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Politics

The DOJ went narrow on Google. That may be good news for the rest of Big Tech.

The antitrust complaint focuses on facts specific to the search giant. But there are warning signs for Facebook, Amazon and Apple, too.

The DOJ went narrow on Google. That may be good news for the rest of Big Tech.

Despite all the bluster, the DOJ's legal argument is narrow and fact-based, focused not on Google's size but primarily on the contracts it has with other companies.

Photo: Alex Tai/SOPA Images/LightRocket via Getty Images

In the opening paragraphs of Tuesday's antitrust complaint, the Justice Department suggests that the problem with Google is … pretty much everything. The "scrappy startup" has become not just "a monopoly gatekeeper for the internet," but an "empire" that's too big, too rich and too much in control of everything related to search.

But that's not what the DOJ is suing over. Despite all the bluster — "Google is so dominant that 'Google' is not only a noun to identify the company and the Google search engine but also a verb that means to search the internet" — the DOJ's legal argument is narrow and fact-based, focused not on Google's size but primarily on the contracts it has with other companies.

That should be a relief to the other big tech companies. Instead of making legal arguments that could apply with equal force to any of them, the DOJ's case takes aim at a set of facts that are unique to Google.

"It's factual and narrow, and that may limit its scope," said Gary Reback, a veteran Silicon Valley lawyer who has been credited with getting the government to bring a case against Microsoft in the 1990s.

Before the Google case landed, industry watchers had speculated that the case would include some discussion of self-preferencing, or the allegation that Google prioritizes its own products in search results. But the DOJ didn't go there, instead homing in on Google's agreements that require mobile phone manufacturers like Apple to keep Google as their default search engine.

A discussion of "self-preferencing" might have left Amazon vulnerable, as critics have long accused Amazon of prioritizing its own private-label products. And a broader indictment of Google's practice of buying market dominance could also spell trouble for Facebook, which deals with its competitors in a similarly spendy way. Facebook could have come off even worse, given the email evidence that Mark Zuckerberg wanted to buy up competitors to kill competition.

And — big talk at the beginning notwithstanding — the complaint specifically avoids concluding that the sheer size and success of Google is a cause for legal concern. That might be too much for pro-business Republicans to swallow.

The big tech companies are certainly not out of the woods. One worry: the way the DOJ defines the relevant market.

Google has argued that it's got plenty of competition because Expedia offers search results in travel and Amazon offers search results in retail. Similarly, Amazon has argued that it's in competition with every brick-and-mortar store in the world, and Apple has resisted the argument that its App Store is a market unto itself.

With Google, the DOJ has taken a much narrower view of the relevant market, defining it as "general search"; think less Amazon and Expedia, more DuckDuckGo. Similarly narrow definitions could spell trouble for the other big tech firms.

"This confirms what [the tech companies] suspected, which is that government agencies are not going to accept their universe-and-all-it-contains market definitions," said former FTC Chairman William Kovacic.

There's one other big worry for Google's big tech brethren: the line where the DOJ says, "When a consumer uses Google, the consumer provides personal information and attention in exchange for search results. Google then monetizes the consumer's information and attention by selling ads."

For years, some experts have argued that digital platforms can't violate antitrust laws because they offer their services for free. The DOJ has now taken the view that companies like Google and Facebook don't really offer their services for free because they monetize users data with ads.

"This confirms that the government is looking at these issues not in the way the tech companies would like," Kovacic said.

Protocol | Workplace

The Activision Blizzard lawsuit has opened the floodgates

An employee walkout, a tumbling stock price and damning new reports of misconduct.

Activision Blizzard is being sued for widespread sexism, harassment and discrimination.

Photo: Bloomberg/Getty Images

Activision Blizzard is in crisis mode. The World of Warcraft publisher was the subject of a shocking lawsuit filed by California's Department of Fair Employment and Housing last week over claims of widespread sexism, harassment and discrimination against female employees. The resulting fallout has only intensified by the day, culminating in a 500-person walkout at the headquarters of Blizzard Entertainment in Irvine on Wednesday.

The company's stock price has tumbled nearly 10% this week, and CEO Bobby Kotick acknowledged in a message to employees Tuesday that Activision Blizzard's initial response was "tone deaf." Meanwhile, there has been a continuous stream of new reports unearthing horrendous misconduct as more and more former and current employees speak out about the working conditions and alleged rampant misogyny at one of the video game industry's largest and most powerful employers.

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Nick Statt
Nick Statt is Protocol's video game reporter. Prior to joining Protocol, he was news editor at The Verge covering the gaming industry, mobile apps and antitrust out of San Francisco, in addition to managing coverage of Silicon Valley tech giants and startups. He now resides in Rochester, New York, home of the garbage plate and, completely coincidentally, the World Video Game Hall of Fame. He can be reached at nstatt@protocol.com.

Over the last year, financial institutions have experienced unprecedented demand from their customers for exposure to cryptocurrency, and we've seen an inflow of institutional dollars driving bitcoin and other cryptocurrencies to record prices. Some banks have already launched cryptocurrency programs, but many more are evaluating the market.

That's why we've created the Crypto Maturity Model: an iterative roadmap for cryptocurrency product rollout, enabling financial institutions to evaluate market opportunities while addressing compliance requirements.

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Caitlin Barnett, Chainanalysis
Caitlin’s legal and compliance experience encompasses both cryptocurrency and traditional finance. As Director of Regulation and Compliance at Chainalysis, she helps leading financial institutions strategize and build compliance programs in order to adopt cryptocurrencies and offer new products to their customers. In addition, Caitlin helps facilitate dialogue with regulators and the industry on key policy issues within the cryptocurrency industry.
Protocol | Workplace

Founder sues the company that acquired her startup

Knoq founder Kendall Hope Tucker is suing the company that acquired her startup for discrimination, retaliation and fraud.

Kendall Hope Tucker, founder of Knoq, is suing Ad Practitioners, which acquired her company last year.

Photo: Kendall Hope Tucker

Kendall Hope Tucker felt excited when she sold her startup last December. Tucker, the founder of Knoq, was sad to "give up control of a company [she] had poured five years of [her] heart, soul and energy into building," she told Protocol, but ultimately felt hopeful that selling it to digital media company Ad Practitioners was the best financial outcome for her, her team and her investors. Now, seven months later, Tucker is suing Ad Practitioners alleging discrimination, retaliation and fraud.

Knoq found success selling its door-to-door sales and analytics services to companies such as Google Fiber, Inspire Energy, Fluent Home and others. Knoq representatives would walk around neighborhoods, knocking on doors to market its customers' products and services. The pandemic, however, threw a wrench in its business. Prior to the acquisition, Knoq says it raised $6.5 million from Initialized Capital, Haystack.vc, Techstars and others.

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Megan Rose Dickey
Megan Rose Dickey is a senior reporter at Protocol covering labor and diversity in tech. Prior to joining Protocol, she was a senior reporter at TechCrunch and a reporter at Business Insider.
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Protocol | Workplace

What’s the purpose of a chief purpose officer?

Cisco's EVP and chief people, policy & purpose officer shares how the company is creating a more conscious and hybrid work culture.

Like many large organizations, the leaders at Cisco spent much of the past year working to ensure their employees had an inclusive and flexible workplace while everyone worked from home during the pandemic. In doing so, they brought a new role into the mix. In March 2021 Francine Katsoudas transitioned from EVP and chief people officer to chief people, policy & purpose Officer.

For many, the role of a purpose officer is new. Purpose officers hold their companies accountable to their mission and the people who work for them. In a conversation with Protocol, Katsoudas shared how she is thinking about the expanded role and the future of hybrid work at Cisco.

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Amber Burton

Amber Burton (@amberbburton) is a reporter at Protocol. Previously, she covered personal finance and diversity in business at The Wall Street Journal. She earned an M.S. in Strategic Communications from Columbia University and B.A. in English and Journalism from Wake Forest University. She lives in North Carolina.

Protocol | Fintech

The digital dollar is coming. The payments industry is worried.

Jodie Kelley heads the Electronic Transactions Association. The trade group's members, who process $7 trillion a year in payments, want a say in the digital currency.

Jodie Kelley is CEO of the Electronic Transactions Association.

Photo: Electronic Transactions Association

The Electronic Transactions Association launched in 1990 just as new technologies, led by the World Wide Web, began upending the world of commerce and finance.

The disruption hasn't stopped.

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Benjamin Pimentel

Benjamin Pimentel ( @benpimentel) covers fintech from San Francisco. He has reported on many of the biggest tech stories over the past 20 years for the San Francisco Chronicle, Dow Jones MarketWatch and Business Insider, from the dot-com crash, the rise of cloud computing, social networking and AI to the impact of the Great Recession and the COVID crisis on Silicon Valley and beyond. He can be reached at bpimentel@protocol.com or via Signal at (510)731-8429.

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