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

here we go again..

[pak9rabid]

Well well...I guess Democrats take bribe money from MS as well.

Re:here we go again..

[yog]

Who forces people to click on Google.com when they want to do a search? Last I checked, Internet Explorer which comes on every Windows computer defaults to MSN search until you specifically set it otherwise.

And who is losing money because of Google's size? Certainly not the consumer, who has benefited tremendously from Google's innovations, which are free.

Once upon a time, Yahoo Email charged an annual fee for POP3 and anything larger than a few megabytes of storage. Then Google came along and offered a free email with POP3 and huge storage and changed the whole game. Yahoo (and Hotmail) was forced to counter with added storage and reduced/eliminated fees. That's not monopolism, it's innovation!

I'm not scared by some dumb bureaucrat like Christina Varney. What's frightening is the apparent lack of appreciation by the Obama Administration for capitalism as a force for economic growth.

With a presidency that is socialist-leaning and big-government-oriented, it seems we are backsliding into a kind of pre-Reagan era where business is viewed as a necessary evil, the best and brightest should work for the Feds or community organizations, and we shouldn't even try to compete with our ultra-capitalistic competitors in East Asia and elsewhere.

Re:here we go again..

[Ethanol-fueled]

How about they try this exercise: Give Microsoft the advertising business and give Google the operating system business.

Everybody would win. Ballmer would finally have his petty revenge and stick his fingers in Google's pie, and we'll get an operating system with better interoperability and less(if any) DRM. I'd rather Google use their resources and their 20% time allowance to pet-projects to make a better operating system -- not to slap ads on my screen.

Advertising is generally evil and, in my opinion, Microsoft are much better than Google at being evil.

Re:here we go again..

[Abcd1234]

I'm not doubting that, I'm just commenting on Varney's comment regarding the issue. The way she addressed the issue (For me, Microsoft is so last century. They are not the problem...) suggests to me that someone at Microsoft put her up to it.

Or that maybe, just maybe, she's an independent thinker who believes (perhaps wrongly) Microsoft isn't a problem.

But the conspiracy theory is ever so much more exciting, isn't it?

Re:here we go again..

[Miamicanes]

> No, *that* is *specifically* opinion. Last I checked, there was no "adjudicated fact" that demonstrated
> that Microsoft's *current* actions, today, are resulting in an "ongoing downside for the industry and
> consumers". Only that their previous actions have done so.

Point of order... from what I remember, there were plenty of examples that Microsoft's conduct was financially devastating to its competitors (particularly Novell), but I seem to remember that the vast majority of examples given of alleged harm suffered by real consumers were largely fabricated and contrived. For every struggling poor person with no need of networking allegedly harmed by having to pay an alleged $2.17 more for a copy of Windows because networking was foisted upon him, there were several hundred or thousand consumers who owned 2 or more computers and had them all networked precisely because networking WAS free.

Step back for a moment and envision a world where just about everything related to Windows was a-la-carte. Hmmm, CD/DVD writing comes to mind as a particularly good example of an area where Microsoft -- paranoid of adding fuel to their accusers' fires -- bent over backwards to avoid encroaching into areas with commercial applications. The result was the optical media mess (specifically, UDF discs that were only partly compatible with those formatted/written by other drivers) that's just now starting to finally get sorted out. Now, suppose Microsoft had eliminated the really BIG barrier to entry (the actual disc writing) back in 1999 with Windows 2000 Pro and Windows ME, and exposed the whole API so anyone with a copy of Visual Basic could hack together a disc-writing app. Would it have devastated Ahead (Nero's maker)? Almost certainly. It would have beaten up Adaptec pretty badly, too. But actual consumers would be able to go online and download any of several thousand freeware apps hacked together to take advantage of the OS-level support for disc reading/writing the way they do NOW.

IMHO, the best thing Microsoft can do for real consumers is to sweep away the big, hard barriers to different kinds of apps (they have bargaining power with licensors that peons like you and I will never have, and even companies as big as Adobe and Corel occasionally find themselves getting snubbed by the Sonys, Samsungs, and Matsushitas of the world), make them free (to use) parts of Windows, and expose them all via public APIs so the rest of us can put them to good use.

Ditto, for browsers. Is there anyone who'll even TRY to argue that Netscape 4 didn't completely suck in every meaningful way possible compared to IE4? Opera was commercial, yet its standards support was no better than IE's -- and when you factor things like client-side XSLT, was pretty lame compared to IE. Opera's developers treated standards as limits rather than minimum goals, and probably did more to make normal users think standards were something that made web pages look ugly than anything Microsoft has ever done (by the way, I own and use Opera Mobile daily, and regard it as a "Must Have" app alongside S2U2 and Winterface for anyone with a touchscreen WM6 phone).

Of course, if someone manages to find a way to use Microsoft's official status as a convicted monopolist to make them sell a DRM-free edition of Windows 7, I just might start beating the war drums against them, too... ;-)

Re:That's scary

[SanityInAnarchy]

And yet, this is the woman who says Microsoft is "so last century". It's difficult to think of a market harder to enter than the desktop OS market, or the office productivity suite market.

Re:Monopoly on online advertising is the least of

[DrLang21]

Agreed. Sure Google is dominating the online advertising market, but maybe it's largely because their ads are not overtly obtrusive and are often relevant. I consciously refuse to click on ads I find annoying, but I've actually used Google ads to find obscure products that I am looking to buy.

Re:Foolish; absolutely foolish.

[bennomatic]

Wouldn't it be funny, though, if Google pre-empted this whole conversation by spinning off their advertising business into its own separate company, and then allowing other companies (i.e. MS and Yahoo) to bid on providing ads for the ad space on Google's site.

They could bill the Adsense for resources using the model that they have in the AppEngine service, and using historical Adsense revenue information, set a standard for how much they should be receiving from other ad systems.

Other ad vendors should be careful what they ask for. It may be that, with the volume of activity on Google's pages, they end up making Google much, much richer.

Re:But...

[Fjandr]

That's not the only way to look at it. Google could use their advertising clout to harm companies that rely on internet advertising in order to exert influence in that particular industry.

I'm not saying how likely it would be to occur, just that it's possible.

I don't see a huge likelihood of danger from Google based on their advertising monopoly. I do see potential dangers from a monoculture of reliance on Google's other services, much like the problems that have arisen from a Microsoft monoculture. Given that their power is derived from voluntary use of their (mostly) free products, antitrust law could be difficult to apply to their actions in many regards. If Google starts abusing their power, it will likely be a very unique case from a legal standpoint.

public financing

[bugi]

Some might say that Obama's campaign was publicly financed to a larger degree than any in recent memory. They got so many more contributions from individuals -- what's that if not publicly financed in spirit?

Re:Linux

[Anonymous Coward]

From TFSummary: "It may be time for the company to start adding to its legal staff."

That's funny, somehow I don't think Slashdot's response to a growing Microsoft monopoly would've been for them to just add more lawyers.

Re:But...

[sumdumass]

It shouldn't be about getting an ad campaign that is effective. The effectiveness is all up to the person running the campaign not the provider or media outlet. The only way I can see what your describing as being problematic is if Google charged disproportionately higher then similar services or refused to provide service or service at similar costs as your competitors.

The feeling or insinuation that someone needs to use a specific service or product to be effective isn't/shouldn't be in itself enough to show damage. Otherwise adobe and Microsoft should have been held accountable long ago for the government's reliance on PDFs and word DOCs. And yes, there are alternatives now, but that wasn't always the case. But this idea hasn't come to passing because ultimately, it's the users independent choice that put those formats into the positions they are/where in and as long as neither stopped competition when they did become the default standard, it shouldn't matter much.

As for the government going after Google, it won't happen. It's pure lip service and here is why. Google's Chief Executive Eric Schmidt actively supported Obama's election and actually pounded the campaign trail for him. Many other Google execs and employees have done the same. In fact, it has led people to speculate that Google will have a wide variety of payback options and for some reason, I don't think President Obama is going to let anyone take them out. I mean Obama has already given Google via it's YouTube site a no bid contract and control over public property with the government videos being hosted there and being locked by YouTube's terms of service instead of common law and the idea that government produced works are owned by the people and free to the people (let's hope that "lobbying" will get some of the public's rights back).

Yes, I don't expect anything to happen to Google at all. Lip service will be played but not much more then that. There won't be a trial (mainly because I don't believe there has been any harm) or anything of the sort because the administration owes Google too much. The change we can believe in is more or less not throwing their supporters under the bus like many other politicians do when it get's ugly surrounding them.