Embarrassing: New Antitrust Suit Against Google Confuses WhatsApp Encrypted Backup Option With Giving Google A Backdoor

Say That Again

from the guys,-guys,-guys dept

Look, I get the fact that people are concerned about big technology companies. I’m very concerned about big technology companies too, and think it’s important that we figure out ways to build more competition, and to get away from reliance on many of these companies. But the way in which so many assume that antitrust is the only way to get there is problematic. And it’s even more problematic when the antitrust lawsuits they file seem to be mostly based on misunderstanding or misrepresenting certain things with totally innocuous explanations. That keeps happening.

The DOJ’s antitrust lawsuit against Google is embarrassingly weak, and seems to confuse who has market power (e.g., claiming that Google paying billions to Apple is some sort of proof of its own dominance). The FTC and nearly all states’ antitrust suits against Facebook are fundamentally stronger than the DOJ’s case against Google, but still, astoundingly weak in terms of actual evidence of antitrust violations.

This week, there are two new entrants. One lawsuit was just announced today, and we’ll explore that one later, but yesterday, Texas Attorney General Ken Paxton, who was one of the earliest Attorney Generals who spoke out in favor of going after Google, has now done so, with a an interesting antitrust lawsuit against the company, done with the support of 9 other states, all with Republican Attorneys General. Notably, some of the states (though not all) also signed onto the DOJ’s antitrust lawsuit.

This lawsuit takes a different approach from the DOJ’s lawsuit, which focused on the market for general search services and search advertising. This one focuses on general display advertising. And maybe there’s an argument that Google is doing something bad in how it handles the display advertising market. Indeed, some of the complaint (though heavily redacted), suggests some potentially sketchy behavior on the part of Google, to block competition in the ads space. If that’s proven, that would be bad, and it would be good if the lawsuit forced Google to change those practices and enable more competition.

There’s also a heavily redacted section, that hints strongly that Google and Facebook worked out some sort of agreement to keep Facebook from competing as directly with (and undercutting the pricing of) Google’s display ads business. And that does sound like a potentially huge deal — one that very well might truly be anticompetitive. But the details and what’s redacted are important.

It would be great if the lawsuit focused on things like those two points. But it also includes other things that seem to suggest a near total and fundamental misunderstanding of how technology works, which does not provide much confidence that the Attorneys General know what they’re talking about in the other parts. Notably, there’s this scary bit that started making the rounds on Twitter, with people asking what the fuck was going on:

Google also has violated users? privacy in other egregious ways when doing so is convenient for Google. For instance, shortly after Facebook acquired WhatsApp, in 2015, Facebook signed an exclusive agreement with Google, granting Google access to millions of Americans? end-to-end encrypted WhatsApp messages, photos, videos, and audio files.

That raised many eyebrows, because, if true, that’s huge news. Most of the details here are redacted as well, but the complaint calls this a “fundamental breach of privacy.” But, this seems like a giant misunderstanding by the lawyers who wrote the lawsuit. What they appear to be referencing is a deal from 2015 in which Google allowed WhatsApp users to easily back up their encrypted data to Google Drive. That’s a useful feature, and not at all nefarious. The content is still encrypted, so Google doesn’t get access to anything more than the encrypted blob. Google even has this integration as a Google Cloud case study.

That’s not exactly the behavior of a company that has a nefarious deal to snoop on everyone’s WhatsApp messages. Notably, that integration is a totally voluntary opt-in feature that is really useful. It lets you restore your WhatsApp if you’re switching phones, or just make sure you don’t lose all your messages if you lose or break your phone. It’s a good thing — not some evil attack on privacy, as the lawsuit suggests.

There is some more redacted content around this, suggesting that Facebook shared some kind of information with Google that it shouldn’t have, but the non-redacted parts seem to misunderstand the technology, which seems problematic. It also seems emblematic of lawyers looking to twist anything against the company, rather than looking for actual violations.

As for the rest, much of it seems to misunderstand the ad market. In particular there’s a long discussion on header bidding, and how Google did not like header bidding and wanted to kill it:

Finally, Google wanted to eliminate header bidding to foreclose any competition with its publisher ad server monopoly. The companies involved with header bidding would have a foothold on a key function of Google?s ad server: routing a publishers? inventory to exchanges. With that, a major header bidding player like Amazon or Facebook was well-positioned to eventually compete directly with Google?s monopoly ad server. Without control over publishers? inventory, Google would lose the ability to block exchange competition and tilt trading to Google.

I’m a publisher. And, every freaking day, we get approached by some new online ad firm that wants us to sign up to use their ads because of their use of header bidding. There must be hundreds of ad providers now offering header bidding. Honestly, as a publisher, at this point, it’s almost impossible to put ads on your site that don’t make use of header bidding.

If the all powerful Google set out to quash header bidding, holy crumb, did it fail.

There are elements (again, too much redacted) in the complaint that do seem concerning. And if the end result of this lawsuit is to force Google to play more fair with display ads, that would be a good thing. So I’d be happy if that were the result here. But I’m concerned by what appears to be a clumsy misunderstanding of the technology, and the status of the advertising market today.

Filed Under: antitrust, cloud backup, competition, display ads, encryption, ken paxton, messages, privacy
Companies: facebook, google, whatsapp