(Bloomberg) -- With great fanfare last week, 44 attorneys general hit Google with two antitrust complaints, following a landmark lawsuit the Justice Department and 11 states lodged against the Alphabet Inc. unit in October.
What's less known is that Oracle Corp. spent years working behind the scenes to convince regulators and law enforcement agencies in Washington, more than 30 states, the European Union, Australia and at least three other countries to rein in Google's huge search-and-advertising business. Those efforts are paying off.
Officials in more than a dozen of the states that sued Google received what has been called Oracle’s “black box” presentation showing how Google tracks users’ personal information, said Ken Glueck, Oracle’s top Washington lobbyist and the architect of the company’s antitrust campaign against Google. Glueck outlined for Bloomberg the presentation, which often entails putting an Android phone inside a black briefcase to show how Google collects users’ location details — even when the phones aren’t in use — and confirmed the contours of the pressure campaign.
“I couldn’t be happier,” said Glueck about the barrage of lawsuits. “As far as I can tell, there are more states suing Google than there are states.”
Oracle has fallen behind the tech giants in the marketplace, yet is notching one legal and regulatory win after another against them, Google especially. While Google, Amazon.com Inc. and Microsoft Corp. have experienced double-digit revenue growth in recent years, Oracle’s annual sales have stayed relatively flat at just under $40 billion. Earnings last fiscal year totaled roughly $12.7 billion, a fraction of its rivals'.
Google spokesman José Castañeda decried what he labeled Oracle’s "cloak-and-dagger lobbying campaign.” He said “while Oracle describes itself as the biggest data broker on the planet, we're focused on keeping consumers' information safe and secure.”
In addressing the antitrust cases, Google countered in a blog post that it has improved search results in ways that many world regulators had previously deemed pro-competitive and keeps rolling out new features to better serve users. Google also said it only provides anonymized, aggregated location data to advertisers, not individual users' specific whereabouts, and that users can pause or delete their location history at any time.
The onslaught of antitrust challenges is hardly just Oracle’s doing. Government officials, academics, lawmakers and public-interest groups have agreed for some time that U.S. technology giants have gotten so big that they are squeezing out competition and dragging down economic growth. Oracle acted on those concerns early, even if largely out of self-interest.
When Glueck learned in 2018 that the Arizona attorney general was investigating Google’s privacy practices, he sent over a 70-page report alleging Google had “built an empire” by monetizing the personal information of millions of Americans without their knowledge, according to copies of the documents viewed by Bloomberg.
The document outlined in great detail how Google allegedly tracked Android cellphone users. In May, Arizona Attorney General Mark Brnovich sued Google for deceiving users about its collection of location data. The report was cited during a deposition in the case, said a person familiar with the matter. A Brnovich spokesman said the lawsuit was filed on its merits.
Castañeda said the Arizona case appears to mischaracterize Google’s services. “We have always built privacy features into our products and provided robust controls for location data,” he said.
Oracle also took a decade-long copyright dispute with Google all the way to the Supreme Court, which heard oral arguments in the case in October. A ruling, expected by mid-July, if favorable to Oracle could reap the company $9 billion in damages.
The Google grudge began in 2010 when Google copied Oracle-owned Java programming code to develop the Android operating system. Google argues the code was ineligible for copyright protection because it wasn’t an expressive work, like a novel or movie. Oracle contends that Google should’ve obtained a license to use the code.
The computer software company, which said last week that it’s moved its headquarters to Austin, Texas, from Redwood City, California, has developed a reputation for turning up the heat on its adversaries. It uses traditional government-relations methods — picking policy fights, briefing lawmakers, courting Capitol Hill staff. It’s also a master at stealth lobbying tactics, such as digging up dirt on competitors, disseminating opposition research and supporting dark-money groups that publicize negative findings about rivals.
“Setting fire to your opponents’ camp is a major part of the Washington practice now,” said William Kovacic, a George Washington University law professor and a former Federal Trade Commission chairman under President George W. Bush.
Oracle won some battles after fostering ties to President Donald Trump. Oracle Chief Executive Officer Safra Catz and Glueck were part of Trump’s transition team. Catz advised the president on trade policy and serves on the National Security Commission on Artificial Intelligence.
Those ties may have proven fruitful when Microsoft was in pole position to acquire the U.S. operations of TikTok, the popular video app that Trump ordered its Chinese owner to sell. When TikTok picked Oracle as its preferred partner, after a phone call with Executive Chairman Larry Ellison, the president backed Oracle’s last-minute bid for a minority stake in the app as part of a deal that’s pending approvals.
Oracle showed it plays hardball more than 20 years ago when it pushed for antitrust action against Microsoft. Oracle admitted it hired an investigative firm to uncover information on research groups that had written pro-Microsoft studies without revealing Microsoft’s financial backing. That firm tried to pay cleaning women to rifle through the trash of one of the groups.
More recently, the company targeted Amazon's front-runner status for a Pentagon cloud contract worth up to $10 billion over a decade. Oracle, knocked out of the bidding early on, challenged the project’s integrity in lawsuits alleging improper connections between Amazon and Defense Department officials overseeing the bid. The agency's inspector general later said the relationships didn't corrupt the contract. The deal ultimately went to Microsoft. Amazon has blamed the loss on Trump’s well-known animosity toward company founder Jeff Bezos in court filings.
Oracle began in 1977 as a database and software provider to businesses and governments, but was slow to make its programs available over the internet, giving an opening to Amazon and Microsoft to supply the fast-growing market for cloud-based technologies. In 2019, Oracle’s market share for cloud-based data centers was so small that research group Gartner lumped it into an “others” category of niche players. IDC Corp. this year ranked Oracle fourth for cloud software, behind Microsoft, Salesforce.com Inc. and SAP SE.
Oracle is trying to “avoid a scenario where they become obsolete,” said Chris Meserole, a fellow at the Brookings Institution in Washington. “They don’t seem to be confident that their technology alone can win that fight.”
Brookings has received funding from Amazon and Google, but not Oracle, Meserole said.
Most of Oracle’s campaigns against Google are run by Glueck, who said he started in Washington as a driver to Joe Lieberman, the former Democratic senator from Connecticut and 2000 vice-presidential candidate. Glueck now oversees a 10-person Washington policy shop that relies more on outside lawyers than lobbyists.
“We hire great people, do our homework and try to tell compelling narratives,” said Glueck.
The company hosts political and charitable receptions in a Capitol Hill townhouse and weighs in on tech policy issues including science education and cybersecurity. It spent $6.8 million on federal lobbying last year, far less than the $11.8 million Google spent or Amazon’s $16.1 million, disclosures show. Both Oracle and Google donate to policy shops and trade associations that help shape public opinion, but Google supports four times as many such groups as Oracle does.
Oracle disclosed that it funds dark-money outfits — those that don’t reveal funding sources — that help paint a negative picture of its rivals. It backed the Internet Accountability Project, which encourages lawmakers to rein in technology giants. Glueck said the company no longer supports the Google Transparency Project (recently renamed the Tech Transparency Project), which churns out critical reports on major technology firms, including Google. IAP declined to comment. TTP said it no longer accepts corporate money.
EU enforcers, which have investigated Google multiple times for anti-competitive practices and fined it almost $10 billion, were briefed by Oracle on Android and investigated a 2013 complaint from FairSearch, an anti-Google group Oracle supported. The bloc is now rolling out stricter rules that could slow down Google and other internet gatekeepers. Likewise, the Australian Competition and Consumer Commission, after getting a lengthy Oracle report, has filed two lawsuits challenging Google’s data-collection practices.
Oracle was one of the first companies to push Congress to adopt an anti-sex-trafficking measure in Congress, not because it was critical to its business but because Oracle knew it could hurt Google, according to a person familiar with the matter. The legislation weakened legal liability protections for tech companies such as Google from lawsuits over user-generated content in sex-trafficking cases.
In defending itself in the Arizona case, Google in August signaled its pique with Oracle by unmasking its adversary in court. Google asked a judge to block the attorney general from disclosing documents obtained in his inquiry, arguing that the court should rule in its favor in part because the initial probe had been encouraged by a longtime nemesis — Oracle.