Google: The Next Microsoft (As in, Target of Federal Antitrust Enforcers)

More on the hideous return of antitrust (a matter blogged about by Matt Welch here back in July) via a Wired magazine profile on Obama's antitrust chief Christine Varney:

Christine Varney....a partner at Hogan & Hartson and one of the country's foremost experts in online law, was speaking at the ninth annual conference of the American Antitrust Institute, a gathering of top monopoly attorneys and economists... Varney....did not hide her message behind legalese or euphemism. The technology industry, she said, was coming under the sway of a dominant behemoth, one that had the potential to stifle innovation and squash its competitors. The last time the government saw a threat like this—Microsoft in the 1990s—it launched an aggressive antitrust case. But by the time of this conference, mid-June 2008, a new offender had emerged. "For me, Microsoft is so last century," Varney said. "They are not the problem. I think we are going to continually see a problem, potentially, with Google."

....Varney was suggesting that Google was repeating Microsoft's expansionist behavior. Instead of dominating the desktop, Varney said, Google was starting to colonize the emerging cloud-computing industry, amassing "enormous market power" and potentially creating an ecosystem that customers would be powerless to escape. She acknowledged that her remarks might ruffle some feathers at Google headquarters in Mountain View, California. "If any of my colleagues or friends from Google are here," she said, "I invite you to jump up and scream and yell at me."

Nobody took her up on that offer. But it is safe to assume that plenty of Googlers were jumping and screaming six months later when President Obama appointed Varney head of the Justice Department's antitrust division, making her the government's most powerful antimonopoly prosecutor. On May 11, during her first public speech on the job, Varney made it clear that her stance had not changed much since her presentation at the conference: She planned to take a forceful approach to applying the nation's antitrust laws. "In the past, the antitrust division was a leader in its enforcement efforts in technology industries, and I believe we will take this mantle again," she said. She did not mention Google by name, but there was little doubt to whom she was referring.

I first raised the alarm about Varney in my April American Conservative cover story on Obama as the mighty Octopotus.

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  • Ben Kenobi||

    I'm glad she's saving us from the tyranny of a free search engine, free email, free online docs and an online ad system popular with both companies and website hosters alike. And a free IM service.

  • ||

    So wait, bing.com, Yahoo Mail, MapQuest, etc. don't count as competition?

  • ||

    Ask.com? Wolfram Alpha?

    Ten years ago, I was using Alta Vista.

  • ||

    You might want to check out sortuv.com too. It's an interesting engine. I had a chat with the CEO a few weeks ago but he was very close-mouthed about the technology, obviously.

  • ||

    What precipitated the dot com crash? Could the action against MS have had anything to do with it? That was nuts, too, and appears to have been driven my other companies, not by consumers.

  • Cal Lipigian||

    Episarch,

    bing.com doesn't count, because it's not a search engine--it's a decision engine!

  • hmm||

    I guess Google should have out done M$ in contributions.

    Looks like that might have been money better spent on feeding unicorns and developing some sort of rainbow generator.

  • ||

    Someday in the next decade or so Google might actually figure out how to make money on something other than search.

    How ruthless of them!

  • hmm||

    They already started distancing themselves from each other. You will see people moving off each others boards to try and appease the giant ape that is antitrust.

    They will probably put on a good show too. Some public bickering, a lawsuit or two, and so on.

  • ||

    i've never really bought the whole anti-trust thing. there's something dubious about the government having to intervene because prices are too low and the company is being run well.
    then i remember that government hates competition and it makes perfect sense.

  • ||

    Yeah, this topic will really stir the Ditto-Dildos up - especially since Page, Sergy, and E. Schmidt are all already on the Obama Info bandwagon....

  • ||

    What precipitated the dot com crash? Could the action against MS have had anything to do with it? That was nuts, too, and appears to have been driven my other companies, not by consumers.

    Yes. It had everything to do with it. The most severe ruling was handed down on April 3, 2000.

    See the ten year NASDAQ chart. See that peak to the left at 4500, the one that has never been regained? Yep. That's March 2000.

  • Ben Kenobi||

    Good thing those Google guys donated so much to Obama.

  • Narcissist Hour||

    Nipplemancer | August 6, 2009, 9:50pm | #

    i've never really bought the whole anti-trust thing.


    Really, Nipplemeister? This "thing" been around since 1890. Happy to have you aboard.

  • ||

    Good thing those Google guys donated so much to Obama.

    Well, they did. "Conservatism" now means WILLFUL IGNORANCE and science/intellectual types don't cooton to that Bushpig Bullshit.

  • shrike||

    We need a mature discussion about values in this country...

    Not a bunch of Southern Rednecks braying about a police state!

  • ||

    it didn't make sense then and it still doesn't make any sense now. cutting down the guy doing the best at his job just because he's better than everyone else is rather pointless.
    standard oil was the only oil company around that was worth a damn. then they broke it up, and a century later we're down to only a handful of companies that provide oil.
    ma bell, broken up in the eighties is reconstituting itself and making more money now than ever, only it's called Verizon now.
    so tell me what's the point? aside from demonizing success and pointing out to other companies that they too should not get too big or else the government will knock them down.

  • ¢||

    Someday in the next decade or so Google might actually figure out how to make money on something other than search.

    They don't make money from that.

    They're an ad-serving company, like doubleclick (if they didn't buy them already). The rest is bogus brand imaging.

  • ||

    I have always interpreted the "too big to fail" as an indictment on success. This is just more of the same. I am trying to remember back to my anti-trust class... I can't think of what theory they might have.

  • ||

    I did a Google image search on Christine Varney and didn't find any porn! 8-{

  • ||

    is there any jim varney porn?

  • Seward||

    The irony regarding Standard Oil was that by the time the SC decided it needed to be broken up it had already lost roughly 1/3 of its market share.

    Anyway, anti-trust law is complete and utter non-sense.

  • Mike Laursen||

    there's something dubious about the government having to intervene because prices are too low and the company is being run well.

    Especially since all the business practices you've been engaging in to become successful were perfectly legal until **poof** one day you go into the office and you are suddenly engaging in illegal activity. But the government might not tell you they think you made that little crossover in legal status until years later.

    It's not exactly ex post facto, but just as unfair.

  • Mike Laursen||

    The irony regarding Standard Oil was that by the time the SC decided it needed to be broken up it had already lost roughly 1/3 of its market share.

    Yup, when the anti-trust folks start sniffing around a company it's often a sign that they're well on their way to becoming yesterday's news.

  • ||

    But doesn't Sergey Brin force all you guys to use Google at gunpoint like he does me?

  • hmm||

    We need a mature discussion about my values in this country...

    Fixed for ya, since you don't like those dirty rednecks and clearly only your values matter.



    It's all fun and games until your progressive pocket candidate turns on you.

  • D.R.M.||

    Fuck Google.

    Bush and McCain were no prizes. But there's bad and then there's worse. If you're running a big business, and you're idiotic enough to actively finance the party that openly uses "big business" as a synonym for "evil", you deserve all the shit that can be dumped on your head by a government run by that party.

  • Anonymous||

    D.R.M., while it seems counterintuitive if you take them at their word, it makes sense given that it's the party that's most likely to be in bed with prototypical robber barons, a result of corruption, lack of principles, and nearly a century of Brave-New-World-style "progressivism". In other words, Leftists are steering the Democrat ship and they left water quite a while ago.

  • Rhywun||

    I don't know anything about anti-trust law, but I do know that Microsoft is not in the habit of putting out a "better" product--because they don't have to. All they have to do is put out a product that's minimally good enough to run the software that people are familiar with and that's readily available and most importantly, interoperates with the software that's already out there. This is different from, say, cars. Nobody buys a Ford because it needs to interoperate with other Fords.

  • My eyes are dead to me||

    CharlesWT | August 6, 2009, 11:43pm | #
    I did a Google image search on Christine Varney and didn't find any porn! 8-{


    Consider yourself lucky.

  • Mike Laursen||

    All they have to do is put out a product that's minimally good enough...

    Very true, if this were ten years ago. They had that option for a while. It's eroded quite a bit, and will erode more and more.

  • Mike Laursen||

    But doesn't Sergey Brin force all you guys to use Google at gunpoint like he does me?

    The closest they've come to forcing me to use Google at gunpoint was giving me a free dinner and a t-shirt. I gotta say I felt totally coerced by their corporate control over my life.

  • ||

    They don't make money from that.

    They're an ad-serving company, like doubleclick (if they didn't buy them already). The rest is bogus brand imaging.


    Google most definitely does make money from search. In particular, their main business model is sponsored links on ordinary Google searches, and their secondary business model is to place search-based hit lists on others' websites, giving those others a cut of the revenue.

    Their DoubleClick-style revenue comes in a distant third, if that. After all, Google bought DoubleClick. It wasn't the other way around.

  • EoT||

    The only field THE GOOGLE really dominates is search. Search isn't an area where it's really possible to abuse market power. Yahoo! once dominated search but THE GOOGLE soared ahead because they had a better algorithm. There is nothing preventing anyone from outdoing THE GOOGLE and leapfrogging them like they did Yahoo and Microsoft search/Live Search/Bing.

  • Ebeneezer Scrooge||

    I don't know anything about anti-trust law, but I do know that Microsoft is not in the habit of putting out a "better" product--because they don't have to.

    I wondered if anybody but me was thinking this......MS puts out crap and has for a decade.

    How much functionality does the current version of Office provide today -- that you actually use, and that it didn't give you in '97? For most people the answer ranges from "not much" to "nothing at all". A clear case of the beast needing to be fed.

    But the true believers will nay-say all of this. And around here we've got some really serious true believers.


    And what's the deal with shuffling the damned command interfaces around every time they release a new version? That is absolutely, completely unnecessary, and is a waste of economic resources for the end customers. I'd love to see somebody file a class action lawsuit against MS for wasting productivity by unnecessarily stirring up the whole command interface.

    Microsoft may not be able to literally force anyone to use their software, but get real. If you have to use a computer today, you're going to have a really hard time getting around the necessity of using MS products somewhere along the line. It *is* borderline coercive, if not actually.


    I'm a long way from advocating "government solutions" to any of this. But there are software companies that really need to get their nuts knocked on for a while. You know, just enough to really get their attention.

  • ||

    Even assuming Google is a monopoly and also that monopolies on non essential goods are bad..... it is free right? What would they be protecting consumers from? Great product at no charge into?

  • Ebeneezer Scrooge||

    Anyone who thinks MS writes software with nothing but the sweet desires of You the Consumer in mind, has been living on Mars for a decade.

    MS's primary focus is corporate and government IT departments. Because they know that if they can sell (or coerce*) the IT groups, then we the individual end users will pretty much have to go along with the next software release.

    MS aims to avoid pissing off the end users just enough, that the end users don't jump up in open revolt.

    *Which they do, by phasing out support on the last release (where "support" means: MS fixes the f***ups in their own products).


    The government can't fix this. But the free market sure as hell isn't giving us the best possible products here.....

    Although, if our government was a) benevolent, which it isn't, and b) actually cared about competition, which it doesn't -- there is something Uncle Sam could do, to open up competition.

    The government and its various contractors make up a huge fraction of the market. If the government required that all word processing, spreadsheet, and presentation files conformed to a defined, open source format, that could make it possible for serious MS Office competition to come on the market. It could help cut costs in a hundred ways.

    In the interest of minimizing costs, the government could also specify that the software it uses, and its contractors as well, must not impose unnecessary retraining requirements on employees. I.E. cut the BS with mixing up the menus. The vast majority of the time, there's no reason new software releases have to be any more complex than going from DOS 3 to DOS 4 was.

    But if it was that easy, companies like MS wouldn't make nearly as much on training as they do today.

  • KingShamus||

    Nothing like feeding the hand that bites you.

  • Art-P.O.G.||

    Nothing like feeding the hand that bites you.

    Might as well funnel money to the Libertarian Party. Srsly.

  • ||

    Because they know that if they can sell (or coerce*) the IT groups, then we the individual end users will pretty much have to go along with the next software release.

    Nah, not really. Consumers have adopted Vista in fairly large numbers (even while complaining about it) as they have bought new machines, while corporate IT have dragged their feet and generally still insist on XP. Consumers will certainly take up Windows 7 when it's released, but will IT? Probably only when/if MS forces the transition by finally ending support for XP.

    In general, the IT departments I'm familiar with are conservative and slow-moving in validating and moving to new versions -- but consumers don't need no stinkin' validation, they just buy the latest.

  • Tricky Prickears ||

    I think when you have one company (Google) controlling such a large amount of the information, it should at least throw up a red flag. We already know Google got into bed with the Chinese government. Who's to say they won't with the US government, if they haven't already. In this country it's nearly impossible to separate, or draw a line between, government from business. Both are heavily reliant on the other. One can not function without the other. So, when a company gets that big, who's to say who is really calling the shots? Who will be calling the shots tomorrow? I don't think it's a questioin of free markets or anti-trust, it's a question of control. Who is really controlling what comes up on your search page? Is it just an ad-server?

    We're not talking about selling widgets here. We're talking about the control of the information more and more people rely on to make decisions. Perhaps it's time for a serious conversation.

  • Snide Asshat||

    What precipitated the dot com crash? Could the action against MS have had anything to do with it? That was nuts, too, and appears to have been driven my other companies, not by consumers.

    Yes. It had everything to do with it. The most severe ruling was handed down on April 3, 2000.



    Sure, because the dot com... what did they call it? Bubble? ...was totally sustainable and today we'd all be rich with the Dow at 45,000. If it weren't for all those companies and government and stuff.

  • ||

    Of course the dot com bubble was not sustainable.

    Nonetheless, while something had to precipitate a crash eventually, the answer to the question of what actually did precipitate the crash is the April 2000 Microsoft decision.

    That decision really freaked out an entire industrial sector that saw its prior live-and-let-live relationship with government suddenly thrown out the window.

  • ||

    I think when you have one company (Google) controlling such a large amount of the information, it should at least throw up a red flag.

    What information does Google really 'control' (as opposed to, say, government databases, or credit bureaus)? Google *indexes* vast quantities of information, of course, but it owns and 'controls' a very, very tiny fraction of it. Which is why competing search engines exist -- that they can index the same data as Google shows that Google does not own or control it.


    And, in any case,

  • Tricky Prickears ||

    Slocum

    I'm not convinced it's all that simple. Please, don't get me wrong, I'm am not for government intervention into Google. In fact, that's what I'm concerned about. Right now, everything seems to be on the level. My concern is the potential for abuse. Right now, if you own a web site, you pay Google to have your site come up in search results with certain key words. That is control. That in itself poses a potential for abuse, especially if government gets their little hands on it. Isn't that what the Chinese are doing; controlling what comes up in search results? Plus they control adult content with filters. Right now, we have a choice.

    And I agree that competing search engines keeps them "honest". But isn't that part of anti-trust; keeping one company from gaining a monopoly? (I don't know). But that should be of concern. As long as there are legitimate, competing search engines then everything is "fine" with me, for the most part. I'm not saying cry wolf, but don't turn a blind eye.

  • Seward||

    I just bought a Dell netbook that uses Ubuntu for its OS.

    Tricky Prickears,

    Google controls very little information.

  • Seward||

    Tricky Prickears,

    The only way a company gains any sort of stable monopoly is via government intervention. Monopolies have a long, storied history of short bursts of dominance (where they generally dramatically lowered prices, etc.) followed by decline (because they get arrogant, etc.).

  • Tricky Prickears ||

    Seward

    Perhaps you are right and I'm just being paranoid. But you are right, Google doesn't control the information, they control the access to the information, in a sense. Is it really just a complex algorithm? That's what concerns me, and I did have a personal experience which was kind of weird, but I won't go into that.

  • ||

    But you are right, Google doesn't control the information, they control the access to the information, in a sense.

    Google can't deny me access to anything on the web. They can't even prevent me from finding anything on the web via another search engine. So in what sense do they control access to information?

  • ||

    It'll be fun watching Google get what it paid for. It would be even more fun to watch the Googlers wake-up, smell the coffee and subvert the administration by gaming their search enginewith a few choice tweaks:
    "corruption" -> whitehouse.gov
    "amateur porn" -> http://www.whitehouse.gov/administration/michelle_obama/
    etc.

  • Geotpf||

    MikeP | August 6, 2009, 9:56pm | #

    What precipitated the dot com crash? Could the action against MS have had anything to do with it? That was nuts, too, and appears to have been driven my other companies, not by consumers.

    Yes. It had everything to do with it. The most severe ruling was handed down on April 3, 2000.

    See the ten year NASDAQ chart. See that peak to the left at 4500, the one that has never been regained? Yep. That's March 2000.


    The dot com crash happened because of Y2K. Prior to Y2K, everybody panicked, bought new computers and software, hired every programmer available, and basically caused a bubble. After Y2K came and went with few problems, those programmers were laid off, sales of new hardware and software fell off due to the fact that everybody pulled ahead sales earlier (that is, if a company was normally on a five year plan to replace hardware or software, and 1999 happened in year four, they made their purchase in 1999 instead of 2000). So, the bubble collapsed. The antitrust case against Microsoft had very little to do with it.

  • Mike Laursen||

    And what's the deal with shuffling the damned command interfaces around every time they release a new version?

    UI designers tend to be youthful and exuberant. And they ingest more drugs than your average person.

  • Mike Laursen||

    The exact moment that the dot.com bubble started to burst was when Philip Kaplan pressed the submit button to register the domain name, fuckedcompany.com.

  • Ebeneezer Scrooge||

    UI designers tend to be youthful and exuberant. And they ingest more drugs than your average person.

    No, that's really not it. They do it very deliberately.

  • NoName||

    Geotpf,

    Certainly, Y2K was part of it, but were all those web designers and .com companies fixing Y2K issues? I think you left out easy money somewhere. All bubbles are formed by?

  • Ebeneezer Scrooge||

    Consumers have adopted Vista in fairly large numbers (even while complaining about it) as they have bought new machines

    Not because they wanted it in large numbers, but because so many machines have come out that MS insisted on making Vista only. Or if you can get XP (and there are a number of PCs for which you can't), then you have to pay extra for it.


    while corporate IT have dragged their feet and generally still insist on XP.

    Uh huh. First time in history they've seriously resisted. But I know lots of IT departments that had, grudgingly, resolved themselves to the idea of an eventual Vista switch, for the simple reason that XP support was going to end.

    Soon thereafter MS announced Windows 7.


    Again: I am not a lefty and do not believe the government will do anything but make this situation worse.

    OTOH, any attempt to argue that MS has no coercive powers here is smoking something (and we are talking about libertarians here).

    The leftist answers are wrong. But not all the problems they bitch about are necessarily wrong.

  • Mike Laursen||

    No, that's really not it. They do it very deliberately.

    There's a lot less top-down command-and-control inside a big software corporation than you might think there is.

  • Mike Laursen||

    Eb, are you especially steamed up about Microsoft because you work in an IT job that you hate or something like that?

  • Mike Laursen||

    Or, putting it another way, all your complaints about Microsoft seem to be disapproval of how Microsoft has dealt with other people. Do you have a personal beef against them?

  • Ebeneezer Scrooge||

    There's a lot less top-down command-and-control inside a big software corporation than you might think there is.

    You just proved that you haven't been there and don't know what the hell you're talking about.

  • Ebeneezer Scrooge||

    Eb, are you especially steamed up about Microsoft because you work in an IT job that you hate or something like that?

    And you argue like a pansy ass liberal. Lacking hard substance to argue with, you attempt to assassinate the character.

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