Google to face antitrust wrath?

21 07 2009

Not my usual type of post this, but I have been reading quite a bit on this subject and thought I would have to share…

Christine Varney is head of the Justice Department’s antitrust division in the US, and was an attorney who represented Netscape in the late 1990s in a case where she painted Bill Gates and Microsoft as an overeager bully. So why the title of “Google to face antitrust wrath” for this post?

Well back in June 2008, Christine spoke at a conference about online law and antitrust. She stated that the technology industry was coming under the sway of a dominant behemoth, one that had the potential to stifle innovation and squash its competitors. The last time such words were used, Microsoft found itself at the centre of an aggressive antitrust case. Varney continued stating that Microsoft was not the problem, “I think we are going to continually see a problem, potentially with Google” she said. Instead of dominating the desktop, Varney said “Google was starting to colonize the emerging cloud-computing industry, amassing enormous market power and potentially creating an ecosystem that customers would be powerless to escape”.

On May 11th, this year, Varney made it clear that her stance on the subject hadn’t changed, indicating that Google may well be in her sights, letting it be known that she plans to take a forceful stance on the countries antitrust laws. “In the past, the antitrust division was a leader in its enforcement efforts in technology industries, and I believe we will take this mantle again”.

For me, this is clear intent that Google will be at the centre of some antitrust investigations, and to be honest, I am not surprised. For some time, Microsoft has been seen as the “bad guy” in the IT world, facing constant investigations and rulings, most recently issues within the EU regarding shipping IE8 with Windows 7. While Microsoft has been seeing the inside of the court room, Google has escaped such aggressive antitrust investigations.

Google is an angel?

Well this is what Google wants you to think. For far too long now, people have been spun the tale of two guys (Larry Page and Segey Brin) founding the company, providing free services to all, so that they may enjoy the web and find just what they want on it. People love this idea of two guys showing the way in technology, it’s a bit David and Goliath with Microsoft often getting painted as Goliath…However, let’s remember this company is now a massive organisation, and Larry and Segey aren’t at the helm any longer. In the past their two favourite words when questioned about the company’s activities have been “Trust us”. For me, that just doesn’t cut it….

Advertisers have been worried about Google’s market share for some time, and in the past three years, have seen Google’s market share of advertising raise from 50% to a massive 75%. Google has already attracted antitrust review regarding its plans to acquire online ad firm DoubleClick. In addition Google is now under investigation regarding its book-scanning project and the Federal Trade Commission are looking into whether the Apple board seats held by Google CEO Eric Schmidt and board member Arthur Levinson violate federal antitrust law. On the latter point I do hope some action is taken. I personally feel that Google has exploited some of the ideas of Apple, and has for sure made a move into core Apple markets (Google Phone vs iPhone; Chrome Browser vs Safari browser; Apple Mac OS vs Google Chrome OS)

For me, looking at the Google machine from the outside, it does appear that Google wants to dominate everything we do on the web, and more importantly want us to move away from the desktop and use the web for actual computing and storage. This is the reason behind such projects as Google Docs, gmail, Chrome browser and of course, Google Chrome OS. Google know the more of their products we use, the more of our habits they can trace, and the more they can sell this information to advertisers, bumping up their revenue. I am always concerned with Google trying to track our habits online, and by using more and more of their software end users provide them with exactly what they want, more ways in tracking our habits and information.

Any Conclusion…

Well the only conclusions I have come to is that Google (like any business) wants to grow as large as it possibly can, and is no longer the angelic organisation it may have once been. Google are using their massive market share of the search engine marketplace to try and dominate the web and the way in which we interact with it. I have no doubt this is having effects on smaller companies and is stifling innovation. Some may argue that it promotes competition; however I just don’t see any competition in place. Giving away free software, becuase you can afford it, means that smaller organisations just cannot compete. If they cannot make money from their ideas, designs, innovation and plain old hard development work, then how can they compete?

To be honest, I am sure that Google rightfully will be at the centre of some antitrust investigations, the question is, how soon…

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