Big Tech Lawyer earns salary, arguing Google does not dominate search

Today 's day is a big day in Silicon Valley because of an audience in Washington, D.C.

Congress on Tuesday opened its long-awaited antitrust investigation on the US tech giants with the first of several hearings. This one focused on the impact of companies like Google and Facebook on the American press.

How was it? Most of the time, it was media reporters who described the degradation of the industry, especially the damage done to local media. There was only one technology representative out there and, at the risk of underestimating the century, he was determined to play hardcore defense.

Democrat MP David Cicilline of Rhode Island, in turn, asked Matthew Schruers, vice president of the Computer Group Communications Association and the technology man of the industry, to agree on certain facts. basic.

No, they could not.

Cicilline confronted Schruers with the numbers that told the story of Google's dominance in research. Schruers, eager to earn his salary, insisted that the research market be competitive.

As the first example of a competitor, Schruers has proposed Apple's Siri. The fact is that Siri searches the web with Google by default.

Here is the strange exchange in its entirety:

Cicillin: "Mr. Schruers, I want to start with you. Google accounts for 88% of the online search market in the United States, 94% of all smartphone searches, 78% of the ad technology market and 59% of the ad display advertising market. third. I suppose you agree that these markets do not seem at least to be competitive markets? "

Schruers: "What specific market are we talking about?"

Cicillin: "Let's start with smart phone research. Ninety-four percent of the market is controlled by a platform. Would you agree with me that this definition is not competitive? "

Schruers: "Well, I think I would say that 94% of a relevant market would be worthy of interest, but …"

Cicilline: "You think the mobile search ads market is not a relevant market?"

Schruers: "I think the relevant market in this case would be what economists tell us in competition with that. I know that by searching on the phone in the browser, I can also search my phone by asking Siri or doing a search with a digital assistant, a smart speaker in my room. There are many places where a user can go for answers that go beyond simple browser search. These are more and more page-less tools that do not require a search engine. So I think economists might not agree that computer research is a separate market … "

Cicillin: "In fact, I do not know any economist who does not think it's not a competitive market. I guess I'm asking you if you agree that it's not a competitive market when it has 94% of the market. "

Schruers: "I think that 94% of a relevant market deserves to be taken into account. The question is whether it is a market. "

Is mobile, the most popular computer platform in the world, by far a relevant market?

"Relevant market" is a loaded legal term. In short, it is the market in question, as defined for antitrust purposes. For example, is social media largely the market in question, or is social video the market? The answer could mean a lot to YouTube in the upcoming antitrust battles.

Mobile search, however, is a completely different animal: it accounts for nearly three-quarters of all research revenue and, as Cicillin illustrates above, Google is singularly dominant. Siri is not a competitor because he uses Google by default. Echo is hardly competitive because it uses Microsoft's Bing search engine. Bing has a market share between 2 and over 30%, depending on the number of people you choose. Whatever it is, Bing is not Google.

And then there was the press.

David Chavern, president of the News Media Alliance, a group representing more than 2,000 media organizations, was the first speaker to speak. The NMA released this week an attractive study claiming that Google had generated $ 4.7 billion from the information industry in 2018.

This type of figure makes headlines, especially in a newspaper like the New York Times (a member of the NMA), but the methodology used is debatable. The large number seems to be based on a spontaneous comment from Marissa Mayer, then vice president of Google, in 2008, saying that Google News was worth $ 100 million to Google. The figure of $ 4.7 billion is calculated almost entirely, because Google is worth more now and you can accurately calculate how much it earns with the information industry … Huh?

Here is the report to read for yourself.

Whatever the case may be, having already won a headline in The New York Times, Chavern has opened the audience with this issue that simply raises more questions than answers. The actual figure may be higher, perhaps lower, but the $ 4.7 billion is ultimately a big guess disguised as a factual grievance. It was a bad way to start.

Even further away from Silicon Valley, US Deputy Attorney General Makan Delrahim was in Tel Aviv on Tuesday, where he delivered a speech in which he clearly exposed the antitrust to the American tech giants by evoking the long history of ruptures in the world. Gargantuan industry in the country. arguments that the Department of Justice could use against the major technologies.

"The current landscape suggests that there are only one or two important players in important digital spaces, including Internet search, social networks, operating systems for desktop and mobile computers and the sale of ebooks, "said Delrahim.

Delrahim's energetic speech, which you can read here, comes just a day after Senator Elizabeth Warren called him to resign from his position as head of antitrust law because of what she sees as a conflict. interests. A little more than ten years ago, Delrahim was first a paid lobbyist for Apple, then Google in Washington, D.C.

"Your work as a lobbyist for two of the world's largest and most investigated technology companies creates the appearance of a conflict of interest," Warren wrote in a letter to Delrahim. "As the head of the Antitrust Division of the Department of Justice, you should not oversee investigations of past clients who have paid you tens of thousands of dollars to pressure the federal government."

You can read Warren's letter here and watch the full congressional hearing here: