Press Release

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

CONTACT: , 310-392-0522, x317; or 310-292-1902

Fri, May 21, 2010 at 12:10 pm

  • Share
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.

- 30 -

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

Share
, , , , , , , , , ,

This post was written by:

John M. Simpson

- who has written 361 posts on Inside Google.

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.

Contact the author

4 Responses to “Consumer Watchdog Says FTC’s Google-AdMob Decision Will Hurt Consumers”

  1. Tosh Says:

    Interesting that Apple is the one with dominance in on smartphone market (iPhone) that is trying to use that to tap into another market (iAds) by locking down developers, closing their platform (flash, etc…), yet you criticize Google for competing (?).

    This site provides no insight into Google or the market itself. This sounds more like an anti-Google religion that repeats the same mantra over and over.

    Either you’re paid by Google’s competitors, or you’ve been drinking anti-Google’s kool-aid and lost basic logic skills.

  2. vsp Says:

    Google’s wild wild West type of business will harm America’s competitiveness. American corporations are getting lazier and lazier. They tend to jump on the easiest bandwagon hoping to make a living. They stop innovating and contract out the design and production of their electronic boxes to Asian manufacturers. This benefits Asian competitors tremendously as they learn and move up the value chain. Look at what Microsoft has done to American corporations such as HP, Dell, Compaq and a host of other promising companies that have gone out of business that had jumped on the Window’s bandwagon. These corporations became mediocre and were reluctant to invest and take risks. On the other hand, Apple, which has to compete with all the PC giants, have no choice but to innovate. As a result Apple leads while others follow or become copy-cats.

    I am afraid that Google would be a catalyst for the dumbing down of America’s competitiveness as more and more American firms that jump on the Google’s bandwagon will compete themselves out of business against Asian firms. More and more American jobs will be lost and a time may come when Americans would only be good at burger flipping or loafing on the streets.

  3. Jonathan Says:

    Google only has 70% of the search engine market share because consumers continue to use them. The switching costs for someone to go to competitor search engine, such as Bing, are $0. Google is not doing anything underhanded in providing a search engine that people appreciate more than any other search engine. What do you want them to do? Make their search engine worse so people will not use it so much? This is utterly ridiculous. What about Microsoft’s monopoly on operating systems? You can’t even get to a search engine or even the internet without an operating system. Where is the website dedicated solely to that?

    The mobile search engine will be no different than regular search. If people don’t like the product, they will not be charged by Google or Microsoft to simply type http://www.bing.com into the address bar instead of http://www.google.com. It’s not like Google is a utility company that is the only source of energy to a town. This article is a complete waste of time, as is the author’s efforts.

Trackbacks/Pingbacks

  1. What Do You Really Know About Google? « Consumer Action - 21. May, 2010

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

Leave a Reply