Obama administration officials dismissed substantial evidence a decade ago that Google was building a monopoly, missing an opportunity to rein in the company when it still had viable competitors.
Instead, politically appointed politicians overruled Obama Justice Department recommendations to sue Google over its push to take over mobile internet searches, according to hundreds of pages of internal Federal Trade Commission (FTC) memos obtained by Politico.
The FTC’s job is to enforce civil U.S. antitrust law and promote consumer protection. The so-called independent agency is headed by five commissioners, nominated by the president and confirmed by the Senate. Each serves a seven-year term.
Justice Department and state regulators are now suing Google over the same multibillion-dollar smartphone contracts that FTC investigators flagged years ago.
The contracts gave Google exclusivity as the default search engine on 86 percent of U.S. smartphones for years — a huge advantage when Americans were flocking to smartphones, Politico reported. In its antitrust suit against Google in October 2020, the Justice Department revealed that Google pays Apple up to $12 billion a year to be the default search engine on iPhones, iPads and the Safari browser. This keeps rivals such as Yahoo and Microsoft from getting access to people’s devices.
Barack Obama has been criticized for a conflict of interest over his longstanding friendship with Eric Schmidt, who was CEO of Google from 2001 to 2011 and its executive chairman from 2011 to 2015. Schmidt went on to be executive chairman of Google parent Alphabet from 2015 to 2017, and was a technical advisor until 2020.
Schmidt was a campaign adviser in Obama’s presidential runs and led big donations from the tech industry. The communications sector gave five times more money to Obama–$25 million in total–than to his Republican opponent, The Atlantic reported in 2011.
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Records show that Schmidt played an important role in both Obama’s election victories and had open-door access to his administration, according to Tech Transparency: “…his visits to the White House coincided with the government’s decision-making on a wide range of issues central to Google’s business interests. Those included an antitrust investigation by the (FTC)…”
Three weeks after Obama was re-elected for a second term, Google CEO Larry Page met with FTC officials for formal settlement talks in the monopoly lawsuit. That meeting preceded the end of the FTC’s antitrust probe.
The revolving door between Silicon Valley and the White House wasn’t limited to Google, but it’s notable. Former Google staffer Megan Smith became chief technology officer of the U.S. in 2014, and Andrew McLaughlin, Google’s head of global public policy, became the White House deputy chief technology officer in 2009.
Forbes estimated Schmidt’s net worth in 2021 to be $18.6 billion.
