Betrayal Makes Strange Bedfellows

As the fallout over Google’s net neutrality u-turn continues, more GBS watchers are finding common threads between how the online advertising giant approached its business strategy around books and its decision to cut a deal with Verizon, aka Verooglenet.

Earlier this week, we highlighted Prof. James Grimmelman’s brief but pointed “open letter” to Google.  Today, we are reading with interest Andrew Albanese’s aptly titled article This is Why It’s Hard to Trust Google at Publishers Weekly, who’s been covering the ups and downs of the GBS for quite a while now.  His view is summed up as follows:

“In covering the Google Books settlement I’ve always been struck by how many people seem to deeply distrust Google.  This week, the company gave those critics new ammunition.”

As a Google Book settlement “dis-truster,” we see his point and agree that a community of opposition beyond authors, the Department of Justice and the OBA are beginning to take notice.  Albanese closes the piece this way:

“It’s hard to be upset at corporations for acting like corporations, and what ultimately happens with net neutrality is still in the hands of government. But at the same time, wasn’t Google supposed to be different? Hasn’t Google has pretty much traded on the public’s faith? The Google Book Settlement, for example, was sold almost like a public works project. Yet throughout the settlement debate, critics and opponents of the deal have questioned just how deep Google’s commitment to the public runs. This kind of about-face from Google on net neutrality, and make no mistake, despite Schmidt’s support for what he calls a “public” Internet, this is a major shift, will only add fuel to the fire.

I can already hear the questions: Will the Google books database always be carried on the “public Internet?” Will an upgraded version of the GBS database be offered to premium customers, giving libraries in the well-funded suburbs yet another advantage over libraries in inner cities? If you thought the questions were complex enough for one Internet, Google is now talking about creating another.”

These are serious and even new issues to explore.  While looking at the Verooglenet u-turn’s implications on the GBS debate, a recent press release on the subject caught our eye.  The folks over at the New America Foundation – who have steadfastly promoted the proposed book settlement – had this to say about the Google-Verizon deal soon after media reports began leaking out last week:

During the 19th century a handful of wealthy industrialists dominated steel, oil refining and railroads; striking agreements to receive favorable terms for the carriage of their goods, while subjecting farmers and competitors to unreasonable and excessive charges.

Now, over a century later, history is in danger of repeating itself. After weeks of closed-door meetings sanctioned by the Federal Communication Commission, two of the largest corporations in the communications industry have reportedly negotiated an agreement on network neutrality. Though details of the agreement are not available, its terms are immaterial. It should not be the policy of the FCC to allow the largest companies to write the regulations that will determine the future of the Internet.”

Of course, one of the unnamed corporations is Google – whose CEO Eric Schmidt sits on the Board of the New America Foundation.  We found their allegory to the robber barrons of old reminiscent of the laying out our case against the books settlement:

“In 1871, three powerful railroads secretly approached John D. Rockefeller, proposing an audacious scheme.  The railroads wanted Rockefeller to transport oil over their lines.  More than that, the railroads needed to suppress cutthroat competition among themselves, to raise prices to customers and to protect their markets against new competitive innovations. So the railroads secretly proposed that Rockefeller act as their “evener,” to ensure a stable market division among them.  Through Rockefeller, the three railroads consolidated their market positions and insulated themselves from the rigors of competition.

In aid of their own business interests, the railroads dramatically increased Rockefeller’s market power.  The railroads secretly proposed rate increases to Rockefeller’s competitors and provided hidden rebates to Rockefeller’s own company, making Rockefeller “all but omnipotent in oil refining,” according to one biographer.  Rockefeller seized the opportunity.  At the time he was only one of many competitors in the oil refining market.  But he saw that he could dramatically improve his own competitive position by helping to suppress competition in the rail industry.  …

…The parties before this Court have created in the Google Books Settlement their own modern day version of the South Improvement Company.  Google and the plaintiff publishers secretly negotiated for 29 months to produce a horizontal price fixing combination, effected and reinforced by a digital book distribution monopoly.  Their guile has cleared much of the field in the digital book distribution, shielding Google from meaningful competition.”

It’s quite something when the Google-backed New America Foundation is equating Google with Standard Oil in the same way we did in our brief.  As Albanese writes, “…the company gave those critics new ammunition.”  But the real ammunition, as GBS objectors have known all along, is the truth.

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