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
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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.

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