Too big to fail turned out to be wrong for banks and other corporations.
But don’t tell that to Google, which has quickly expanded into making
smartphones, mapping streets of the world, streaming videos, connecting
friends and selling digital books.
As Washington focuses more on Google’s explosive growth, one thorn in
the company’s side is John Simpson, a 62-year-old veteran journalist
with a deep suspicion of big business and a mission to break up the
search giant.
Federal regulators have launched a handful of investigations of the
Internet behemoth — which dominates Web search — to ensure it doesn’t
unfairly hurt competitors and consumers in its feeding frenzy of online
businesses. So far, there hasn’t been a full antitrust review of the
variety that hobbled Microsoft, AT&T and Standard Oil.
But Simpson thinks that needs to happen.
He’s no longer in the newspaper business, having lost two jobs during
"restructurings," he says, scooping the air with curled fingers. Now
Simpson works for a nonprofit group called Consumer Watchdog, where his
singular focus is turning up the regulatory heat on Google. With its
brand appeal, he says, Google is an ideal target.
He’s turned the tables, digging up data on the giant that tracks every
move its users make and collects information without their knowledge.
Also, he said, the company unfairly uses its size to barrel into new
businesses.
Google says that just because it’s big doesn’t mean it’s bad. In other
words, it hasn’t used its dominance in search to edge out competitors
unfairly in other businesses it enters. An example of that would be
forcing cellphone makers who use Android software to use only Google’s
search engine and YouTube on those phones.
Nonetheless, the company has responded to antitrust finger-pointing by
beefing up its staff in Washington. It also hired a lawyer focused on
competition. He and others have given more than 100 talks to Hill staff
members, regulators and journalists, saying that Google is just one
click away from losing its 65 percent dominance in search.
"We’re always happy to engage with groups that are interested in
constructive solutions, but they seem more interested in grabbing
headlines," said Adam Kovacevich, a spokesman for Google.
Simpson doesn’t deny that this is a battle he takes personally.
"You become convinced something is wrong with corporate America if
someone who has loyally worked for 30 years can be thrown out on his
ass," Simpson said last week over a ham sandwich lunch at Jimmy T’s
diner on Capitol Hill.
From foes to friends
Yet true to Washington’s playbook, he’s found unexpected allies. That
meant making friends with likely opponents: corporate giants such as
Microsoft.
Last month, Simpson organized a news conference with lawyers
representing Microsoft, Yahoo and Amazon and other Google competitors
after he petitioned the Justice Department for a broad antitrust
investigation. He found he was in good company.
Joseph Bial, an attorney for the search start-up MyTriggers, talked
about his client’s lawsuit against Google in Ohio for allegedly putting
the competitor out of business by raising minimum bids for keyword ads
by 1,000 percent. Bial also works for Microsoft but said his role in the
MyTriggers case is separate.
Gary Reback said his Open Book Alliance, whose members include
Microsoft, Yahoo and Amazon, think Google has unfairly precluded
competition in the digital book market through a settlement that gives
it first dibs on millions of titles.
"Look, we have all found similar concerns with Google and are coming
together to show this is not a small problem," said Reback, an antitrust
lawyer who a decade ago was on the other side, trying to break up
Microsoft.
Simpson’s crusade against Google comes amid growing public frustration
that big corporations are largely responsible for a stubborn recession
that has kept people out of jobs and forced them to foreclose on homes.
Although still relatively unknown, he’s become an aggressive player in a
growing party of companies and privacy and consumer groups who have
called Google’s business practices and influence into question.
Every month, Simpson, who lives in Santa Monica, Calif., comes to
Washington to meet with staff on the Hill and regulatory agencies,
journalists and corporate lobbyists. Simpson said he met last week with
Jim Tierney, chief of the networks and technology section of the
antitrust division of the Justice Department, and staffers about his
petition for a broad investigation. Last year, he testified before
Congress about privacy and competition concerns in Google’s book
settlement.
Simpson’s work is funded by the Rose Foundation, which provides grants
for projects like privacy advocacy, and other charitable organizations
that have no corporate ties, he said. He has a budget of about $200,000
that covers his salary and travel and was recently given a grant from a
charitable foundation he won’t name because he is afraid Google will
press that foundation to pull its funding.
According to Consumer Watchdog President Jamie Court, there was a
precedent. He said Google called the Rose Foundation to yank Simpson’s
project last year. Google declined to comment on the claim.
Hired as a ‘hell-raiser’
White-haired with black-rimmed glasses, Simpson smiles frugally, a
trained skeptic after decades of editing foreign news for USA Today and
the Los Angeles Times. Before joining Consumer Watchdog, he spent a few
years soul searching, teaching in Ireland and going to graduate school.
He found a calling when his wife saw a Consumer Watchdog want ad looking
for "hell-raisers." He speaks as plainly as his brown L.L. Bean boat
shoes.
"I’m a hell-raiser. That was what I was hired to be," Simpson said. "The
more I looked, the more I saw that this company was abusing its market
power to dominate book search and now the mobile marketplace."
Those and other practices by Google don’t sit comfortably with
regulators, either. The Justice Department said Google’s digital book
settlement could give it an unfair advantage in the burgeoning market
for e-books.
Chief executive Eric Schmidt’s seat on Apple‘s board, as both companies compete on mobile
phones, was scrutinized by the Federal Trade Commission and led Schmidt
to give up his board position. Now, the FTC appears skeptical of a
merger with AdMobs, which competitors argue will extend Google’s search
dominance onto mobile phones, according to Bloomberg News.
"It is entirely appropriate to investigate not only Google but the
entire developing space because it is incredibly important and changing
so quickly with affects that will be felt in every household not only in
the U.S., but in the world," said Bert Foer, head of the American
Antitrust Institute.
Google isn’t the only high-tech giant under a microscope. The FTC is
suing Intel for anticompetitive practices and investigating IBM
on antitrust allegations. Simpson isn’t out to only bash Google: He’s
praised the company’s decision to withdraw from China because of
censorship practices there.
Yet his pursuit doesn’t necessarily come from grass roots. Consumer
Watchdog doesn’t have the populist structure of Consumers Union, the
nonprofit organization that publishes Consumer Reports, for example,
with hundreds of thousand of members who are regularly surveyed on their
views.
And Simpson acknowledges that Consumer Watchdog’s strategy is to grab
attention on a complex topic that is often overlooked in Washington.
Drawing from his journalism background, he said, he knows he’s got a
better story when focusing on the biggest Silicon Valley brand around.
Talking to lawmakers about privacy concerns in digital book search can
have a eye-glazing effect. Saying Google isn’t living up to its motto to
"don’t be evil" resonates with people, he said.
"If you can focus your attention on them, it shines a light on the whole
industry," Simpson said. "I don’t see any problem with publicity in
good things. I’d say, ‘just spell our name right.’ "
As for Simpson’s alliances with other corporate giants, he says they are
necessary and approached with a healthy dose of skepticism.
"This is purely professional," he said.
