Diller: An Increasingly Vertical Google Will Face Litigation

Concerned that Google is putting its proprietary content above others, which is not a problem so long as there are search options

By John Eggerton -- Broadcasting & Cable, 2/13/2012 12:59:16 PM

Barry Diller, chairman of Internet company IAC, said Monday that if Google continues on its current track of vertical integration and search dominance, he expects there will be private, and perhaps public, litigation to restrain it.

He also took aim at concentrated media -- as a general said IAC would be coming out this week with a new broadcast technology that could break the hegemony of MVPD media control, but did not elaborate.

Diller, former top Fox, Paramount and ABC exec was speaking at the Flatirons broadband policy conference a the University of Colorado Monday, where he weighed in on a host of topics from online privacy protection: He doesn't see a big need for regs; media concentration: MVPDs will have to give up their hegemony over content, but not without "blood in the streets"; and piracy: the Studios "stupidly" and grandly overplayed their hand.

IAC once owned expedia.com and opposed Google's purchase of ITA, the online airline search software company. Diller said that he is concerned that Google is putting its proprietary content above others, which is not a problem so long as there are search options. And there are, he added. But he said if Google continues on its current path of vertical integration and increasing search dominance, they will "hit a rock" in terms of either private litigation or government action to restrain them.

Diller said while he once opposed the financial interest and syndication rules as too restrictive and essentially irrelevant, he said that as the cable and broadcast industry became more consolidated, that became an argument for "sensible regulation."

He took aim at TV stations, suggesting they had come to take their license as an entitlement, rather than the balance of public interest obligations -- he mentioned the fairness doctrine for one -- for a free license that had been the historic, and he thought good, quid pro quo.

Diller said that these days, a cable operator wants ownership of an idea as a quid pro quo for carriage -- a model from which he says they do not deviate -- and that they want to be able to kick you out entirely starting year two, which he said was unhealthy.

Diller said he thought the Internet, so long as it remains open, will probably take care of breaking up that "hegemony," but he also said the studios would "not go gentle into that good night."

He suggested an example of programmers pushing back against the democratization of programming the Internet affords was the programmers "lockstep" opposition to the Stop Online Protection Act antipiracy bill. The studios pushed hard for that legislation, but Google and other Web interests were able to stop its momentum and essentially kill it despite initial bipartisan support in Congress.

Diller suggested that the studios' were blinded by their control-the-media model and were living in a world of unreality. Diller said he had debated the bill with News Corp. Chairman Rupert Murdoch, who said the bill would pass. Diller joked that it had about as much chance of passing as Murdoch did, who he said was going to live forever.

Diller did not say there should be no piracy legislation, though he did say he thought the problem in the U.S. was not big, and particularly not in video.

He told his Flatirons audience that there were already rules on the books, but that more in terms of internationally piracy -- the focus of SOPA -- was needed. He said that should have come from tech folks in a room, not the overreach of studios.

Diller is not a big backer of the government weighing in with legislation on online privacy protections. He said that there were different, lowered, expectations of privacy, particularly among young people. He even suggested the Fox network might have helped lower that threshold, saying that reality TV had an impact on privacy expectations.

Diller said that targeted advertising based on preferences was generally a good -- as in pro-social thing -- that there are currently ways to protect online privacy "fairly absolutely," and that he did not think the dangers of invasion of privacy outweigh "a wonderful process" that was in general good for people.