Told You Those Lobbyists Would Come in Handy, Sergey …
“I’ve never seen a tech company ramp up faster than they have in the last year or two,” tech lobbyist Ralph Hellmann said of Google last year. “They’re using all the tools in the lobbying tool kit.” And with some success, it would seem. With the Department of Justice reviewing the company’s proposed online advertising partnership with Yahoo and critics growing increasingly vocal, Google has managed to win the support of some California lawmakers. In a letter to the DOJ, a group of 11 members of the U.S. House of Representatives, all Democrats, urged the Department to approve the Google-Yahoo deal. Dated Sept. 26, the letter was signed by Anna Eshoo, Zoe Lofgren, Ellen Tauscher, Sam Farr, Mike Thompson, Mike Honda, Doris Matsui, Jackie Speier, George Miller, Lynn Woolsey, and Barbara Lee.
“We are deeply concerned that the Department of Justice may be considering a preemptive lawsuit to block Yahoo’s nonexclusive online advertising agreement with Google,” the letter says. “If such action were taken, we believe such an unprecedented [lawsuit] would detrimentally affect the online advertising market and electronic commerce. … We believe that robust competition serves the public interest but if the DOJ blocks this agreement we fear that the threat of additional scrutiny may chill future agreements. Similar agreements are commonplace in many industries and standard among Internet companies.”
Well, not exactly, as Norman Hawker of the American Antitrust Institute points out. “Contrary to the letter, similar agreements are not commonplace because industries with this level of concentration are not commonplace,” Hawker said. “If you ignore the economic text when you read the words, you can easily be misled into thinking the agreement is harmless. Read in context, however, the words of the agreement explain how Google could easily acquire Yahoo’s paid-search business.”