Putting Crosshairs on the Succesful

Google is starting to discover that all its smug leftish do-gooder aura is not going to stop the government from trying to take it down merely for being successful.

Sens. Herb Kohl (D-Wis.) and Mike Lee (R-Utah), the top lawmakers on the Judiciary Committee's antitrust subpanel, are urging Federal Trade Commission (FTC) Chairman Jon Leibowitz to take a hard look at whether Google is engaging in anticompetitive business practices....

"Given the scope of Google's market share in general Internet search, a key question is whether Google is using its market power to steer users to its own web products or secondary services and discriminating against other websites with which it competes," the lawmakers wrote in a letter sent Monday.

Two quick thoughts

  1. Further proof that, long ago, anti-trust actions dropped any hint of being about the consumer and have become completely about protecting competitors with connections in Washington from getting their butts kicks by a stronger company.  Look at some of the last suits - Microsoft, now maybe Google - both are actually about stopping companies from offering consumers free stuff.
  2. Isn't Google being accused of doing exactly what, say, NBC does all the time?  NBC loses money on the Superbowl and the Olympics, but uses the huge audience to cross sell its other shows and offerings.


  1. joshv:

    Well Warren, one of the ways to gain market share, and thus monopoly, is to use profits from one area of the business to dump cheap product into another market. For example, back in the day when Netscape cost money, Microsoft was offering IE for free, using its massive OS and Office suite sales to subsidize IE's development and upkeep. That price point profoundly damaged Netscape, it just could not compete. Netscape offered their software for free to consumers because they had to, and then eventually died somewhere around version 4.x - ushering in an era of IE dominance that is only now beginning to wane as the browser becomes more commoditized and based on open standards that MS can't control.

    Was this software dumping beneficial to consumers? Maybe. They got a free browser, bought with money they paid for the OS and MSWord. Netscape on the other hand was starved of capital. Would could Netscape have done if a competitor weren't offering a similar product for free? Who knows.

  2. Steve S:

    Very good point about NBC. All media companies, broadcast, cable, print, satellite, and internet do the same thing. Google is just the nail-du-jour that's sticking up the most right now, and it must be hammered into 'compliance', or until it sees the light, and increases it's political donations to the right sort of political king maker. A friendly note, and a few checks for tens of thousands of dollars to the right people would make all this go away. Temporarily.

  3. Doug:

    yet, firefox and many other browers are available for free. and last I looked, Apple was in the upswing and Microsoft was not. Just let things be, sooner or later somone else will come along and change the game and offer a different product that everyone will want.

  4. Colin:

    That's REALLY disappointing from Mike Lee. Thought he was supposed to be one of the good guys?

  5. NL_:

    Even in Standard Oil, the prototypical antitrust case, prices to consumers went way down rather than up. And Standard didn't really have a monopoly; it was losing market share when they broke it up.

    Antitrust law allows the government to provide business support to the vendors and business customers of the affected business; without antitrust law, Congress can't extract donations and support for getting involved. Also, Congress hates the idea of powerful companies that don't pay proper obeisance to its power, and large companies are less interested in fighting for various interventions and tax cuts from Congress.

    I'm not really surprised that a Tea Party Senator like Mike Lee failed to apply small government principles consistently. But I'm still disappointed. Sure, I expect elected Tea Partiers to be anti-gay, anti-drug, anti-Muslim and anti-foreigner. But somehow I thought they might be a little less openly anti-market.

  6. Mark:

    @Josh - at the time of the Netscape deal Microsoft was brazen about stomping companies by incorporating their intellectual property into Windows. Doublestack was another company done in when Microsoft illegally used their compression patents in Windows - the company won the lawsuit, but with their market eliminated, went under. Dr Dos was anther company MS sought to destroy. When Windows 95 came out, it would give a false message saying that your Dos OS was incompatible with Win 95 and would produce unpredictable response, even though it was known that this is not true. Dr Dos ended up dying about 5 years earlier than it should have. Microsoft told symantec to give them their defragger, or else, symantec complied.

    MS wasn't exactly nice. And for all the, yeah eventually MS will ossify, lots of people with good ideas lost their shirts to to MS's "aggressiveness."

    That said. It is a tough decision to figure out what exactly belongs in an operating system and what should be separate. For instance there is Roxio disk burning software. Yeah you can buy it separately but shouldn't the current read/write software for storage devices be part of the OS itself, file management has traditionally been the domain of the OS - it was for Floppies and tapes, why not DVD's?

  7. Me:

    I would love to have my competitors forced to promote my business. Now where can I find a politician with loose morals?

  8. Not Sure:

    "Now where can I find a politician with loose morals?"

    Is this a trick question? ;)

  9. me:

    BS - IE was free, Netscape was free (yes, you could buy a version but you could also download the free version). Netscape pushed their browser to sell their server; not a new business model, but Netscape drowned themselves because their browser, quite frankly, like any older software product had started to reek.

    The monopoly lawsuit was about one thing - before it, MSFT had negligible lobbying contributions to the Washington powerbrokers. After, they started paying up like everyone else.

  10. joshv:

    Netscape was free only for non-commercial use. Corporations were required to buy the commercial version, and they did. But eventually even that version was free.

    "Netscape drowned themselves because their browser, quite frankly, like any older software product had started to reek"

    Imagine what they might have done had MS not forced them to give away their product for free?

  11. Mark:

    @Joshv, it is interesting that the brower market stagnated with IE6 for many years due to the lack of competition, it wasn't until about 3 years Firefox came out (after an aborted Mozilla browser) that MS started working again on a browser that was 10 years old. IE 7 was the biggest piece of junk too. The reason it took about 3 years, is that one of MS's strategies was to take open standards and put in their own proprietary hooks. They tried that with java and Sun sued them (saving Java by the way) but with IE 6 many companies got used to using the MS proprietary HTML/active X standards. It took several years and a lot of nerd pressure to get companies to use traditional HTML again. Even today I find web pages that do not work well in Firefox.

    Google has upped the competition a bit, with Chrome. That caused the Firefox folk to do updates faster.

    But the deal is both these browsers depend on corporate support - though FF does get some fundange from directing searches to Google.

  12. Mark:

    Another complaint about MS anticompetative practices. In the late 1990's there several different compiler/IDE vendors that made software development units for MS Windows. MS did their best to stifle all of them, but not publishing the complete windows API. MS used secret and hidden system calls that the other companies did not know about. Now there is pretty much Visual Studio.net, and no other competitors for windows programming.

    Note though that a lot of our activity has switched to the WWW, so MS is losing a bit of dominance here as well. But again, due to at best sneaky practices, Borland, Wacom, Metrowerks, lost their shirt - but were told by the likes of Rush Limbaugh that their problem is that they should just innovate more.

    I like how conservative types (I am conservative, but disagree with them on this one) were all for MS stealing everyone else's work, but when Disney was threatened with losing their copyright to Snow White, all of a sudden congress allowed them to re-up the copyright. You would think Disney should innovate too.

  13. me:

    Just for actual informations sake, have a look at http://www.nethistory.info/History%20of%20the%20Internet/browserwars.html

    They do a pretty good job summing up the history.

    Netscapes business model was to give away the browser for free and get paid for their server. (And yes, businesses could buy a version - but that never was a significant source of revenue). They started out with dominating the market - until faster, more standards compliant browsers became popular (IE/Firefox). Note that there was a customer benefit to these new browsers (they were better and promoted competition kept upping the standards to the great browsers we have access to today). Having competition on the browser side did not actually hurt Netscape one bit.

    What really killed them was the competition on the server side; Microsoft had started bundling a free web server with their server OS (now, *that* is something that the DOJ lawsuits could have been about - except MSFT never had a monopoly in the server market, that was Sun back in those days), but the fall of Netscape revenues was more directly correlated to another free product: The Apache web server. It was faster, more configurable and - above all - completely free.

    In retrospect, the Gilette model was a poor choice for this market (writing web servers is an easy task compared to writing browsers; giving away the hard-to-make product and charging for the simple-to-copy one is a bad move if the communication between both is mediated by standards).

  14. me:

    Also, I am amazed that people think to argue that it would have been better for consumers if one company had continued to tightly control the web based on 1994's notions of how the web ought to work. The productivity boost and enjoyment we all derive from the www is a direct consequence of multiple players competing hard for that space.

  15. wolfwalker:

    "Further proof that, long ago, anti-trust actions dropped any hint of being about the consumer and have become completely about protecting competitors with connections in Washington from getting their butts kicks by a stronger company."

    Huh? Antitrust law has never been about the consumer, except indirectly. It has always been about preventing large companies and corporate alliances from using unfair tactics to prevent competition. With its dominance of the Internet, Google is a classic example of a monopoly that has already demonstrated it will use unfair tactics to prevent competition. Watching Google for antitrust violations is just good sense.