Consumer Watchdog Says FTC’s Google-AdMob Decision Will Hurt Consumers

WASHINGTON, D.C. — The Federal Trade Commission’s decision allowing the $750 million deal for Google to buy mobile advertising company AdMob is anti-competitive and bad for consumers, Consumer Watchdog said today.

“The FTC is allowing the two dominant companies in mobile advertising to combine in a monopolistic juggernaut against the third-place company, owned by Apple,” said John M. Simpson. “How this possibly can be construed as promoting competition is incomprehensible. What it demonstrates is Google’s clout in Washington. This week CEO Eric Schmidt said he would vigorously fight any opposition to the $750 million deal and that obviously has translated into pulling his political strings in Washington.”

Last week Google’s former top global lobbyist, Andrew McLaughlin, now White House Deputy Chief Technology Officer, was reprimanded for inappropriate contact with Google executives. Google’s lobbyist tactics were clearly to leverage political input from the White House on issues of concern. In one email produced in response to a Freedom of Information Act request from Consumer Watchdog, a Google lobbyist calls on a member of the National Economic Council “for the FTC to have administration input,” although the issue related to privacy, not the AdMob merger.

“Clearly Google is willing to pull in political chits from the White House to influence FTC deliberations. Did the White House attempt to influence the AdMob decision? The public deserves to know,” Simpson said. “Hopefully the FTC will take a much more critical look at the WiSpy scandal.”

Consumer Watchdog said Google’s dominance of online search with 70 percent or more of the search market is a monopoly that must be probed.

Earlier this month Simpson met with a five-person Justice Department team headed by James Tierney, chief of the DOJ’s Networks and Technology Section in the Antitrust Division to voice Consumer Watchdog’s concern about Google’s monopolistic position in the search market. Tierney asked that the specifics of his team’s questions and their reactions not be characterized.  He agreed that it would appropriate to describe the Justice Department as being “in a listening mode” concerning Google and its activities.

“For most Americans – indeed, for most people in the world – Google is the gateway to the Internet,” said Simpson. “How it tweaks its search algorithms can ensure a business’s success or doom it to failure. Google determines what consumers see and where they go and there is increasing evidence that Google is making decisions that unfairly benefit its own business.”

Consumer Watchdog said that much of the problem is caused by Google’s secretiveness.  “While advocating openness and transparency for everyone else, Google itself is a closed black box to outsiders,” Simpson said.

In an effort to focus attention on Google’s activities and make the company more transparent, Consumer Watchdog has launched a a new Website, http://InsideGoogle.com as part of the organization’s Google Privacy and Accountability Project. “We want to open up the black box,” said Simpson.

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Consumer Watchdog, formerly the Foundation for Taxpayer and Consumer Rights is a nonprofit, nonpartisan consumer advocacy organization with offices in Washington, DC and Santa Monica, CA.  Consumer Watchdog’s website is www.consumerwatchdog.org. Visit our new Google Privacy and Accountability Project website: http://InsideGoogle.com

Published by John M. Simpson

John M. Simpson is a leading voice on technological privacy and stem cell research issues. His investigations this year of Google’s online privacy practices and book publishing agreements triggered intense media scrutiny and federal interest in the online giant’s business practices. His critique of patents on human embryonic stem cells has been key to expanding the ability of American scientists to conduct stem cell research. He has ensured that California’s taxpayer-funded stem cell research will lead to broadly accessible and affordable medicine and not just government-subsidized profiteering. Prior to joining Consumer Watchdog in 2005, he was executive editor of Tribune Media Services International, a syndication company. Before that, he was deputy editor of USA Today and editor of its international edition. Simpson taught journalism a Dublin City University in Ireland, and consulted for The Irish Times and The Gleaner in Jamaica. He served as president of the World Editors Forum. He holds a B.A. in philosophy from Harpur College of SUNY Binghamton and was a Gannett Fellow at the Center for Asian and Pacific Studies at the University of Hawaii. He has an M.A. in Communication Management from USC’s Annenberg School for Communication.

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