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Antitrust

an anti-competitive squabble among net neutrality friends?

I had to grin when I saw that two of net neutrality top supporters of net neutrality, eBay and Craig Newmark of Craig's list are reportedly in an legal fight and Craigslist is actually accusing eBay of anti-competitive behavior

I have to point out two ironies here:

First, eBay has 95% share of the online auction market. Yep, like Google in Europe, eBay is well past the unofficial maarket share level of what it takes to be declared a monopoly.

  • It seems as if online unofficial monopolies like eBay are not above leveraging their market power in one market,online auctions, into an adjacent market like the classified ad market.

Second, it is both Craigslist and eBay, who are eviserating one side of the newspaper industry's two-sided business model (ads and subscriptions), while at the same time promoting net neutrality, which is a clever scheme by online monopolies like Google and eBay to effectively prevent broadband companies from evolving into a two-sided marketplace with  both subscriptions and advertising.

 Bottom line: It seems as if eBay defines anti-competitive as what others might do to eBay, not what eBay actually does to others. Ask Craig.    

How Googleopoly stacks up against Microsoft's Windows monopoly

A Silicon Insider post does a great job of building on Richard Waters FT point that Google's search business is increasingly rivaling the size of Microsoft's Windows monopoly.

It is getting harder and harder for Google to continue to pretend to be the little vulnerable upstart -- Google is now the dominant incumbent in search and increasingly the market power in online advertising.

The numbers in Silicon Insider's analysis are quite compelling.  

Must read: FT's "Google triumphant" -- it's an excellent analysis of why Google is dominating...

Kudos to Richard Waters of FT for his insightful analysis "Google triumphant."

Let me highlight some key takeaways:

  • The failure of the Microsoft/Yahoo merger eliminates the biggest short-term threat” to Google’s unrivalled position on the web, says David Yoffie, a professor at Harvard Business School. For now, its momentum “seems unstoppable”.

The article also provides excellent new detail to the thesis in my Googleopoly analysis and Senate testimony that Google's real dominance is as the dominant "market maker" for online advertising.

BBC News in Silicon Valley picks up on growing antitrust concern over Google-Yahoo pact

BBC News' Silicon Valley bureau is reporting on increasing "Alarm at Google-Yahoo partnering" and is highlighting a new letter to the DOJ Antitrust Division by 16 civil rights and rural advocacy bodies:

  • "In a letter to Assistant Attorney General Thomas Barnett, head of the Justice Department's anti-trust division, the coalition argues that such a deal would give Google almost 90% of the search advertising market and strengthen its influence over internet users' access to information.

    "We face a possible future in which no content could be seamlessly accessed without Google's permission," the letter states."

It appears others are noticing that Google's dominance of search, and online advertising threatens to control the monetization of all content on the Internet...

Last summer I wrote an op-ed for the Washington Times entitled: "The Ultimate Internet GateKeeper," which is what Google is quickly becoming...  

Has Google's dominance of search reached the tipping point asks American Consumer Institute

The American Consumer Intstitute just put out a good consumergram on: the DOJ investigation of the Google-Yahoo deal and asks if the search market has reached a tipping point.

  • The ACI consumergram is asking the right questions.
  • More entities should be, and will be, asking these types of questions going forward because the facts and Google's behavior will demand it.

As I explained in detail in my Googleopoly analysis, the search market has already tipped to Google and the Google-DoubleClick merger was a tipping point to enable Google to extend its market power in search advertising to display and online advertising as well.

As I explained the stakes of lax antitrust enforcement in my Senate Judiciary testimony:

"The Stakes of Lax Antitrust Enforcement: Will Google be enabled to become the:

“Online-advertising bottleneck provider” picking Internet content winners and losers?

Why EU's concerned with a Google-Yahoo pact -- Google is close to monopoly share in Europe

A Yahoo-Google search outsourcing pact arguably faces even more problems with European antitrust authorities than the reported U.S. DOJ antitrust investigation, for two reasons:

Google wins as Yahoo allowed Google to paint Yahoo into a corner that hurts Yahoo shareholders

Dominant #1 Google, in calling #2 Yahoo to discuss a slow competitive search surrender by Yahoo to Google, in order to thwart a purchase of Yahoo by #3 Microsoft, apparently succeeded.

Yahoo-Google's search outsourcing pact: the fine line between collaboration and collusion

Interested observers in the Microsoft-Yahoo-Google-AOL-Ask.com-MySpace incestuous soap opera called search advertising, would be wise to bone up on the fine line between acceptable industry collaboration and illegal collusion, if recent reports prove true.

  • The Wall Street Journal reports that Yahoo may be days away from announcing "an agreement to carry search advertisements from Google.." and that Google feels "that the upside is much greater than the potential downside" from the arrangement."  
  • The Financial Times broke the story that the Department of Justice was investigating Google's interaction with Yahoo and that "the prosecution of collusion is a top priority."     

The fine line between collaboration and collusion. 

First, while many may be aware that a Google-Yahoo outsourcing deal "would likely attract intense antitrust scrutiny" there is precious little analysis on this linchpin issue -- hence the genesis of this piece.

I believe the pattern of Google becoming the outsourced search engine for most all of the Internet -- save for a few properties -- is one of the most important and least understood competitive Internet issues.  

More evidence undermining Google's claim that net neutrality should not apply to Google

Only Google, which never met a self-serving, double-standard that it did not embrace, could overtly enter the business of selling network capacity and bandwidth to the public like broadband providers do, and still oppose net neutrality for themselves. (See my previous post where Google's Board recently recommended that shareholders vote against applying net neutrality to Google.)

On April 7th, Google had a press announcement: "Previewing Google App engine: run your apps on Google's infrastructure" (which was also picked up in a story by the Wall Street Journal). In that Google press annoucement, Google it made clear that it was going to sell network bandwidth to developers:

  • "The preview release of Google App Engine is limited to the first 10,000 developers that sign up, all of whom will be restricted to the free quota of 500MB of storage and enough CPU and network bandwidth to sustain around 5 million page views per month for a typical app. The preview phase is intended to gather feedback from developers. Eventually, developers will be able to purchase additional storage and bandwidth." [bold added]

Can any of the Google-defenders that regularly read this blog, and there are lots, please explain to me in a comment, how Google selling network capacity and network bandwidth to developers does not put Google clearly in the network or broadband business --competing directly with all the network providers, which Google has been lobbying furiously to apply network neutrality regulations to?

NPR on public libraries' concern over Google's aspiration for one world library of books

National Public Radio's All Things Considered" did a great 5 minute segment on: "Some Libraries Shun Google in Book Battle."

The story is set up as who should control the world's future virtual libraries as libraries and Google rush to digitize the world's books?

  • Several public libraries object to Google digitizing all their books and are doing it themselves.
  • They worry about a "single corporate entity" having so much power over the world's information.
  • If the old adage is true, that information is power, there is reason to worry.

I note this story because these libraries are a spontaneous and very real grass roots response to Google's megalomaniacal mission: to organize the world's information and make it universally available and useful."

  • These public library advocates worried out loud about how much more effective censorship could be if "a single corporate entity" controlled the world's main library and how would they respond to political pressure to ban a book or an author?

Google should take note. Here is a grass roots rebellion brewing from their left flank, which looks un-willing to be bought off by Google to go away. 

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Q&A One Pager Debunking Net Neutrality Myths