In this episode, we look at the upcoming antitrust case against Google and anticompetitive behavior in the tech space. What has Google done to be called a monopoly and should governments be intervening in the market?
Google dominate mobile advertising, display advertising, small business analytics, email, file storage as well — it’s no secret that they are very anticompetitive. An obvious example is how Google behaved with their shopping listings: up until a few years ago, Google indexed their results fairly, and included them in the organic search results. Shoppers easily found the best deals, and competitive merchants enjoyed great visibility. Not so great for other shopping comparison engines, who struggled to maintain their traffic, and some of them, naturally, died. Suddenly, Google pulled the rug underneath everyone and rendering shopping results now paid only. Suddenly, users didn’t necessarily get the best deals at all — and businesses who couldn’t afford to pay (or wouldn’t pay), lost their visibility. In essence, they launched a free service to starve out competing shopping engines, and once complete, they made their service paid only: a fine example of predatory marketing.
The Google antitrust case is part of a larger, or at least, just as large of a problem, and that is Google’s way of generating content and servicing users. Google, the search engine, doesn’t have proprietary content. They trawl the Internet for content, index it, and serve it to users who come to Google and search for information. That’s not a problem on its own, at least not if done the way say the way a phone book sources information and displays it.
In the past, Google used to optimize their search performance to how little time is spent on their site — the faster someone leaves, the faster they found what they were looking for. Over the past few years, Google have started displaying more and more content on their own property. For instance, search for weather, song lyrics, news content, you name it — the content is now going to be displayed on the search result page. This is at the expense of the content creators — they get no visitors, ad revenue, even credit. Google takes all.
We take a look at the legislation that exists in the US, the Sherman Antitrust Act; passed in 1890. It is meant to give the government the power to break up companies, and it deals specifically with violation of antitrust as it pertains to monopolization. It has been criticized by libertarians, perhaps more by anarcho-capitalists, as anti-capitalist, but in fact, it’s the opposite. Monopolies prevent true capitalism, they stifle innovation, distort prices and keep prices above market-rate and they hinder competition.
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