Obama Anti-Trust Chief on Google the Monopoly Threat

CWmike writes "The blogosphere regularly excoriates Microsoft for being a monopoly, but Google may be in the cross-hairs of the nation's next anti-trust chief for monopolistic behavior, writes Preston Gralla. Last June, Christine A. Varney, President Obama's nominee to be the next antitrust chief, warned that Google already had a monopoly in online advertising. 'For me, Microsoft is so last century. They are not the problem,' Varney said at a June 19 panel discussion sponsored by the American Antitrust Institute, according to a Bloomberg report. The US economy will 'continually see a problem — potentially with Google' because it already 'has acquired a monopoly in Internet online advertising.' Varney has yet to be confirmed as antitrust chief, and she said all this before she was nominated. Still, it spells potentially bad news for Google. It may be time for the company to start adding to its legal staff."

Comments

Foolish; absolutely foolish.

[Azh Nazg]

Christine seems to think that Google is a monopoly in the world of online advertising -- that much, I find no fault with. However, thinking that they need antitrust actions seems just foolish to me. Sure, they may be a monopoly, but they have yet to actually abuse this monopoly. Since the purpose of antitrust laws is to avert the abuse of monopolies, surely it would be a far better use of the court's time to go after those who continue to abuse their monopolies, such as Microsoft and cable and phone companies?

Re:Foolish; absolutely foolish.

[Chris Burke]

However, thinking that they need antitrust actions seems just foolish to me. Sure, they may be a monopoly, but they have yet to actually abuse this monopoly.

Um yeah, but I don't see where she actually said that anti-trust is required now.

BTW, here's a link to the original bloomberg article that this blog entry quotes from.

She says she thinks Google acquired their monopoly legally, but is concerned about what happens when cloud computing takes off. Okay, she uses an unqualified future tense when she says "there will be companies that will begin to allege that Google is discriminating", but that still sounds more like a prediction to me than a promise of action. If that happens, anti-trust investigation may in fact be warranted, and I see no indication that she's saying she would pursue anti-trust against Google anyway if it doesn't.

Seriously, what's the issue with having an anti-trust chief who is aware of and intends to keep an eye on potential future problems? If regulators had been keeping a closer eye on Microsoft, then maybe U.S. vs Microsoft would have happened early enough to actually make a difference.

That's scary

[__aagmrb7289]

Does she not know what a monopoly is? Or is she ignorant about online advertising?

The existence of a very high market share does not always mean consumers are paying excessive prices since the threat of new entrants to the market can restrain a high-market-share firm's price increases. Competition law does not make merely having a monopoly illegal, but rather abusing the power a monopoly may confer, for instance through exclusionary practices.

First it is necessary to determine whether a firm is dominant, or whether it behaves "to an appreciable extent independently of its competitors, customers and ultimately of its consumer."[7] As with collusive conduct, market shares are determined with reference to the particular market in which the firm and product in question is sold.

There almost no barrier to entry to advertising on the internet - the costs are negligible. And I've yet to hear how Google is using its leverage to stifle competition and/or gouge its customers. Maybe it IS, but I've yet to hear anything about it...

Re:Obama, determined to destroy any company.

[techno-vampire]

Which is why they outspent the Democrats in the recent election.

Oh, wait, the Republicans were the ones who kept their pledge to use only public financing. It was the Democrats who broke their word as soon as they realized that they could buy the election if they refused government funds. Never mind!

Re:Monopoly on online advertising is the least of

[Abcd1234]

Dude, companies like Experian and Acxiom have been mining your every credit card and club card purchase, among many other things (they can even tell you if a given person's current vehicle lease is about to expire), for *years*. If you're really worried about Google, I hate to break it to you, but you're a little late to the game.

So last century...

[jav1231]

Okay, I can't take someone seriously who uses teen-speak. What is she? 16?

Behold your government.

Re:Monopoly on online advertising is the least of

[Chosen Reject]

Google's search market share: 23.7%
Google's online ads market share: as 59.2%
Microsoft Window's market share:89.62%

By your logic Microsoft is not a monopoly either.

I don't know what the GP's threshold for monopoly status is, but it's apparent he thinks it's more than 59% market share. You are the one with faulty logic to then reason that because he doesn't think 59% is enough that he must not think 89% is enough.

Re:Monopoly on online advertising is the least of

[Chosen Reject]

And I have faulty logic because I got those mixed up. 23.7% is their online ad market share. 59.2% is their search share.

Re:But...

[YerTalkingKrap]

Well, strictly speaking, Google does have a clause which states that you cannot use the advertising services of another provider while you are showing Google Ads (you are allowed to host ads yourself, but not from another 3rd party provider). While this may SEEM predatory, I think this is pretty much the norm - back in the day when I used banner exchanges, they had the same rule. So really, if the government is going to go after Google for that, then it would probably have to be an industry change.

Re:here we go again..

[starfishsystems]

Independent thinker, meaning that her thinking is independent of reality?

Factual record: Microsoft was found under law in the United States and the EU to have abused its monopoly to unfairly exclude competition. It is still doing so. Remedies are still being sought. The ongoing downside for the industry and consumers is huge. This is not personal opinion but adjudicated fact.

Interesting speculation: Some day Google might become a problem.