreportpod.com or on Spotify, Apple, YouTube, or wherever you listen to your podcasts. And thanks for listening.
- [36:52]
A
Thank you for listening to the marketecture podcast. New episodes come out every Friday and an insightful vendor interview is published each Monday. You can subscribe to our library of hundreds of executive interviews at marketecture tv. You can also sign up for free for our weekly newsletter with my original strategic insights on the week's news at News Marketing. And if you're feeling social, we operate a vibrant Slack community that you can apply to join at adtechgod.
- [37:19]
B
Com.