Google Antitrust Violations

Posted by on February 19, 2009 at 9:03 am.

google monopolyA recent truemor about Google’s antitrust risk under the Obama administration raises what could become the most important technology topic of Obama’s administration.  That may sound melodramatic, but as all citizens and businesses grow more dependent upon the internet so too does Google’s power grow to impact the lives and livelihoods of the world. It doesn’t hurt that Obama’s pick to head antitrust, Christine Varney, considers Microsoft “so last century” and Google a monopoly.

Just today, B2B search engine TradeComet.com has filed suit against Google, accusing them of violating antitrust laws.  I’m not sure this is the suit that seals the deal, but TradeComet claims:
“With no notice, Google changed from cheerleader to tyrant when it realized we were a competitive threat,” said TradeComet founder and chief executive 

“For example, Google raised my prices by 10,000 percent, which strangled our business, virtually overnight,” he said. “As a result of Google flexing its monopolistic muscle, SourceTool.com currently averages about one percent of the traffic it previously had and is no longer a competitively viable business.”

Google responded with a now-familiar claim:

“the advertising market in which Google operates is highly competitive, and advertisers have a huge range of choice”

That response has worked before, but won’t for much longer.  You see, by pointing at the broad advertising market, Google tries to hide the fact that it also operates in the search and search advertising markets; both markets in which Google’s monopoly power grows daily.  That’s analogous to 1990s Microsoft claiming they operated in the highly competitive “software” market, to distract from their monopoly in the “operating system” market which they used to stifle competition in browsers and other related markets.
The real competition is for searchers and search advertisers — two areas where Google wields monopoly power.  Google has taken multiple actions against companies, webmasters and individuals trying to reach searchers and search advertisers that Google controls.  Often Google claims such actions are necessary to maintain “search quality”, just as 1990s Microsoft claimed that bundling software delivered a better quality end-user experience — the government didn’t buy it.  Those claims will also break down for Google — particularly because much of the targeted competition delivers exactly what searchers are looking for, relevant sites, undermining “search quality” as an excuse.  It also doesn’t help Google’s case that their actions are taken in such secrecy, with many competitors left wondering what happened and why and searchers often oblivious to their loss of choices.
I can’t predict when the antitrust charges will stick or what the remedy will be (breakup, new biz practices, mandated transparency), but they will.  I’m not a big fan of antitrust rules generally, but I do believe everyone should play by the same rules — even if they are major donors to Obama.  It’s only fitting that Google play by the same rules that allowed them to reach their dominance — if Microsoft had been allowed to dictate browsers and search destinations instead of fighting antitrust regulators, Google would just be another funny word today…

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