Pamela Jones Harbour Partner Wednesday, July 13, 2011 CWAG 2011: “Internet Search Engines – Latest Issues”

3 Former Federal Trade Commissioner ( ) Well recognized for her knowledge of evolving areas of competition and consumer protection law, including privacy and data security issues. Pamela Jones Harbour Partner Washington, D.C. Fulbright & Jaworski L.L.P

It’s All About the Data  Many of the most interesting consumer-focused elements of this change all require data : ●personalized media ●social media and ●mobile platforms  How to allow the benefits of this data-flow without undermining legitimate personal privacy concerns and without thwarting innovation?  “Free” products paid for with consumer data 4

5 Privacy and Competition  Privacy should be cognizable as a non- price dimension of competition law  “Consumer data“ should be the basis of a relevant antitrust product market.

Search Result Manipulation?  “advertising funded search engines will be inherently biased towards the advertisers and away from the needs of consumers.”  “advertising income often provides an incentive to provide poor quality search results.”  “a search engine could add a small factor to search results from ‘friendly’ companies, and subtract a factor from results from competitors. This type of bias is very difficult to detect but could still have a significant effect on the market.”  “The Anatomy of a Large-Scale Hypertextual Web Search Engine,” Sergei Brin and Lawrence Page (1998), available at (App. A: “Advertising and Mixed Motives” ). 6

Federal Antitrust  FTC investigation  Section 2 of the Sherman Act could apply to “the truthful, non-misleading speech of firms that, due to their market power, can affect the competitive landscape...” Sorrell v. IMS Health Inc., ___ U.S. ____ (June 23, 2011) (Breyer, J., dissenting, at 12). 7

Search Advertising - Japan  In 2010, Google agreed with Yahoo! Japan, for Google to serve ads for Yahoo! Japan.  As a result of the deal, Google had over 90% market share of search advertising in Japan.  Immediately following the announcement of the deal, prices for search advertising in Japan rose by up to five times pre-deal levels.  Toshio Aritake, Google Ad Rates Soar After Plan to Consolidate with Yahoo Japan, A NTITRUST & T RADE R EG. D AILY, Nov. 29, 2010, available at =atdbulallissues&fn= &jd=a0c5k3k3p1&split=0. 8

“If you have something that you don't want anyone to know, maybe you shouldn't be doing it in the first place.” – Eric Schmidt (CNBC interview, Dec. 2009) “Google policy is to get right up to the creepy line and not cross it.” – Eric Schmidt, former Google CEO (Washington Ideas Forum, Oct. 2010) “I actually think most people don't want Google to answer their questions.... They want Google to tell them what they should be doing next.” – Eric Schmidt (WSJ, Aug. 2010) “[N]othing you do ever goes away and nothing you do ever escapes notice.... [T]here isn’t any privacy, get over it.” – Vint Cerf, Google VP & Chief Internet Evangelist (Technology Alliance address, Aug. 2008) “The default is not to use the most secure form because it slows everything down.... Ultimately, we're not going to do anything that disadvantages speed.” – Eric Schmidt (New America Foundation conference, Nov. 2008) on Privacy “In a world of asynchronous threats, it is too dangerous for there not to be some way to identify you.... We need a [verified] name service for people.” – Eric Schmidt (Techonomy conference, Aug. 2010)

THANK YOU 10

When You Think PRIVACY, COMPETITION, AND DATA PROTECTION, Think Fulbright. TM