Cliff Owen/AP Photo
Matt Schruers of the Computer and Communications Industry Association testifies before the House Judiciary Antitrust Subcommittee, June 11, 2019, on Capitol Hill in Washington.
At the turn of the last century, the Computer and Communications Industry Association (CCIA) was locked in battle with Microsoft. The Washington-based trade group, which represented many industry players that struggled to survive amid Microsoft’s desktop and browser monopoly, called for the company’s breakup, and was a complainant in a major antitrust case before the European Union.
Then in November 2004, CCIA and Microsoft reached a settlement for $19.75 million. Confidential documents from the Financial Times revealed that $9.75 million of that, almost half the total, went directly as a “one-time bonus” to Ed Black, CCIA’s president and chief executive officer. The unusual deal frustrated CCIA members, leading phone manufacturer Nokia to resign from the group’s board.
Today, CCIA isn’t on the opposite side of Google, which was hit on Tuesday with the most consequential U.S. antitrust suit since the Microsoft case. That’s because, instead of being paid on the back end, CCIA has been taken care of up front. Google is actually a member of CCIA, and lists the organization among those that receive “the most substantial contributions” from the company. (The list is six pages long, incidentally.)
Though CCIA has been linked with tech antitrust issues since its founding in 1972, it offered a middling statement on the Google case, stressing the political nature of a Republican attorney general filing suit just before a national election. In fact, all of CCIA’s statements about Google in the past several years have reflexively defended the company. It hosts conferences downplaying the need for antitrust action in the tech space. And it funds research papers batting down claims about Google’s monopoly.
CCIA funds a separate organization called Springboard that appears to exist to defend large tech platforms. It warns darkly of harms to consumers and innovation from heavy-handed government scrutiny and has steadfastly opposed the Google case. Springboard may be “powered” by CCIA money, but it’s literally a PR outlet. A source sent the Prospect a screenshot of what happens if someone tries to log in to the Springboard Twitter account and says that they’ve forgotten the password. Twitter then calls up the email on file for the account, which is from Hamilton Place Strategies, a D.C. public-affairs firm that works for clients like the insurance industry and large exporters like Boeing.
By the way, Ed Black was still president and CEO of CCIA up until last year. He’s now the CEO emeritus and chairman of the board.
Corruption aside, the CCIA story demonstrates how Google will fight back against charges of monopolization in the court of public opinion. At times, this will take the form of a head-on attack, with Google calling the lawsuit “deeply flawed” and making some version of its long-standing argument that “competition is a click away.” But Google prefers its defenders not be seen as coming from or influenced by the company itself. To that end, it’s told its employees to keep a low profile and not discuss the case. More often than not, Google’s arguments will come concealed, from an ecosystem of think tanks, academics, and other groups that receive some remuneration from Google. Such support for Google’s positions may appear independent and neutral. In fact, it’s anything but.
The search engine giant has been building a network of defenders for years, through free spending in Washington and cultivating relationships in government. Google uses third-party validators as a form of shadow lobbying, and has already run this play to fend off attacks on its practices. White House visits and academic papers defending Google peaked between 2011 and 2013, when the Federal Trade Commission was considering filing an antitrust case against the company, and then decided not to, despite a recommendation in favor from lower-level staff. Google delivered $762,000 to George Mason University’s Law and Economics Center during this period, and more than doubled its lobbying expenses.
“Google has spent decades cultivating dependencies in think tanks and gratitude from academics, and it has made sure that its fingers are everywhere,” says Zephyr Teachout, prominent Big Tech critic and author of Break ’Em Up. “Of all the Big Tech giants, it has been the most sophisticated and persistent in burrowing into the elite institutions and the elite hive mind.”
Google’s defenders, often cited in news reporting, have formed a self-reinforcing community around their shared goal of protecting the company. “It has a similar topography of a social graph that you would see from a Russian troll farm,” says Luther Lowe, senior vice president for public policy at Yelp and a major Google critic. “Just an isolated sector of people all retweeting each other.”
Google’s defenders, often cited in news reporting, have formed a self-reinforcing community around their shared goal of protecting the company.
Let’s take a look at the major players, aside from CCIA, that will be sure to pop up as Google’s biggest cheerleaders:
Progressive Policy Institute: This think tank, founded by the Democratic Leadership Council in 1989, sits in the centrist space occupied by Third Way and other groups. It has recently become part of the tech platform defense brigade, and not coincidentally it has received funding from Facebook, Google, and Amazon.
Anchoring PPI’s Big Tech coverage is director of technology policy Alec Stapp, a curious hire for a center-left organization. Before joining PPI in January, he worked at the “liberaltarian” Niskanen Center (where he wrote for the conservative outlet National Review), the hardcore libertarian Mercatus Center at George Mason University, and the research-oriented International Center for Law and Economics, whose founder Geoffrey Manne is the son of the business conservative movement leader Henry Manne, godfather of the corporate-friendly law and economics discipline. (Back then, Manne ran seminars for judges funded in part by Big Tobacco.)
A common thread among these organizations is Big Tech funding. The ICLE has taken money from Google; the Mercatus Center also receives Google funds and was once a “Host Organization” for its policy fellowship program; the Niskanen Center got $750,000 in 2018 (the year Stapp worked there) from Facebook, Google, and the Silicon Valley Community Fund, seeded with cash from Facebook and Google executives. Stapp was even the chief operating officer at a tech startup called Notebowl, whose funding came in part from Jaime Casap, chief education evangelist at Google.
Stapp has spent years creating emoji-heavy snackable content in defense of Big Tech. The general tenor of its case is that people simply love tech platforms and reward superior products, and besides, there’s plenty of competition for their services. He also spends a lot of time on his active Twitter feed linking to others in the ecosystem and building the pro-tech echo chamber. “He’s retweeted a lot by people who work for and at the platforms,” said one source.
When objections to Big Tech regulation come from the usual spheres of libertarians, it barely raises an eyebrow. When the Progressive Policy Institute takes a hard pro-tech line, it creates the impression of bipartisan support, especially to those unaware of PPI and Third Way’s brand of corporate-loving politics. It looks reasonable if you don’t know anything about what functions as a pay-to-play scheme.
Other think tanks: One source referred me to a paper co-authored by former FCC chair Tom Wheeler and Gene Kimmelman, a former senior adviser in the Justice Department Antitrust Division under President Obama. The paper posits establishing a Digital Platform Agency that would be responsible for tech regulation, but it would cooperate with industry stakeholders to develop the rules. The Brookings Institution, a famously centrist think tank that plays host to a variety of viewpoints, held a recent event on the proposal.
Google gives money to the Brookings Institution. It also gives money to Public Knowledge, Kimmelman’s former employer. The R Street Institute, a libertarian outfit that has criticized the Google case as a threat to innovation, also receives Google funds. Ditto the American Action Forum, a right-wing group that recently questioned whether the market definition of internet search was proper in the Google case. It’s legitimately hard to find a think tank that’s vocal about tech-related issues that isn’t funded by Google at some level.
Those who don’t toe the line and support Google’s positions are likely to see trouble. A couple of years ago, Barry Lynn’s Open Markets Program was thrown out of the New America Foundation after it sent a press release lauding the European Union for going after Google. The company “has shown that it will be ruthless when attacked,” says Zephyr Teachout, who was a fellow in the Open Markets Program when Google forced it out of New America. “Now that it is threatened, they will be calling in their chits, and if people at these think tanks start speaking out for Google's breakup, they will get quietly removed.”
Indeed, Teachout says that she has heard from people who are reluctant to join her critiques of Google because of direct or indirect funding of their projects. “They understand how dependencies work,” she explains. “I bet there will be some pretty dramatic internal fights at some of these think tanks/groups about what to do.”
More often than not, Google’s arguments will come concealed, from an ecosystem of think tanks, academics, and other groups that receive some remuneration from Google.
The antitrust establishment: A successful case against Google for abusing its monopoly power would cast a cold light on the host of pro-monopoly antitrust scholars who raised no alarms while tech platforms grew to their impregnable state. Many of these scholars are now scoffing at the voluminous list of harms caused by Big Tech’s monopoly status; self-preservation demands that they ridicule the government’s Google case.
There’s also good money in it for the hired guns who protect monopolies from antitrust law. Google has a strategy of financing academic research, paying as much as $400,000 for studies. Google’s storehouse of data is valuable to researchers as well, and even when the company doesn’t directly fund academic work, allowing these scholars to use the data is often enough to elicit a favorable response. Academics are also involved with antitrust consulting firms, the top two of which (Compass Lexecon and Charles River Associates) rake in millions to defend companies in antitrust cases.
Geoffrey Manne of the International Center for Law and Economics, to cite one prominent example, has long defended Big Tech, and cashed in on his stance. Manne has authored at least ten studies supporting Google’s positions, often in conjunction with George Mason University’s Joshua Wright, a former commissioner of the Federal Trade Commission who has moved from Google-supported academic work to government and then back to the Google gravy train, as an attorney at Google’s lead law firm.
Other law professors like Daniel Sokol of the University of Florida, Catherine Tucker of MIT, and Einer Elhauge of Harvard have benefited from Google funding for their work. But some of these folks don’t need money when their reputations are on the line. For instance, this New York Times article cites Stanford’s Doug Melamed (once general counsel at Intel) and Yale’s Fiona Scott Morton (a recipient of Amazon and Apple funding) as supporting a new tech-focused regulator. They themselves were both regulators, and you can view their belief that current tools are inadequate as covering their tracks for having failed to employ those tools when they had the chance. That combination of reluctance to regulate when they had the authority and the lure of tech money accounts for a bias that plays into Google’s hands. (Google would rather be regulated, surely, than broken up.)
The Koch network: The financial ties are somewhat indirect here, although we do know that Google contributes to the Mercatus Center, which is notoriously Koch-funded. But it’s notable that the Charles Koch Institute has ended up on Big Tech’s side, even as some on the right have taken on Silicon Valley. The Koch Institute hired former FTC acting chief technologist Neil Chilson, and Jesse Blumenthal runs their Technology and Innovation shop. Both Chilson and Blumenthal are staunchly opposed to antitrust scrutiny of Big Tech, and actively cross-link to the critiques of others in the ecosystem. Koch’s Institute has also given over half a million dollars to organizations like TechFreedom, which argue against Big Tech regulation. (Google is also a contributor to TechFreedom.)
Arguing against regulation for the tech industry is consistent with the Koch network worldview of seeking no regulations on business whatsoever. As I’ve written, the debate over Big Tech is more of a case study of concentration throughout the economy more generally, and if it leads to stiffer antitrust enforcement, some Koch corporations could be affected, and its owners ideologically offended by government intervening in markets at any level.
A successful case against Google for abusing its monopoly power would cast a cold light on the host of pro-monopoly antitrust scholars who raised no alarms.
THERE ARE OTHER PARTS of this ecosystem. Google funded an entire advocacy organization for startup tech companies called Engine, which was founded by people with ties to Google. A website called Truth on the Market featuring several writers mentioned here (including Alec Stapp and Geoffrey Manne) brings together think tankers and academics to guard big business from harm. And there are unbiased experts like … Google’s former CEO Eric Schmidt.
A Harvard conference held annually featured Google chief economist Hal Varian last year; Tucker, Sokol, Melamed, and Manne appeared at it, along with Howard Shelanski, a former Obama official now representing Facebook as a corporate lawyer. David Evans, chairman of the Global Economics Group and a founding editor of Competition Policy International, an aggregator of purportedly neutral antitrust thought, once ran a PR firm with the mission of using academics to shape public opinion. It was an influence-peddling shop that in many ways prefigures what Google is doing now.
You can make a couple of legitimate critiques about the Justice Department’s Google case. That Bill Barr could only recruit 11 state attorneys general, all Republicans, to join might give the impression of a partisan political maneuver. Of course, Democratic AGs are likely to file their own, more wide-reaching suit, and could certainly consolidate that with the Justice Department action later. You could quibble with the narrowness of the case, which comes down to Google paying billions of dollars to phone manufacturers (including $11 billion to Apple), browser companies, and others to preset their search engine on desktops and mobile devices. But there are hints of wider action in the complaint, like Google listing ads higher in search, forcing companies that want to be seen to pay a tribute. (You’ll probably see that be one focus of the Democratic AG case.) Plus, the case presents a simple story of Google paying off partners to muscle out rivals, something the public could easily understand.
But none of the pronouncements from the Google guardian ecosystem will make such claims. The guardians will use any tactic available to defend the company that happens to double as their meal ticket. The idea put forth in The New York Times that there’s a “professional opposition” to Big Tech is somewhat laughable, given the mounds of money the company has shoveled at its defenders.
