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The Evidence Google's Systematic Theft is Anti-Competitive

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Systematic theft may be the most anti-competitive and monopolistic practice in which a company can engage. Systematic theft generates an unbeatable cost advantage by avoiding the standard cost of propertied goods for which law-abiding competitors must pay. It creates an unfair, jump-the-gun, time-to-market advantage, by ignoring the rule of law standard of securing permission from property owners before use in the marketplace, a business practice that law-abiding competitors must respect. It spawns and maintains a matchless online index/inventory advantage that no honest competitor could hope to assemble. It anti-competitively undermines property-based business models which compete with Google's free content model. Lastly, systematic theft is the ultimate predatory practice in that it unlawfully destroys the value of any innovation or creative advantage a competitor may have.

Almost by definition, theft is a quintessential deceptive and unfair business practice under the FTC’s Section 5 antitrust authority. The open question is whether or not the FTC first can recognize, and second prosecute a heretofore unprecedented pattern of predatory behavior – systematic theft for anti-competitive gain.

Last month, Google Chairman Eric Schmidt told the French Newspaper Liberation, “We do not steal,” a reprise of his June claim to the British Daily Mail that “We are a law-abiding company.” It is telling that Google feels compelled to assert what should be a given and never questioned about a major corporation. The reason is that scores of competitors consistently over several years have charged Google with the same illegal practice: theft for anti-competitive advantage. More specifically, Google has repeatedly been sued for repeatedly stealing most every form of property: trademarks, copyrights, patents, trade secrets, contact lists, and private information.

Top Patterns of Google Theft

1. Admitted Pattern of Promoting Online Piracy: A) Last August, the DOJ assessed a near-record $500m criminal penalty on Google for systematic and willful aiding and abetting of piracy of non-prescription drugs over a period of several years. The U.S. Attorney prosecuting the case said Google CEO “Larry Page knew what was going on.” B) SIGTARP, the U.S Treasury Department entity responsible for policing TARP fraud continues to investigate Google after Google “suspended advertising relationships with more than 500 Internet advertisers and agents associated with 85 alleged online mortgage fraud schemes and related deceptive advertising.” C) A BBC investigation recently exposed that Google was advertising illegal Olympic Ticket ads for the 2012 London Summer Olympics.

2. Anti-Competitive Pattern of Book Theft: In rejecting Google’s proposed book settlement as a violation of copyright, antitrust and class action law, Federal Judge Chin said Google’s proposed settlement “would give Google a significant advantage over competitors, rewarding it for wholesale copying of copyrighted works without permission.” Google continues to systematically copy books without permission from the copyright owner – over fifteen million to date -- which fosters an anti-competitively comprehensive search index that no property-respecting search competitor can match.

3. Willful Pattern of Promoting YouTube Video Theft: In the Viacom vs. Google-YouTube $1b copyright infringement case pending appeal, involving the alleged willful facilitation of hundreds of thousands illegally downloaded videos, Federal Judge Stanton said: “…a jury could find that the defendants [Google-YouTube] not only were generally aware of, but welcomed copyright-infringing material being placed on their website.” The appeal will likely hinge on whether the Appeals Court rules that Google engaged in willful blindness, which would abrogate its DMCA safe harbor claim under the Supreme Court MGM vs. Grokster precedent.

4. Willful Pattern of Android Property Infringement: In the Steve Jobs biography, the late Steve Jobs called Android “a stolen product” for stealing the signature pinch and swipe innovations of the iPhone. Oracle sued sued Google for billions of dollars for “knowingly, directly and repeatedly infringed Oracle’s Java-related property;” an incriminating Google email shows Google’s leadership knew they needed to license JAVA but implicitly decided to steal it.

5. Anti-Competitive Pattern of Stealing Competitors’ Signature Patented-Innovations: A) Google stole the idea and auction method for keyword advertising, the wellspring of its search advertising monopoly, from the keyword advertising inventor and patent holder, Overture, given that Google settled a patent lawsuit with Overture-Yahoo for ~$250 million in order to clear the way for Google’s 2004 IPO.  B) Skyhook Wireless sued Google for infringing several WiFi location patents that collectively enable most location-driven mobile applications. Incriminating emails indicate willful infringement by Google’s leadership. C) Last fall, Yelp complained that Google stole Yelp’s restaurant reviews without compensation in order to leapfrog Yelp with Google Places. D) PayPal recently sued Google for theft of their mobile payment trade secrets in a lawsuit against Google Wallet. E) The most recent example of this Google pattern of stealing competitors’ most valuable property is BuySafe’s patent lawsuit against Google’s Trusted Stores program.

6. Extensive Pattern of Content Theft: It is no coincidence that Google has been sued for copyright infringement by most all types of content: wire servicesnewspapersbroadcastersmovie studiosauthors, publishersvisual artistssoftware providersphotographersartistsgraphic designersillustrators, and filmmakers.

7. Extensive Pattern of Trademark Theft: Many brands have sued Google for infringing on their trademarks by selling their trademarked brands to competitors as search keyword advertising, i.e. adwords: Rosetta Stone (whose appeal is supported by friend-of-the-court briefs by: Viacom, Ford Motor Company, Carfax, Blue Destiny Records, The Media Institute, ConvaTec, Guru Denim, Monster Cable, PetMed Express and 1-800 Contacts), American Airlines, and Geico. The theft is Google effectively extorts a brand owner to buy their trademarked key word at top price in order to keep it from being used by competitors to steal business leads from trademarked brand names that consumers trust.

8. Pattern of Stealing Contact Lists: A) This week, Google admitted to being caught systematically stealing business contacts from a Kenyan business directory. B) Last year, Google admitted to stealing people’s private email lists in the FTC Google-Buzz privacy settlement where Google admitted that taking people's private gMail contact list and incorporating them into Google Buzz without their permission was a deceptive and unfair business practice.  C) Google StreetView admitted it systematically took WiFi signals of tens of millions of household’s emails and passwords around the world, without their permission, over a period of three years, prompting investigations in 13 countries: U.S.Canada,  Germany,   France,   Switzerland,  Netherlands,  Spain,  Belgium, Czech Republic,  South KoreaJapan,  Australia,  and  Hong Kong.

In sum, it is sad that the evidence indicates systematic theft is an integral element of Google’s competitive business strategy. The evidence also indicates Google owes much of its success and rapidly spreading market dominance to the ill-gotten unbeatable competitive advantage of systematic theft of others property (trademarks, copyrights, patents, trade secrets, contact lists, private information) via at least eight distinct patterns of theft perpetrated over several years time -- that collectively indicate that Google’s anti-competitive behavior is systematic, willful and strategic.

The much underappreciated key to Google’s strategy here is to deny legal discovery of incriminating information on awareness and intent behind Google’s theft, and when such information is discovered, to cover it up publicly via an aggressive pattern of urging courts to seal incriminating documents from public view. The cover-up prevents complainants and law enforcement the ability to connect-the-dots of evidence necessary to prove in court that Google’s systematic theft has been, and remains willful and strategic. The non-profit Reporters Committee for Freedom of the Press has documented Google’s cover-up pattern in a report called “Uncivil Secrecy.”

The sad irony here is that the company in the world which advocates most loudly for Internet openness and whose mission is to make the world’s information universally accessible, systematically seeks to deny public access to vast amounts of court documents that normally would be in the public domain, but for Google’s “closedness” efforts. The exceptional public hypocrisy here strongly suggests Google has much to hide.

At bottom, no law-abiding competitor can compete with a company which serially flouts property law and systematically engages in deceptive and unfair business practices. Google’s systematic theft provides Google with an unbeatable, ill-gotten, and anti-competitive cost, time-to-market, inventory, and innovation advantage.

Experience to date has taught Google that crime does pay. The overwhelming evidence above of Google’s systematic theft strongly indicates Google is the 21st Century’s Robber Baron.

Scott Cleland is President of Precursor LLC, a consultancy serving Fortune 500 clients, some of which are Google competitors; he is also author ofSearch & Destroy: Why You Can’t Trust Google Inc.