UnHerd: How did Obama create the Google monster?
Google faces US President Joe Biden's efforts to regulate Big Tech, while his prior association with the issue highlights how the 2012 US election and Google's influence have contributed to the current Big Tech dilemma.
In a significant legal showdown, Google finds itself as the defendant in a massive competition lawsuit, marking the most substantial case of its kind in two decades. This lawsuit is seen as a crucial component of President Joe Biden's determined efforts to curb the influence of Big Tech giants, with indications suggesting that a lawsuit against Amazon is looming on the horizon.
It's worth reflecting on the fact that President Biden was a part of the administration that played a role in the origins of this Big Tech predicament.
Obama's unexpected victory in 2012
Back in 2012, Obama achieved a surprisingly comfortable electoral triumph, surpassing the expectations of his team by a substantial margin.
The credit for this remarkable victory was largely attributed to Google's Executive Chairman, Eric Schmidt, who, in 2011, stepped down as CEO to take on a pivotal role in the campaign. Schmidt was the mastermind behind the campaign's efforts on Election Day, as he contributed to talent recruitment, technology selection, and the guidance of campaign manager Jim Messina.
During this period, Google's rival, Microsoft, ran a bold and highly personalized ad campaign called "Scroogled," featuring a caricature of an ominous Eric Schmidt. Additionally, the Federal Trade Commission (FTC), one of the federal competition watchdogs, had constructed a compelling case alleging that Google had exploited its dominance in search to the detriment of consumers and innovation, setting the stage for a lawsuit.
Surprising developments post-2012 vote
Despite the expectation of legal action, within weeks of the 2012 election, all investigations were abruptly terminated, and no lawsuits materialized during Obama's second term. Reports suggest that White House pressure in the spring of 2013 led to the cessation of the Scroogled campaign, fostering a newfound collaboration between Microsoft and Google.
It was only years later that insight was gained into the FTC's robust case against Google, thanks to an inadvertent disclosure of internal materials to a newspaper. FTC staff had advocated for lawsuits on three of the four investigated points, accusing Google of abusing its dominant market position. However, no lawsuits were pursued, as the Obama administration opted for negotiated behavioral remedies.
This period post-2012 is viewed as an extreme example of "regulatory capture" in Washington. Notably, former Google executives and senior lawyers from firms retained by Google assumed key roles in the Obama administration, including Assistant to the President, Chief Technology Officer, head of the patents office, and even two top antitrust officers.
The impact on Big Tech
Since Google evaded antitrust action a decade ago, Big Tech's major players, including Amazon, Meta, and Microsoft, have expanded their influence fivefold. Google has extended its dominance into areas like smartphones, which government agencies had initially sought to limit. A considerable portion of this growth is attributed to the decisions made during the Obama era.
The lack of rigorous scrutiny allowed Big Tech to thrive unchecked. If President Obama had not been swayed by the appealing promises of a tech-utopian future presented by Google a decade ago, the Big Tech dilemma might have been averted altogether.