Google’s ‘Monopoly,’ And The Case Against It, Looks Surprisingly Like Standard Oil’s
Via Daily Caller, American Thinker
Based on some novel ideas and the application of new and powerful technologies, a company is formed which, within a relatively short period, achieves a dominant position in the markets in which it operates. Many of these markets did not exist prior to the company’s creation.
It achieves this dominance by relentless innovation and passing along the bulk of the benefits of its discoveries to customers. And although competitors are ubiquitous and themselves formidable, the government alleges that the company’s dominance was obtained illegally and represents an attempt to monopolize what would otherwise be a competitive environment. The government seeks, among other things, to break up the company, advantage its competitors and restore the palliative effects of textbook competition.
United States of America (plus eleven states) v. Google LLC? Perhaps. But another example comes to mind.
In 1870, John D. Rockefeller established the Standard Oil Company to take advantage of recent discoveries in oil drilling and innovations in petroleum refining to produce kerosene, which at the time was used principally for illumination. Shortly after starting, Standard Oil had a four percent market share selling kerosene for 26 cents per gallon. Over the next ten years Standard Oil went on an innovation binge in which it increased the sale of byproducts it obtained from kerosene production.... creating over 300 products from each barrel of oil.
Standard Oil also pursued dramatic cost cutting. The costs of refining a gallon of kerosene fell by nearly 85 percent for Standard Oil from 1870 to 1885 while its share of the kerosene market grew to nearly 90 percent.
Standard Oil’s dominant position was obtained through relentless innovation that resulted in tremendous efficiencies and the creation of new markets that benefitted a multitude of consumers. Nonetheless, and after years of litigation, in 1911 the government succeeded in breaking up Standard Oil into 34 separate companies by claiming that Standard Oil’s low prices were predatory and intended to monopolize the market.
There is little evidence that the government’s remedy benefited consumers . .. many of the companies created by the breakup later reconstituted within ExxonMobil.
And interestingly, owing to its failure to take advantage of the Texas oil boom and its reluctance to switch from kerosene to gasoline production, Standard Oil’s market share of refined petroleum products had dropped to approximately 65 percent by the eve of the Supreme Court’s decision. Someone forgot to tell its competitors that Standard Oil had monopolized the market.
Google finds itself in much the same position as Standard Oil at the turn of the twentieth century. A remarkably creative and innovative company, Google invented the modern search engine. Google processes roughly 90 percent of search inquiries in the U.S. and around the world. Its Chrome product constitutes roughly 70 percent of the global online browser market while it’s Android operating system is found on about 85 percent of all smartphones.
Google claims that its dominance is based on its overall excellence and user-friendly approach...
These practices, it is argued, keep competitors from gaining a foothold in the search business.
And somehow the outcome of U.S. v. Google seems predictable and familiar. The legal battle will continue for years under the shadow of a more general discussion of how best to further regulate the communications and technology industries. Google will lose and have to change some of its behaviors and spin off some of the ancillary properties it has acquired or developed to support its digital advertising commerce. Full Article By Thomas W. Gilligan @ Daily Caller
The United States of America v. Google
On October 20, the Department of Justice (DoJ) filed a long overdue antitrust lawsuit against search engine giant Google.
According to a DoJ press release, "[a]s one of the wealthiest companies on the planet with a market value of $1 trillion, Google is the monopoly gatekeeper to the internet for billions of users and countless advertisers worldwide. For years, Google has accounted for almost 90 percent of all search queries in the United States and has used anticompetitive tactics to maintain and extend its monopolies in search and search advertising."
Google was founded in 1998, when internet search engines were just getting their feet planted. Back then, now-defunct websites such as Ask Jeeves, Lycos, and Infoseek were the big players in the rough-and-tumble world of the internet search engine.
In just over two decades, Google has trounced its would-be competitors and now reigns supreme. It is difficult to fathom that 90 percent of internet searches performed in the United States are executed via Google. No wonder "google" has become a verb in our modern lexicon.
The sheer dominance of Google when it comes to accessing information on the internet is cause for concern.
As Attorney General Bill Barr said, "[t]oday, millions of Americans rely on the Internet and online platforms for their daily lives. Competition in this industry is vitally important, which is why today's challenge against Google — the gatekeeper of the Internet — for violating antitrust laws is a monumental case both for the Department of Justice and for the American people."
Barr is correct: this is a big deal for the American people. For far too long, "We the people" have allowed Google to attain way too much power and influence over American society.
By controlling 90 percent of the internet search market, we are at the mercy of Google's secret algorithms when it comes to accessing and attaining information. No single company should have the power that Google currently wields over the dissemination of information.Moreover, according to the lawsuit, Google has not become the search engine Goliath through free and fair competition. Actually, Google has gained and entrenched its power by disobeying the law.
As alleged in the Complaint, Google has entered into a series of exclusionary agreements that collectively lock up the primary avenues through which users access search engines, and thus the internet, by requiring that Google be set as the preset default general search engine on billions of mobile devices and computers worldwide and, in many cases, prohibiting preinstallation of a competitor[.] ... These and other anticompetitive practices harm competition and consumers, reducing the ability of innovative new companies to develop, compete, and discipline Google's behavior.
In other words, for the vast majority of devices that connect one to the internet, Google is the one and only option for searching and surfing the web. That is not a good thing, by definition. . . . Full Article By Chris Talgo @ American Thinker