Google's a US Asset in the Internet Wars

Dana Blankenhorn - The Street  DEC 21, 2012 2:45 PM

Google stands for western values on the Internet, so western governments will tread lightly with its antitrust violations.

 


As recently as a month ago I would not have believed Google (NASDAQ:GOOG) could get out of its antitrust problems with just an agreement to do some things better,as Politico reports.

Google's violations of antitrust law were serious.

First, its use of patents obtained with Motorola Mobility was abusive. The Motorola patents dealt with essential mobile phone functions, licensed as part of standards under Fair, Reasonable and Non Discriminatory, or FRAND, terms.

Now, in courts around the world, the company has been demanding new, bigger royalties for these patents, trying to eliminate liability for its own violations of Apple's (NASDAQ:AAPL) design patents. In doing this it was, in the view of critics like Florian Mueller of FOSS Patents, violating the basic comity underlying the setting of standards, and abusing its position.

Second, more important, its search results seem to be failing to find competitors' products of long-standing and finding, instead, newly created Google products.

Gary Reback, a noted anti-trust lawyer writing in USA Today, and Scott Cleland, who has made a living supporting the interests of the Bell companies on his own blog, compare Google to a crooked dealer at a poker game, hiding its tricks from public view inside a "black box."

This is the same thing that got Microsoft (NASDAQ:MSFT) in so much trouble back in the 1990s. When you dominate a market, and you use that domination to seize control of other markets, that's illegal.

So how did Google get out of trouble, as Information Week expects? While final decisions will be announced early next year, writes ZDNet, I think the answer lies in three letters -- ITU.

The International Telecommunications Union is a United Nations agency that met this month in Dubai with the express intention of re-regulating the Internet. China and Russia, along with authoritarian governments of every stripe, submitted proposals, which Bloomberg reported on, that would basically put the Internet under local government control.

Local governments would be allowed to look at all data packets entering or leaving their citizens' devices, control what was said, and control what was read within their borders.

It's not like this isn't already happening, to an extent, but under this proposal it would all be sanctioned through a global entity. It would be legitimate under international law, and all efforts to get around such blocks would become illegal. Governments would control the routing of packets, and all defiance of local will would supposedly cease.

The US and European Union led a successful effort to get this treaty language withdrawn, as WebProNews reported. The Internet was safe, for now. But everyone knows the despots will be back. I think American policymakers recognized, somewhere in this fight, that a powerful private company like Google is their best long-term defense in this coming global battle over the Internet.

Sure, China has managed to "replace" Google and other western Internet companies inside its borders, but only to an extent. Getting over the "great firewall" is a key act of defiance inside China, and a fairly common one. Google has the technical weapons and the financial strength to keep enabling that in ways even western governments can't.

So there's a sort of quid pro quo developing. In exchange for using its technical and financial might on behalf of western standards it believes in, Google is being left alone in the name of a free Internet. Whether Google is "evil" or not is less the question than the fact that Google, the Internet's most powerful player, is American.

This isn't all good news. Local governments around the world are going to increase their pressure for taxes, for censorship, and local as opposed to global control of the resource. Google will keep having to balance its own interests against those of local government critics -- its recent move to avoid obscenity in image search, reported by the Los Angeles Times, is one indication of how it will do this.

But as long as western governments see Google as being on their side, they will tread lightly.

At the time of publication, the author had positions in MSFT and GOOG.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage