On antitrust, is Google the next Microsoft?

(continued from previous page)

Another parallel is that the anti-Microsoft campaign also was led by rivals who found it relatively cheap to put the screws to their competitor in Washington. Oracle and Sun Microsystems founded ProComp, which argued for a forcible breakup of the software giant, and Netscape lawyer Gary Reback pressured antitrust regulators to assail Redmond. Oracle even hired private detectives to snoop through the trash of Microsoft's allies in the nation's capital.

"People said Microsoft was the new AT&T," said Ari Schwartz of the Center for Democracy and Technology, which has received money from Microsoft, AT&T and Google. "There is certainly a lot more scrutiny of Google now that they are the No. 1 player in this space and are acquiring other companies. Part of competition means people targeting the biggest player out there."

To be sure, the sentiment that Google could become the new Microsoft is not universally shared. What got the software company into trouble in the 1990s "wasn't Microsoft pushing its products--it was Microsoft making it harder for rival products to come onto the market," said Robert Lande, an antitrust law professor at the University of Baltimore. "Is Google doing anything to make it harder for rival products (to come to market?)"

Instead of Microsoft being a dominant company with no real rivals, the marketplace today is more akin to a dominant company facing a formidable upstart, said Lande, who has provided informal guidance to congressional staff on this topic. "If you watch the Olympics, it's the old athlete getting challenged by the young athlete," he said. "That's why we like it and that's why we're fascinated."

David Evans, a consultant with the firm LECG hired by Microsoft, calculates that Google currently has a 27 percent share of the market for "publisher tools." But if combined with DoubleClick, Evans says, the company would command 78 percent of the publisher tools market. (But it all depends on definitions: If regulators view the relevant market differently--say, to include non-Internet forms of media--Google's market share would hardly be significant.)

Some analysts believe Google is encountering the same problem that Microsoft did when its own size and affluence begin to attract the attention of regulators. Political economists call it rent extraction, meaning payments that people and companies make to avoid being victimized by politically harmful measures.

George Mason University economics professor Richard Wagner says regulation and taxation are common forms of threatened political disfavor. An article (PDF) by Wagner likens rent extraction to a legalized form of extortion. "For ordinary people, these kinds of activity are wrong," he wrote. "But in politics they are business as usual."

"If anything gets too big and too interesting, the federal government says, 'We're supposed to be a part of this--we're the federal government, after all,'" said Jim Harper, a former Hill staffer who is the director of information policy studies at the free-market Cato Institute.

An awkward, arms-length alliance
One irony in the DoubleClick situation is that the same nonprofit groups that have been agitating for years against Microsoft and its alleged privacy misdeeds have now found themselves making common cause with Redmond against a political adversary.

The Electronic Privacy Information Center and the Center for Digital Democracy signed a joint complaint with the FTC against Microsoft's Passport service. The 2001 complaint charged that Passport in Windows XP will unfairly "profile, track, and monitor millions of Internet users."

Now EPIC and CDD are making the same complaint against Google. A complaint they and U.S. PIRG sent the FTC in April says "the proposed acquisition will create unique risks to privacy" to "more than 1.1 billion Internet users around the world."

Marc Rotenberg, EPIC's executive director, notes that his organization is independent and accepts no money from Microsoft. (An analysis performed by News.com last year shows its budget was $1.1 million in 2004 and receives money from the Ford Foundation and the Open Society Institute.)

In the past, EPIC has occasionally been able to cause technology companies nightmares by taking its case to the FTC. Its Passport complaint eventually led Microsoft to make sweeping changes. But the FTC dismissed a 2000 complaint against DoubleClick.

Microsoft has approached EPIC about meeting on the topic of Google and DoubleClick, but Rotenberg said he hasn't returned those phone calls. "They have the right to pursue what they're interested in," he said. "We're not part of any coalition with them."

Rotenberg said he rejected Google's request for a meeting to explain its position, too.

[s1kb0y]

Microsoft Punished?

Microsoft punished? When did this happen? The company should have been broken up into at least 4 or 5 companies. Today they can still afford huge loses (entertainment division) without breaking a sweat allowing them to break into any/all other markets they want to conquer and monopolize and still outweigh their competition banking on the gains from their Windows monopoly.

[hdubya]

This article is not about Microsoft

nt

[eurobloke]

Google should watch out.

Google is starting to realise that is becoming a monolith of its own making, and it starting to have its ass biting itself with the Department of Justice and an even more vicious opponent, the European Commission. The company with the slogan ?do no evil? is starting to become a fig leaf. I would be surprised if Commissioners Kuneva (consumer protection), Kroes (competition), Reding (information society and media) & Frattini (freedom, security and justice).

[eurobloke]

Re: Google should watch out

(Sorry I didn't finish)
Google is starting to realise that is becoming a monolith of its own making, and it starting to have its ass biting itself with the Department of Justice and an even more vicious opponent, the European Commission. The company with the slogan ?do no evil? is starting to become a fig leaf. I would be surprised if Commissioners Kuneva (consumer protection), Kroes (competition), Reding (information society and media) & Frattini (freedom, security and justice) have a good go at Google for various reasons including privacy breakdowns ie Gmail, causing monopolies with search and acting anti-competitively.

[adasha76]

Buying political influence?

From the article: "By comparison, last year AT&T wrote checks for at least $27 million to buy political influence and Microsoft spent $8.9 million."

What, is that supposed to be lauded? Are you saying Google is not corrupt enough? Ridiculous!

[declan00]

lauded

It's possible to describe a situation without saying it's good or bad, which is in fact what our article did.

We didn't say Google should buy political influence -- we just reported on it being outgunned.

If anything, we noted the public choice theory argument about rent extraction, so you should have taken away exactly the opposite conclusion. You may want to reread the article.

[KTLA_knew]

Diffrerent starting point

MS had zero footprint in DC, while their competitors had regular breakfast with the DOJ. They were completely unprepared.

Google is not, and certainly has learned from MS' mistakes. They will not be cuaght ignoring DC the way MS did until it was too late. (As noted in the article, MS has since realized that they needed to play the "games" its competiors had pulled to stay ompetitive, and has done so.)

Google will not get caught the same way, they will USE DC, not have it used against them.

[amigabill]

business as usual then

If USA government puts Google through the same antitrust process, then it'll be a minor annoyance during that time and then business as usual when any possible trial is over. Isn't that how things worked out for MS?

[bobby_brady]

I thought Google could do no wrong?!

I think Msft was the evil empire and Google was our dearly beloved.

[LuvThatCO2]

Silicon valley broght this on themselves

When all the losers like Sun, etc started going after Microsoft via legal channels when they realized they couldnt compete with MS by offering superior products, all they did was provide a little bit of room for the Camel - government regulators - to get his nose under the tent. Once government regulators get into an arena, they dont get out. I knew this was going to happen back when everybody was bashing MS for being a monopoly. I knew it'd come back to haunt all those companies jumping onto the MS break-up bandwagon.

[LuvThatCO2]

oops...

Thats 'brought' it on themselves :-)

[Renegade Knight]

Google Power vs. MicroSoft

If I wanted I could ignore Google almost entirely. A few adds would appear, but I don't need to use their applications to use my computer. I don't have to use their check out. Gmail has alternates.

Not so much with MicroSoft. They are harder to avoid. MS has no business testifying about Googles Monopoly Power. Yes Google has taken over big chunks of the internet and they are worth watching.

In the mean time. Google.com still works and Vista doesn't. I'm stuck with using Vista much more so than Googles search. Interesting how the larger monopoly has more issues with basic products.

[Turlingdrome]

Lucky you

"If I wanted I could ignore Google almost entirely. A few adds would appear, but I don't need to use their applications to use my computer. I don't have to use their check out. Gmail has alternates."

Thats true for a user, but not for an advertiser or web site owner. Google is fast becoming the only game in town.

[Llib Setag]

MS / DOJ antitust punishment for Google?

Google: Yes?
DOJ : Stick out your arm & roll up your sleeve.
Google : O.K....?
DOJ : Wrist up.
Google : OK
DOJ : "SLAP!!!!" Now you've been "punished just like Microsoft was in the past by us. Did that hurt?
Google : a little...
DOJ : "we'll take our millions in unmarked nonsequencial bills, thank you very much.
Google : OK"
DOJ : "What antitrust actions by Microsoft...errr...I mean Google...?"

[ralfthedog]

Data insulation

I see no problem with Google purchasing DoubleClick, as long as Google/DoubleClick data is kept segregated. Google and DoubleClick both have a great deal of information about us. If that data was integrated we would loose a great deal of our privacy.

[aabcdefghij987654321]

But what if...

Google decides to rank pages that include advertisements from Doubleclick higher than pages that use some other advertiser?

How will we know if they do that since they are so very secretive about how they rank pages already?

[aintnorainbowdorothy]

Google and DoubleClick

I don't use Google for anything. I definitely want my privacy protected. If they combine with DoubleClick, which is pervasive in the online ad business, then they will possibly have information on other companies search business, and other areas also. The merger shouldn't be allowed. Let Google continue trying to dominate the world, ignoring their motto, and DoubleClick do its' thing.

[technewsjunkie]

Hogwash. They are completely different companies

Google's founders have integrity, Microsoft's don't.

Google is BIG, yes. That's where the competitive approach ends.

[JuggerNaut]

Google versus Microsoft!

Well if I had my choice on who should be the monopoly powerhouse of the world wide web going forward, I'd choose Google over Microsoft any day. Google's approach is open and platform agnostic whereas Microsoft's is closed and Windows-only, which impedes real choice in the market (versus the perceived choice people are brainwashed into thinking Microsoft somehow delivers real choice to the market)!

So uh, yeah, go Google :-)

[Rusty Digital Marketing]

In Microsoft's Dreams!

Google is in a far better situation than Microsoft ever was. It has a commanding position in an industry - advertising - that evolves but cannot be eliminated. Business will always spend megabucks on advertising, and Google has a killer business model to extract profits from this business.

Despite the hoo-har advertising is nothing to Microsoft - it is barely 5% of Microsoft's revenues. Microsoft's problem is that it is operating in a mature business area with many, many alternatives for what it produces - many of which are free.

Microsoft's efforts so far in the advertising world reflect it's background as a product company who is not so great at marketing.

More at:

www.digitalmarketing.us/blog/

[The_Decider]

Google definitely does evil

But how are they manipulating market forces, even close to what Microsoft has done?

Google became the most used search engine through merit. Microsoft never became market leaders through merit.

Google isn't forcing their software on others, nor are they forcing anyone to use their software exclusively.

No way in hell that I would ever use their spyware, I mean desktop apps and email. But to even compare them to Microsoft is foolish.

[bearded_oneder]

"Google is seriously outgunned in Washington" ...

... "By comparison, last year AT&T wrote checks for at least $27 million to buy political influence and Microsoft spent $8.9 million."

Huh?

More importantly, shouldn't we really be questioning the constitutionality of "buying political influence" to begin with, along with the threat that this poses to free enterprise and democracy?