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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."
First post!
Last I checked, Google isn't forcing vendors into signing Google-only contracts to bundle only Google software with new computers.
Google's ability to combine search data from maps, Google Earth, Web Search, Google News Alerts, etc, and mine it is a much bigger problem.
Only if it is abused, no?
Light travels faster than sound. This is why some people appear bright until you hear them speak.........
Hey, Verne, know what I mean.
/fisheye-lens
There is no right to feel safe thru security vaudeville at the expense of everyone's freedom, privacy and tax money.
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?
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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...
I thought that having a monopoly was legal, but that protecting it via illegal means was not. What, exactly, has Google done to illegally protect the alleged monopoly?
Also, it's hard to see how they create a barrier to entry in the market. Any idiot can set up an online advertising agency and start making deals (and many idiots have done precisely that).
Forgive me, but I completely fail to see how Google could be considered a monopoly. They offer services that are supported by their advertising revenue.
They collect information about you, yes - we all know this may be evil.
But anti-competitive? AFAIK, their only source of revenue is their advertising business. Are they under-selling ad pricing? My gut feeling is that their services exposure is such that people would probably pay some premium to advertise with Google versus other sites.
Unless my understanding is completely off-base, it almost sounds like you can become a monopoly to this person simply by being better at what you do.
For me, Microsoft is so last century. They are not the problem.
I don't know about you, but my father uses Windows. My mother uses Windows, except for an old machine I've set up for her music library on Linux. My brother uses Windows. His friends all use Windows. Most of my friends use Windows, except the few who have Macs -- and those run Windows in a VM.
Even I use Windows -- VM or dual boot.
I've finally reached a point in my life where I don't have to touch Windows more than once a week, unless I want to play a game. And yet, I still can't design web apps the way I want -- I still have to either force everyone to download Firefox, or spend around 10% extra development time supporting Internet Explorer. (And I can't develop IE-only, or I don't have Firebug.)
If you don't see Microsoft as a problem, you aren't looking. If you see them as "so last century", it's because you let them get away with it last century!
I'm not going to defend Google, but that statement is dangerous thinking. Just because everyone forgot about the problem doesn't mean it's gone.
Don't thank God, thank a doctor!
Google's ability to combine search data from maps, Google Earth, Web Search, Google News Alerts, etc, and mine it is a much bigger problem.
Why? Because they've built a better mousetrap, and now people want to use it?
Google isn't even close to being a monopoly. I'm not a slobbering fanboy of Google the way some other people are, but I also fail to see a business boogeyman behind every corner as some people do. Some people's concept of "anti-trust" would be more correctly called "anti-success"... this notion that a company that's been very successful must have cheated or done something nefarious to get that way.
Life is hard, and the world is cruel
... abusing your monopoly is. I read the article hoping to see some indication of how Google is keeping other competitors down or acting against the public good; didn't find it. My conclusion: not yet an issue.
...it's when companies start abusing their monopoly that watchdogs should (potentially) step in.
Microsoft has had a few clear cases where it abused its monopoly. Google? I am not so sure, though of course any monopoly bears keeping a close eye on.
If construction was anything like programming, an incorrectly fitted lock would bring down the entire building...
Assuming they're a monopoly for online search advertising, in what way are they either abusive, or even able to abuse their monopoly status? With Microsoft, the monopoly is/was harmful to the marketplace of ideas because they wrestled to own and exploit shared standards, used bundling agreements and legal manipulation to hinder competition, and so on.
Even assuming Google could be considered a relative monopoly, if they were to use most of the problematic parts of that monopoly status, another company could just swoop in to replace them. Their power lies in their perceived results and goodwill with their large user base, rather than just being the only choice for most people.
I'm not normally a libertarian philosopher, but it seems to me this is one of the truest cases where the marketplace really can sort things out almost completely.
Ryan Fenton
Its hard to not sound like a fan boy of google, but I'm currently not understanding why google would be considered as a monopoly, but if I was to play devil's advocate here I might argue the following:
I don't agree with these, but some could argue (if you really didn't like google anyway).
Pete/Petri "damn, my chainsaw is clogged with 1's and 0's again." --clyde
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.
I see the glass as full with a FoS of 2.
I associate a monopoly with crappy service/no communication with customers, overpriced products and a lack of innovation or change. So I'm finding Google's version of a monopoly quite refreshing.
Wait a minute, are you saying that anti-trust lawyers that might, at some point in the future, end up working for the FTC should refuse to express an opinion of any kind about any company that may or may not be the subject of future regulatory action in a job they do not yet have and may never have? (Yes, that is a long sentence.)
You know, this kind of attitude might be something of a problem when it comes to Supreme Court Justices. Since we kind of expect Justices to have actually written legal papers expressing opinions of various kinds (as lawyers, and maybe judges), written opinions, and represented clients, at some point before they join the Supreme Court.
People are allowed to have, (and express in a public forum), opinions before they are government employees. Certainly those views can be brought up and considered during confirmation hearings, but having and expressing an opinion does not disqualify somebody from appointment to an executive branch position.
Indeed, since they are appointed positions, all but the most extreme people completely unfit for office are supposed to be confirmed, no matter which side of the political spectrum they are on.
SirWired
Having a monopoly (in legal terms) is not, as many have pointed out, illegal, but it does constrain your behavior somewhat, and it does mean that the Justice Dept is probably going to want to keep an eye on you. I don't see anything in TFA suggesting that Google is going to be prosecuted--merely that they're going to be scrutinized, and frankly I think that's a good thing. I'm more worried about the suggestion that Microsoft is no longer a problem.
Intel and Cisco have both also been judged to have monopolies in their respective fields, but unlike Microsoft, they've (mostly) played by the rules, and haven't ended up in serious trouble. Doesn't mean the Justice Dept won't continue to keep an eye on them, though. I have no problem with Google being lumped in with Intel and Cisco. On the other hand, I don't want them lumped in with Microsoft until someone finds evidence of similar anti-competitive behavior. On the gripping hand, if evidence of anti-competitive behavior is found, I want them prosecuted, but I'm not holding my breath waiting for that day.
Microsoft was anti-trust defense for losers. If the original judge was not such a completely bone-headed moron, MS would have lost, and lost badly. Gates made a complete fool of himself on tape, Boises (sp?) walked all over their lawyers, and the judge seemed to enjoy them twisting in the wind. The only thing that saved them was a change in administrations.
IBM, when accused of anti-trust, they built an in-house team larger than most law firms, and then dragged out the case so long, the judge in charge of the proceedings literally died before the case could be concluded.
SirWired
Google has many competitors, Microsoft being a major one but certainly not the only one. I doubt there is any foul play going on. Keep in mind that Google is a company, and a big one at that. They have a lot of monopolistic advantages. Whether or not they abused them is in the eye of the beholder, but they certainly have a hold on many different parts of the tech industry.
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. Either that, or she is one of the most clueless people the Obama administration has to offer.
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.
it's = "it is"; its = possessive. E.g., it's flapping its wings.
It was a little tough to glean from TFA (let alone TFS), but what she actually seems to be saying is that Google is positioning itself to acquire the same type of monopoly on cloud computing that MS has in the OS space. Seems like a valid concern, and as long as all she's arguing for is increased scrutiny as enterprises move more and more to cloud computing, I can't really see an issue with it. It also explains the comment about MS being "so last century" - as companies move to cloud computing (assuming they really do), the OS should become less important.
Perhaps, but it's just as likely that Google isn't playing like they want them to, which may include not offering (the party) a bribe, which politicians have become a custom to (in all parties)
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!
Good, inexpensive web hosting
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.
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.
And exactly how did they get that hold? Cuban derided anyone who might want to buy Youtube.com. Google made it work. Google has taken billions of pictures of the planet and shared them with everyone. Google 'mashups' are plentiful and some incredibly useful. Despite Google's very large footprint on the Internet and how it is used, what harm has come from their activities? What good?
Until someone can show that Google has harmed competition with their advantages, there is nothing to argue about. They got that hold by being useful and free (mostly) and helpful. Google has quite literally begun setting the standards for others to follow. That they did not follow quickly enough is not Google's fault.
We, the consumers, share some of the guilt. We should have demanded of our service and content providers that they do what Google has. Wait a minute, scratch that. Our service and content providers should have listened... never mind.
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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?
Okay, I can't take someone seriously who uses teen-speak. What is she? 16?
Behold your government.
By your logic, cherry picking a timeline to suit an argument is ok. Microsoft may have grown to a point - based on their abilities and success, but then they started abusing their monopoly to maintain/expand upon it.
As a brief example, I don't see Google removing competitors from search results nor making gmail non-compliant with other hosts. Sorry, but no.
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?
Democrats just want to destroy companies
Google's online ads market share: as 59.2%
Microsoft Window's market share:89.62%
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.
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Just say no to irreversible processes!
Many people would disagree with your assessment of Microsoft making a better product than the other guys at any point in history, even if you weren't wildly extrapolating from DesScorp's statement.
The real problem is that an operating system locks you into using it far more than anything Google's done so far--a problem which isn't Microsoft-specific. At this point, it'd be far easier for me to move cross-country than change my OS. Once a lot of people are in a similar position and have major incentives to use the same OS as everyone else, it's difficult NOT to be an abusive monopoly.
Or that maybe, just maybe, she's an independent thinker who believes (perhaps wrongly) Microsoft isn't a problem.
GP already said "Either that, or she is one of the most clueless people the Obama administration has to offer."
Cluelessness and wrongly believing things are kinda the same thing here...
-Forrest Cameranesi, Geek of all Trades
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If they are looking for a company that hods a monopoly in advertising, they should look somewhere else
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.
Stop Global Warming!
Just say no to irreversible processes!
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. Either that, or she is one of the most clueless people the Obama administration has to offer.
Bear in mind, now, that Varney was involved in the US vs. MS case some years ago - as a Netscape lawyer. Although she's worked with Microsoft under more positive circumstances (in the context of her pushing for standards in online privacy), I have trouble seeing her as an MS puppet.
I'm not saying she's perfect, but I think she's one of the good guys.
And... honestly, I agree with her, just a little. Microsoft has become a bloated, nearly ineffective, and arrogant bureaucracy. They may still play dirty, and may still try to strongarm, but their leverage is dwindling as they accumulate resentment from consumers and lose market share.
I'm not saying they're irrelevant; that's obviously not the case. They bear watching, and I sincerely hope Varney isn't as dismissive of them as her quote implies. I think she isn't; she isn't stupid.
Google, on the other hand, is still (usually) playing nice, but has gained incredible influence; the company's name is a household word (literally; the verb "google" is in Merriam-Webster). Any company with that much power bears close scrutiny: a culture shift or a few poor decisions could easily lead to misuse of their dominance.
But in Libertarianworld all the competitors would have to do would be to make a better product and suddenly everyone would abandon the multi-billion dollar investment they have in Windows and Office and live happily ever after.
Except some libertarians do not support Intellectual Property and Microsoft is built on IP.
Should there be a Law?
Get out of my dreams!!!
Property is theft.
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.
Parity: What to do when the weekend comes.
Where's the fine line between successful strategy and abuse? It seems to be the point at which it becomes popular to hate a company.
Let's look at the sins of which Microsoft has been accused.
If I'm not mistaken, one criticism is that it's taking advantage of having huge stockpiles of money, in order to "dump" its products at low cost into markets to gain control. Well, Google's playing that same game, more successfully. They've put out a ton of software at *no* cost, in order to promote their company. That's taking advantage of a large size, at least. And it's hard to get mad at them for it, because their free products are actually good.
The other act that's coming to mind is bundling - using large share in one market to gain an advantage in another (operating systems and browsers... which don't even seem like that far a stretch from each other, imho). Is this all that different from what Google is doing when Gmail serves up Google's own advertisements? Their tremendous resources let them built a wildly popular webmail product, and which in turn increases the scale of their booming advertising business. Once again, nobody is really bothered by this, because we (seemingly) all use Gmail, willingly.
Despite the lovefest shielding their public image, Google's monopoly surely does have "victims". Even if they don't directly piss off consumers, they must have driven out more then a few competitors from the advertising market. And the ad-supported webmail market. And anything else they've touched.
I've never liked Microsoft, but I've never liked the antitrust claims against them either. Google's actions are awesome, and Microsoft's are evil, and I'm not sure why. I certainly hope there's more to it than the popularity contest.
> 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... ;-)
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.
Let me guess where you heard that -- Rush Limbaugh? John McCain? Get a grip on yourself, man; if Obama was "socialist-leaning," how the hell did he get support from Goldman Sachs, Microsoft, Google, Citigroup, Morgan Stanley, and other capitalist corporations? How did he get endorsements from such well-known millionaire capitalists as Warren Buffett, Hilary Rosen, Craig Newmark, David Geffen, etc.? How about Ben Bernanke? Or Brink Lindsey of CATO?? Do you really believe any of these people would endorse a "socialist"??
Here's an idea then.. Don't use fucking google! How hard is that? Or better, use Tor. God you people whine like little baby girls.
I've never liked Microsoft, but I've never liked the antitrust claims against them either. Google's actions are awesome, and Microsoft's are evil, and I'm not sure why. I certainly hope there's more to it than the popularity contest.
One company leveraged their dominant product directly to push a secondary product that might otherwise have been supplanted in favor of a rival. The other created a product so superior to everything on an already saturated market that they outstipped the competition on sheer technical prowess alone. One company put something free into a product that everyone had to pay for to coexist technologically. The other put their money-making product into a free offering that was among a huge field of other free offerings. Microsoft can subsidize products with their massive revenues, but for them to gain the traction that they do requires that they be incorporated into the one product that many people have to have: their operating system. Google can subsidize their products with their massive advertising revenue, but can't actually tie their products to the purchase of ad space. They still have to rely on technical superiority for adoption. If nobody has a reason to use it (i.e. Chrome), they don't have a customer base that they can foist it off on by unnecessarily tying it to a product many people need. That their advertising revenues benefit from ad placement in their free products attests to the popularity of the product rather than to the tying between it and the advertising. Gmail is a delivery channel for advertising, but had to be compelling in some way to encourage users to voluntarily sign up for the advertising channel over Yahoo! Mail or MS Live (among others in the field).
On first blush, Google and Microsoft can be compared readily. They are dominant in their fields. When you get past that, however, the ways they achieved (and used) their dominance are nearly polar opposites.
I'm not a huge fan of either of them. One is useful but otherwise unremarkable aside from sheer popularity, one is barely tolerated out of necessity. For many people it probably is a knee-jerk popularity contest, but that's to be expected since the vast majority of people have no reason to consider the issue any deeper than what they garner from passing comments and opinions of others.
Wow. I see you have arrived on our planet full of piss and vinegar and ready to support your political heroes full bore. That's great, I'm happy for your new found success.
Oh wait, this is about Obama's new Anti-trust chief going ape on a search engine that happens to have sponsored links clearly separate from the results, and a successful advertising model that doesn't annoy the user. Not the opinions of a 20-something who not only didn't live through the Hoover era, but who also didn't live through the Reagan era, but knows all sorts of incorrect things about them. In fact, said 20-something received all of his/her opinions in something resembling a benediction from high school teachers and *maybe* university professors.
He now reflects those spoon-fed half-baked ideas back onto the world like the ignoramus he is, having never run a real business, having never had to raise a family, or do any real-life task. Fitting that he should support a politician who thinks no one should be doing any of those things.
The brains of a chicken, coupled with the claws of two eagles, may well hatch the eggs of our destruction.
I've found their ads to be the least annoying on the internet. The reason I find their ads the least annoying is because 9 times out of 10 they only have text and no irritating graphics or flash crap.
Really? I find them to be incredibly annoying since they're so well tailored to my personal interests that I might actually be inclined to....click on them.
Scary shit indeed.
People replying to my sig annoy me. That's why I change it all the time.