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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."
Correct. A monopoly position is not illegal. Using it to punish competitors or as a means of compliance is.
Google should be watched for abuse of their monopoly power in advertising, but so far I don't think there is any existing evidence to show abuse.
We have yet another person obtaining a position of power after displaying evidence of prior bias, but that's just how politics work. Fortunately, Google has the resources to vigorously defend themselves against spurious charges of monopoly abuse. Unfortunately, Google has the resources to vigorously defend themselves against non-spurious charges of monopoly abuse.
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.
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.
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.
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.
The enemies of Democracy are
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.
Stop Global Warming!
Just say no to irreversible processes!
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!
No evidence of abuse, eh? I'll bet he did a Google search to look for the evidence...
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.