Is Google too big? In the United States, Google has cornered 64% of the search market, which leaves just 36% for the competition. This is a far cry from the nearly 100% market share that AT&T enjoyed in the United States telephone industry in the 1970’s. AT&T’s dominance led to the landmark antitrust case United States v. AT&T which saw the breakup of the telecommunincation giant’s operations. The case is historically viewed as a success, and long distance telephone calls indeed became cheaper in the newly competitive market. Should governments put Google under similar scrutiny?
President Barack Obama has indicated that his administration will be looking much more closely at anti-competitive behavior than the previous administration did. Some of this can be attributed to politics — Republicans tend to give Big Business the benefit of the doubt while Democrats are not typically so inclined. But the administration’s statements seem to go beyond the typical partisan rhetoric (President Obama promised to strengthen anti-trust measures, especially for large dominant companies), that sound like Google to you?
Here are just a few of things that the U.S. Justice Department has already, or will be looking into:
- with 64% of the search market, has Google left enough of the pie for a viable competitor to emerge?
- an advertising partnership with Yahoo had to be scrapped last year after the Justice Department threatened to file a complaint. A Google/Yahoo alliance would have controlled 85% of the search advertising market!
- Google’s recent agreement with authors and publishers to scan books and offer search results is being investigated as possibly anti-competitive.
- Google has 2 seats on Apple’s board of directors who possibly have conflicts of interests due to the fact that the two companies are competing in several arenas (both offer web browsers, operating systems for mobile phones, and other similar products and services).
- Last month, Google announced a new service called Google Profiles which allows users to create a profile complete with links and photos that will be displayed when someone does a Google search of their name. The service will have a distinct competitive advantage over the likes of Facebook and MySpace whose results are displayed as any normal search wouild be.
But, all these things do not amount to much if in the end they do not hurt the consumer. This is what the new administration is looking to find out. While the USA under George Bush tended to look the other way except in the most egregious situations, President Obama wants to emulate the Europeans who have successfully prosecuted Microsoft for similar offenses. Let’s hope that whatever the outcome, the consumer prevails.
What do you think?
(1) Is Google too big? Is 64% of the internet search market too much for any one company?
(2) Do you prefer a laissez faire or pro-active approach to anti-trust investigation and enforcement?
(3) Are there any monopolies in your country that you would like to see broken up? (Telefonica anyone??)