Nestled among the lofty
rhetoric of “hope and change,†Barack Obama made a core
promise during the 2008 campaign that he would put an end to
the corporate cronyism that has long pervaded the political
system. “The days of sweetheart deals for Halliburton will
be over when I’m in the White House,†he proclaimed. What President Obama left
out however, was that the days of sweetheart deals for his
cronies had only just begun–with his chief corporate
advocate, Google, quickly emerging as the Halliburton of his
administration.
Though the Internet giant
recently faced serious federal antitrust charges that might
have broken up other companies, it emerged virtually
unscathed just two months after President Obama won
re-election with significant financial and creative
assistance from Google and its executives. Unquestionably
the president’s most indispensable corporate ally, the
terms of Google’s recent antitrust settlement are just the
latest example of crony capitalism benefiting the company
under the Obama Administration.
An investigation by the FTC
found Google to be engaged in activities involving the
illegal manipulation of search results to favor its own
products, scraping content from other websites without any
provision allowing those with objections to opt-out, and
imposing restrictions that prevent portability of search
advertising campaigns across AdWords and other platforms.
Google is still facing a
litany of cases at the state level–Texas, California,
Ohio, New York, and Oklahoma–as well as the European
Union. Yet Google walked away from the federal case with a
non-binding “handshake†agreement in which it says it
will make minor changes to some of its search functions.
Moreover, there is no way for the FTC or any other agency to
enforce the terms of the agreement should Google decide not
to comply.
Regardless of how people feel
about antitrust laws, the hallmark of corruption is to
selectively enforce laws in a way that harms your opponents
and accommodates your allies. In this case, an
administration that has been aggressive on antitrust
enforcement when, for instance, spiking the AT&T and
T-Mobile merger, took no enforceable action against Google
even after finding wrongdoing.
It raises a major ethical
conflict when the beneficiary of an agreement with terms so
favorable that their propriety is questioned, has such
incestuous ties to the very administration granting the
dubious arrangement.
Google,
and particularly its Executive Chairman Eric Schmidt, have a
relationship with President Obama that is too close for
comfort. Schmidt has been a top-dollar donor to Obama since
2007, has consulted on his campaigns, and currently serves
as a member of the President’s Council of Advisers on
Science and Technology. According to press reports, he was
offered the post of Treasury Secretary in the second
term–but ultimately declined. While holding court as one
of Obama’s most trusted and generous confidants, Schmidt
has continued to serve as one of Google’s most visible
government relations operatives.
Since 2008, there has been a
steady flow of cash, personnel, and technology from
Google’s California headquarters to the White House.
Google employees have given the President over $1.5 million
in combined donations. In fact, they were his fourth-largest
source of cash in 2008, and in third-largest in 2012.
Google’s biggest contribution however was the
specially-designed technology, not yet available to the
public, that allowed Obama to connect with voters in ways
his opponents could not.
The sad truth is that this
settlement is just the latest, amid a long line of examples,
in what has emerged as the cornerstone of Google’s
Obama-era business model: break the law, or make the law, in
a way that shackles opponents, while boosting their own
bottom line – without suffering any real consequences.
While Google scratched
Obama’s back, the favor has been returned in spades. It
has happened with “net neutrality†regulations and
rigged spectrum auctions being pushed through at the FCC,
and in addition to this latest settlement, the DOJ’s
voluntary 2011 settlement with Google over additional
illegal advertising practices.
Some conservatives like
Google, hate regulators, and therefore look favorably on the
company’s string of free passes. But Google opposes big
government only when it restricts Google, and the Obama
administration has no commitment to regulatory restraint.
Google, like Halliburton, should play by the same rules as
everyone else.
Erik Telford is the Vice
President of Strategic Initiatives & Outreach at the
Franklin Center for Government and Public Integrity.
