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TheStreet Open House

Google's a U.S. Asset in the Internet Wars

Stocks in this article: GOOGAAPLMSFT

NEW YORK ( TheStreet) -- As recently as a month ago I would not have believed Google (GOOG) could get out of its antitrust problems with just an agreement to do some things better, as Politico reports.

Google's violations of antitrust law were serious.

First, its use of patents obtained with Motorola Mobility was abusive. The Motorola patents dealt with essential mobile phone functions, licensed as part of standards under Fair, Reasonable And Non Discriminatory, or FRAND, terms.

Now, in courts around the world, the company has been demanding new, bigger royalties for these patents, trying to eliminate liability for its own violations of Apple's (AAPL) design patents. In doing this it was, in the view of critics like Florian Mueller of FOSSPatents , violating the basic comity underlying the setting of standards, and abusing its position.

Second, more important, its search results seem to be failing to find competitors' products of long-standing and finding, instead, newly created Google products.

Gary Reback, a noted anti-trust lawyer writing in USA Today , and Scott Cleland, who has made a living supporting the interests of the Bell companies on his own blog, compare Google to a crooked dealer at a poker game, hiding its tricks from public view inside a "black box."

This is the same thing that got Microsoft (MSFT) in so much trouble back in the 1990s. When you dominate a market, and you use that domination to seize control of other markets, that's illegal.

So how did Google get out of trouble, as Information Week expects? While final decisions will be announced early next year, writes ZDNet , I think the answer lies in three letters -- ITU.

The International Telecommunications Union is a United Nations agency that met this month in Dubai with the express intention of re-regulating the Internet. China and Russia, along with authoritarian governments of every stripe, submitted proposals, which Bloomberg reported on, that would basically put the Internet under local government control.

Local governments would be allowed to look at all data packets entering or leaving their citizens' devices, control what was said, and control what was read within their borders.

It's not like this isn't already happening, to an extent, but under this proposal it would all be sanctioned through a global entity. It would be legitimate under international law, and all efforts to get around such blocks would become illegal. Governments would control the routing of packets, and all defiance of local will would supposedly cease.

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