All: this looks like a pretty well-reported and well-sourced article. Please don't post shallow-indignant comments in such a thread. It leads to boring, repetitive conversation and there's enough of that already.
There doesn't seem to be a lot of "there" there in terms of misconduct, relative to what I've seen elsewhere in the past 4 years. If anything, it's a bit of a new ethical question caused by the structure of a government office. Certainly something to look into but if we want to look at ethical issues of money in politics, there are a lot of easier places to start IMO.
I don't know anything about this topic yet, but just reading their denial raises red flags for me before I even start reading the Politico article.
> Schmidt Futures staff had no authority to make any policy decisions and did not do so through OSTP, and the story presents no evidence or examples to the contrary.
Isn't this a clear misdirection? Nobody is accusing them of having "authority" (they're not the government!), but "influence". It's denying a nonexistent (and
nonsensical) accusation, which is never a good sign. Right?
Yes, it is. They present another thing and discredit that, in order to discredit the original premise. Its the structure of a strawman. In any case, their public sector work is probably frustrating and they havent achieved nearly the influence that they want, so its probably accurate but if it wasnt, what would we expect them to say?
I think the whistleblower and a lot of people here are noticing that there are inherent conflicts of interest that are easily misdirected and subverted by the due process involved in making these institutional conflicts.
So yes, the whistleblower messed up as of course the proper chain of command looked into it and found no legal issue, because the legalese version of ethics was met.
This is different from whether the law needs to be revisited.
This is also different from whether the people with the financial conflict have a noble goal.
Many people with political influence believe in their goals. Some benefit more people, others dont.
> 1) US has been accepting philanthropic funding for staffing for 25 years.
Does not discuss the scale, impact or % of Schmidt's influence.
> 2) We are experts at technology and with rapidly changing landscape, we can contribute.
Yes, this is precisly the problem. Google has enormous monopoly power and you, Mr. Schmidt, are the beneficiary of that power. There is a conflict of interest here, need not be spelled out.
> 3) We love helping US Gov because of 1971 IPA act of "tours of duty".
Of course, Mr. Schmidt.
> 4) We don't have any influence. We are one of the 20 orgs. Funding is administered by neutral party.
There is a specific assertion in Politico article. Schdmidt Futures are not directly paying people's salaries, but quoting the Politico article:
> Schmidt maintained a close relationship with the president’s former science adviser, Eric Lander, and other Biden appointees. And his charity arm, Schmidt Futures, indirectly paid the salaries of two science-office employees, including, for six weeks, that of the current chief of staff, Marc Aidinoff, who is now one of the most senior officials in the office following Lander’s resignation in February.
Schmidt's rebuttal completely glosses over the details.
> 5) Schmidt Futures staff had no authority to make any policy decisions and did not do so through OSTP, and the story presents no evidence or examples to the contrary.
Schmidt Futures has no direct authority, that's correct. Politico article explicitly sources indirect authority of Schmidt Futures.
> 6) OSTP has always had and continues to retain full discretion and ownership over appointments, hires and policy decisions.
Mr. Schmidt, we can see the Front door. Clearly, it is locked with US Gov™ seal. You are not addressing Back door claims in the article.
Google literally is the poster child of Big Tech monopoly masquerading as a “Technology company” which is a false broad characterization of what it does. Revenues are overwhelmingly from search ads.
If you haven’t been living under a rock, you should be familiar with a decade long fight it has put up to fight off its monopoly status.
Market share does not a monopoly make. Do you really consider Bing to be so bad that you don't even count it as a competing product in the same product category as Google Search? The cost to switch is literally nothing.
That's a common refrain from the people holding the monopoly. It's simply untrue.
If you are the market leader by a wide margin, you end up dictating the landscape.
> Do you really consider Bing to be so bad that you don't even count it as a competing product in the same product category as Google Search?
I can create a car in my garage, but I'm not competing with Honda. What's the point here? That because something exists it is a market force that influences others? Search (and the associated advertising, data collection, etc) exists as a momentum driven product^ via the network effect. How easy it is to switch to Bing or buy the car I made, is wholly irrelevant.
^That wasn't always true, as in the beginning of search circa the 90s, but it's true enough today.
> That's a common refrain from the people holding the monopoly. It's simply untrue. If you are the market leader by a wide margin, you end up dictating the landscape.
So you've missed the actual argument here - how is Google doing that? What are the downsides? Because speaking as someone who switched to DDG out of concern both at Google's social policies and the sheer amount of data they collect, I have been unable to detect any impediments.
I do believe nonetheless that Google has a slightly better search index - the results when I check there seem a little more reliable (slightly more varied results, maybe. Hard to put a finger on the difference). They make a really good search engine and fight hard for that 90% market share. But if we decide the word "monopoly" means "makes a good enough product to command 90% of the market" I don't see what the intellectual argument against monopolies is going to be. Sounds like something we want to encourage.
When IE was a monopoly way back at the dawn of the internet, the main complaint was it really sucked as a product but people couldn't switch away even if they wanted to because banks and stuff (tax office in my case I think :S) required Windows/IE-only features. That is what I'm against.
Economically a monopoly harms customers with the ability to dictate prices via market power, think OPEC controlling oil supply. In an ideal world, there would be multiple companies offering search ads who compete to give advertisers the best RoI. There would be multiple realistic options at good prices for companies who need office productivity software, Microsoft still has nearly 90%. If I wanted to sell in-app purchases, there would be multiple payment processors I should be able to use and I can chose who takes the smallest cut which would be way less than Play Store and App store
> In an ideal world, there would be multiple companies offering search ads who compete to give advertisers the best RoI.
There are multiple companies that offer search ads, and they compete aggressively, they just compete primarily on the consumer experience so that they will be in a position to charge a higher price to advertisers because satisfying consumers makes their corporation-facing product (search ad slots) more valuable. This is what we as a society want. Consumer protection laws do not exist to protect businesses. Nobody is owed a viable business model. The cost of buying search ads is (mostly) dictated by how much other businesses are willing to bid for those ad slots.
> There would be multiple realistic options at good prices for companies who need office productivity software, Microsoft still has nearly 90%.
There are. It's a hard market to compete in, but Microsoft has several competitors in this space, notably Google Workspace, but also some lesser known ones like Amazon WorkDocs. Recently Apple has been targeting this market as well.
> If I wanted to sell in-app purchases, there would be multiple payment processors I should be able to use and I can chose who takes the smallest cut which would be way less than Play Store and App store
This topic has been beaten to death on HN, and nothing valuable will come of further discussing it. I'll suffice it to say that Apple's product is the iPhone ecosystem in its entirety, and defining a market as a single company's product and declaring them to be engaged in anticompetitive practices within that market amounts to a misuse of terminology.
We won't agree so I'll leave it but I encourage you to read the economic definition of monopoly power, as its not based on terminology or legal definitions
Laws don't require a literal monopoly, but significant market powers so yes, market share does a monopoly make via the power of that share in most circumstances. Of course being a monopoly in the legal sense isn't in and of itself illegal, it's leveraging that power to self serving, uncompetitive purposes.
Courts do not require a literal monopoly before applying rules for single firm conduct; that term is used as shorthand for a firm with significant and durable market power — that is, the long term ability to raise price or exclude competitors. That is how that term is used here: a "monopolist" is a firm with significant and durable market power. Courts look at the firm's market share, but typically do not find monopoly power if the firm (or a group of firms acting in concert) has less than 50 percent of the sales of a particular product or service within a certain geographic area. Some courts have required much higher percentages. In addition, that leading position must be sustainable over time: if competitive forces or the entry of new firms could discipline the conduct of the leading firm, courts are unlikely to find that the firm has lasting market power.
The claim that Google has significant and durable market power in the search engine market doesn't hold up even by the FTC definition you quote here. There's plenty of competition, and the switching cost for consumers is literally nothing. They clearly aren't able (or aren't trying) to exclude competitors, since all of their competitors I can think of are still in business (Bing, Baidu, Yahoo, Yandex, DuckDuckGo, Brave, probably more...), and they clearly don't have the ability to raise prices (can you imagine how instantly Google Search would be consigned to irrelevance if they tried to charge users for searches?). This isn't a market that's in the grips of a monopolist limiting competition, this is an extremely competitive market, so competitive that the cost to the end-user has been driven down to literally nothing. It's not quite the most competitive market that exists, since the market for credit cards is so competitive that credit card providers actually pay users to use their credit cards, but it's close, and Brave has been testing those waters in the search engine market recently.
>and they clearly don't have the ability to raise prices (can you imagine how instantly Google Search would be consigned to irrelevance if they tried to charge users for searches?
The prices they raise would be on advertising. They do have significant competition with Facebook and the like in the internet advertising industry.
>the cost to the end-user has been driven down to literally nothing
The end user is the product not the customer. The customer is advertisers.
So I think you are missing what market power means. Since Google earns most of the profits with search, it allows them to use those funds do things like:
1. Acquire YouTube
2. Run YouTube for two years without any supporting ad revenue
3. Making it impossible for anyone else to compete with YouTube in the first two years because they don't have that kinda bank.
4. Allow users 1G of storage on Gmail and offering it for free, blowing away (killing) any competitor.
5. Buy and releasing Android OS for free to hardware vendors and including Google services on those OSs, instantly taking the majority market share on the brand new mobile industry.
6. Build AWS.
There are many more, but all those investments were built on the revenue from Google search.
The topic of discussion from the original comment is a claim that Google has a monopoly on internet search. Whether or not Google has a monopoly in advertising is a separate topic and not one of huge significance because consumer protection laws exist to protect consumers. Google operates a multi-sided marketplace, and has both consumers (in the legal sense, users that consumer protection laws protect) and more complex business-to-business relationships with advertisers. Profit-seeking businesses in business-to-business relationships are not given the same sort of affordances and protections as end-users, and generally only get protections in consumer protection law if there's a clear relationship between them being scalped and a negative impact on consumer welfare.
To your examples of Google's exercise of market power, these things have all broadly been great for consumers, and in each case listed have even also been great for a variety of businesses, further compounding the benefit to consumers. If this drove competitors out of business because they couldn't compete, that's fine. The point of antitrust legislation is to ensure competition exists so that consumer welfare is upheld. Nobody is owed a viable business model. I don't see the argument for these actions reducing competition in the economy or harming consumers. Competition to Youtube crops up from time to time and never seems to go anywhere because Youtube is a business that is extremely difficult to make profitable (i.e. they can't compete because their product is inferior). Many competing email clients exist, paid and non-paid. Buying Android, investing in it, and making it available to hardware manufacturers was a pro-competitive move, since it countered Apple's iPhone and brought a diversity of competing products into the marketplace. Building Google Cloud to compete with AWS is straightforwardly a pro-competitive move as well.
>Whether or not Google has a monopoly in advertising is a separate topic and not one of huge significance because consumer protection laws exist to protect consumers.
Again, you are misidentifying who the customer is. The customer is the advertisers not the users. The product is highly targeted advertising to users. The more Google knows about the user, the better their product (targeted advertising) is.
Business to business sales are not exempt from anti-trust laws. One of the things Microsoft got charged for was selling DOS to manufacturers based on the number of computers sold rather than the number of DOS installs. This was deemed anti-competitive and Microsoft's customer in this example was a business (computer manufacturers). This was a business to business anti-trust case.
>If this drove competitors out of business because they couldn't compete, that's fine.
I mean maybe. It gets murky because the customer is the advertisers. Imagine if Google released a car and gave it away for free. Almost all other car manufacturers would cease to exist. They were able to offer it for free because of the profits from search. The cost of running Gmail and YouTube is paid for by search profits. All this needs to be argued / decided in court, you and I can just speculate all we want. It won't be tried in court because of regulatory capture, which is really what the article is about.
>Competition to Youtube crops up from time to time and never seems to go anywhere because Youtube is a business that is extremely difficult to make profitable (i.e. they can't compete because their product is inferior).
Yes, this makes a lot more sense if you consider the product is the network of users to sell ads too, not the users themselves. Now you have the network effect which was built by being able to run YouTube for 2 years without selling a single ad.
>Many competing email clients exist, paid and non-paid
Yes but Gmail is #1 and it jumped there really quick because they were able to offer what no-one else could, because the subsidized moving into that industry with search profits, which no one else could. That's the anti-trust part.
Being better than the competition isn't the same as having no competition, and it's especially not the same as engaging in anti-competitive practices to prevent competition from existing. The purpose of consumer protection and antitrust laws is to ensure that market leaders hold their position by virtue of having the superior product and not by some other nefarious means. I don't think most people would dispute that Google Search is better than Bing. But is it really so much better that Bing doesn't even count as being in the same market?
Right, they are not a monopoly, they *have* monopolostic practices: have been caught giving advantage to their own ads on top of others, are scraping information from websites so people stay on search pages instead of opening links.
Those don't seem like examples anti-competitive practices in the search engine market. In fact they don't seem like anti-competitive practices at all. This first supposes that there's a meaningful "market" of "ads on Google", which is an unreasonably narrow scope of products to try to define as a market, and the second seems like a straightforward function of a search engine.
If Google Search did something like refuse to return results if you searched for "Bing" or "Yandex", that would be an example of an anti-competitive practice in the search engine market, but when I test those searches the first results are the Bing and Yandex homepages.
What BS, the presence of a competitor doesn't mean a firm doesn't wield monopoly power. The monopoly is in Search ads, ask any big advertiser to switch to their budgets to Bing and see what they say
The initial comment claimed internet search as the monopoly, and that's what I responded to. Also, try to be civil to avoid degrading the level of discussion.
If you want to talk about search ads, sure, maybe Google Search has a monopoly on search ads. If they do it doesn't seem like they wield that monopoly power to dictate prices, given that search ad slots are mainly auctioned to the highest bidder. And even if they do, so what? Businesses are not consumers, and claims that Google scalping advertisers negatively impacts consumers rely on indirect circuitous reasoning.
You aren't wrong in theory, but in practice it's silly to pretend like the average person knows anything but Google. There comes a point where inertia and market share need to be considered and for some products (like Google, but especially Android) it really feels like we're beyond that. Antitrust and monopoly laws are almost always going to lag behind the needs of reality.
I agree. I am, if anything, overzealous about screaming "corruption," but I really don't see it here. When someone worth $26bn sits on the board of a company (with no mention of equity) with ties to government contracts, it's hard for me to believe he's doing anything unethical for his own personal gain. There's just nothing of meaningful substance to be gained from it.
> relative to what I've seen elsewhere in the past 4 years. If anything, it's a bit of a new ethical question caused by the structure of a government office. Certainly something to look into but if we want to look at ethical issues of money in politics, there are a lot of easier places to start IMO.
This is all whataboutism. Either there is a problem here or there isn’t. If you find yourself comparing something to other corruption, that means it’s pretty questionable ethically.
> "Schmidt has made the development of 5G technology and artificial intelligence key aspects of his post-Google work and has advocated for a stronger federal role in funding both, along with biotech initiatives."
Solution: Set up a private research institution unaffiliated with government similar to the historically successful Bell Labs. Here's how it worked before:
Georgescu, I. Bringing back the golden days of Bell Labs. Nat Rev Phys 4, 76–78 (2022).
> "AT&T had a clear vision, that of offering universal connectivity to its customers. To achieve this well-defined long-term goal, the company consistently invested in R&D, planning ahead in terms of decades rather than years. Thanks to its government-supported monopoly, it could also afford to maintain the long-term thinking for half a century. Bell Labs was funded by what physicist and historian of science and technology Michael Riordan called “essentially a built-in ‘R&D tax’ on telephone service"
Google/Alphabet is essentially a monopoly these days with cash to burn, so they can certainly do the same thing. Cut the dividend to the shareholders and invest billions in independent R&D, just like AT&T did. Don't try to buy your way into federal agencies so you can direct their funds to private ventures.
Even better, change federal tax law such that the only way billionaires can escape a 90% income tax bill or corporations a 50% tax bill (highest tiers c. 1960) is to get a write-off by putting their money into such R & D efforts.
When A spends B's money on C, there's never going to be as much care as if B was spending their money on C or if C was spending their own.
I always used to think that science funding was an exception because knowledge was a public good in the way pollution is a public harm, but at the same time, what's to stop it from falling prey to the inevitable consequences of your congressman being too busy to take your calls unless you're a special interest group, that befall other programs of government spending?
Historically (since ~mid-20th century) the idea was to create federal agencies that were given lump sums by Congress and which then used a kind of internal peer review process to determine how to distribute these funds. There's a history of some political intrigue there (universities try to get their people into the federal agency so they can direct funds back to their home university, etc.).
This has avoided some of the usual sort of line-item Congressional pork activity, for example (left) Bernie Sanders got the F-35 engine factory for Vermont, and (right) Richard Shelby got the ULA rocket program for Alabama, etc. There have been some coordinated political attacks on federal agencies though, if you look into the history of the USGS, Congress basically said "stop doing environmental pollution research or we'll cut your funding" in the 1990s.
> "USGS data is considered so reliable and objective that it is often used for testimony during court hearings", Conomos said... "We do scientific studies and basic data collection, in some cases for 100 years or more. We know the history of streams and the environment nationwide. Private consultants don't do that."
The NSF is probably among the most independent agencies at present. NIH seems pretty tied up with the pharmaceutical sector, and FDA is even worse. DOE is just entirely captured by the nuclear waste and fossil fuel sector at this point. EPA and USGS, they're basically hamstrung.
To sum it up: Schmidt is making investments, and is trying influence the federal government to follow his footsteps. That's one way to pump massive life into your portfolio.
This is my experience. ES joined the board of my small company based on personal relationships and some reciprocity. To be fair though, I don’t think him being on the board has had any meaningful impact and he’s been very hands off.
Eric has more money than he ever imagined or his family could spend in many lifetimes.
He is genuinely interested in improved the application of S&T in everyday life and the government. He comes from a background of an industry executive, not academic or government.
Just to add some color to this: another billionare (Peter Thiel) played a more direct role in the Trump administration on Science (and especially) Health policy and appointments. Thiel was officially a Science Advisor to the transition team.
The chair of FAS, Gilman Louie, is also an associate of Schmidt’s who most recently served with him on the National Security Commission on Artificial Intelligence, which Schmidt chaired from 2018 to 2021.
> ... our leaders confront the classic dilemma of statecraft identified by Henry Kissinger: “When your scope for action is greatest, the knowledge on which you can base this action is always at a minimum. When your knowledge is greatest, the scope for action has often disappeared.” ... AI systems will also be used in the pursuit of power. We fear AI tools will be weapons of first resort in future conflicts. AI will not stay in the domain of superpowers or the realm of science fiction. AI is dual-use, often open-source, and diffusing rapidly. State adversaries are already using AI-enabled disinformation attacks to sow division in democracies and jar our sense of reality.
> “... it has become clear that one of blockchain’s greatest advantages – a lack of connection to the world outside itself – is also its biggest challenge,” Schmidt said. “I am excited to be helping the Chainlink Labs team build a world powered by truth.”
> “Without trusted price data to trigger smart contracts, it is impossible to build DeFi applications .. the rate at which Chainlink has been able to bring new market data onto blockchains has been the rate at which developers have been able to build exciting new DeFi apps,” said Sergey Nazarov, co-founder of Chainlink.
>The scope for action remains, but America’s room for maneuver is shrinking.
That quote carries the implication that "action" means massive regulatory actions and harsh export controls which are the only things that would become impossible if AGI became a major economic sector or integral to several of them.
Also financial regulation, including blackchain and CBDCs. If search engine rankings wield economic influence, imagine the influence of "trusted truth inputs" on a smart contract's IF clause to control a THEN transaction.
With Eric Schmidt, history would suggest you're being naive.
He was on the Apple board until giving Google's Android division NDAed designs for iPhones, at which point Android phones lost the trackball, yes, trackball, and went full touchscreen. He was subsequently removed from Apple's board.
I've just spent 5 minutes googling this claim. It seems totally unfounded. There are stories about how Google engineers, including Rubin, were nonplussed when Jobs first demoed the iphone, because they had no idea what was coming.
There are official explanations for Schmidt's departure from the Apple board that acknowledge the ios/android conflict but do not imply any malfeasance on his part. There are stories that Schmidt even left board meetings when iphone issues were discussed, precisely because of concerns about this.
I'm not saying you're wrong about this, but the evidence for such a claim isn't as obvious as I would expect if it was true.
The idea is simply preposterous. You think Steve Jobs, obsessive about secrecy, would let his main competitor Google CEO know about secret iPhone plans?
> The science office’s efforts to arrange for Schmidt Futures to pay the salaries of Lander’s staff sparked “significant” ethical concerns, given Schmidt’s financial interests in areas overlapping with OSTP’s responsibilities, according to the science office’s then-general counsel, Rachel Wallace
When a private individual gives funds to a government official to get what they want, that is called bribery.
All areas of the government are approximately equally corrupt. The FBI does not investigate every crime that deserves it. They pick and choose and will not move against those in power without sufficient political willpower to back them up.
For someone from outside the US this is an insane read. Private companies paying for government employee saleries? The government agencies even looking for private funding for employees? How can that not raise all sorts of crazy ethical alarm bells?!
To me it also illustrates why people should never be able to become this wealthy. If they really are interested in the government having adequate funding to pursue what is important they would pay adequate taxes (and push for tax reform so this affects everyone) and not use their wealth to push very specific agendas that that mix personal, financial interest with social agendas (which they probably say is their only interest). It destroys the whole notion of democracy. So even if they are only interested in the "good for the country" it is specifically not the good as determined by the democratic process. Instead their circumvent the democratic process (using the immense wealth) to push their own notion.
As a side note, why is the Biden administration deputy CTO a former lawyer?
"Private companies paying for government employee saleries? The government agencies even looking for private funding for employees? How can that not raise all sorts of crazy ethical alarm bells?!"
... I'm lost for words. The crazyness about this is not so much that they got money from Zuckerberg, but that they had to look for it! I'm showing my lack of knowledge about the US political system now, but did the founding fathers not provision somehow that the elections as the central element of the democratic process must have guaranteed adequate funding, without influence from any other government entity?
One thing is that elections are up to the states to organize as they see fit.
The other thing is that US politics has reached a point where the political parties care only about winning. They don't care about functioning institutions.
This is an aspect of liberalism not democracy. It seems paradoxical until you realize liberalism is anti-democratic. The original intent of liberalism was to protect the private interests of the land-owning class, who were and are a small minority, although now any minority can buy into the franchise. The majority is openly hated, and the resentments of the minority against the majority is cloaked in language about love and democracy.
The US is a republic of 50 states, a federal district (capital), and other territories. Otherwise known as a federation where states dictate their individual representation at the federation. States can do as they please from that regards, mostly.
> For someone from outside the US this is an insane read ... It destroys the whole notion of democracy. So even if they are only interested in the "good for the country" it is specifically not the good as determined by the democratic process. Instead they circumvent the democratic process (using the immense wealth) to push their own notion.
In fields where US tech industry precedent can influence non-US markets, there is the potential for even higher returns on lobbying investment.
Big tech is quickly turning into what the tobacco industry was in the 50s. At least tobacco kills people when they're older, whereas social media robs young people of their mental health while simultaneously threatening truth and democracy.
I would, but big tech is outpacing them in power and influence. Most people seemed to see Don’t Look Up as a warning about climate change, and it is, but I resonated far more strongly with its warning about Silicon Valley.
At least with cable everyone gets the opportunity to see what everyone else is watching. Content on social media feeds is made specifically for the person viewing it, who knows what dark rabbit holes the people you interact with on a daily basis are being led down? It used to be that we could construct a theory of mind for these individuals, you could even argue that it was a defining feature of our society enhancing social cohesion. Not even the worst of the cable news channels can lay claim to destroying that.
“For those of us who don't watch either of them, does anyone have a few examples of hate and conspiracy theories they have pushed?”
saddam was involved in 911, iraq has wmds, russiagate, syrian gas attacks, bengazi was caused by a youtube video, theres an epidemic law abiding black people being regularly executed by white cops for no reason, russias invasion of ukraine was unprovoked, jan6 event where there are videos of cops opening the doors and allowing people into the capital was worse than 911, etc
Sounds to me personally like all this talk of “AI and research” and foundations for all the “good” things are really a smoke screen for 5G investment and monopoly protection through political influence.
At the same time this isn’t this always a component of power? Political parties usually pursue financial support from companies in return for favorable conditions behind the scenes. Good that someone is blowing the whistle at least.
