For the half-year to 31 December 2014, the IPKat's regular team is supplemented by contributions from guest bloggers Rebecca Gulbul, Lucas Michels and Marie-Andrée Weiss.

Regular round-ups of the previous week's blogposts are kindly compiled by Alberto Bellan.

Thursday, 31 March 2011

Are we ready for Baby Googles?

In "Minnow Microsoft v the Google Giant", posted on the BBC website today, Rory Cellan-Jones writes on the competition-based complaint lodged by Microsoft with the European Commission. He explains:
"It's a familiar story - a scrappy little underdog launches a competition complaint in Brussels about the giant that dominates its industry. Ten years ago it would have been Netscape accusing Microsoft of abusing its monopoly power - today it's Microsoft charging Google with the same crime.

Microsoft's first ever competition complaint is not just a wonderfully ironic turn of events, it's a measure of how the balance of power on the web has shifted. A decade ago control of the desktop and what applications lived on it was still all important - now it's the control of search which delivers huge power and billions of advertising dollars to Google.

... Microsoft is determined that its Bing search engine should make serious headway. In Europe at least, that's not happening. According to Microsoft, Google has 95% of the search market. Now it claims that Google is using its power unfairly to maintain that dominance. Its complaint - which as Google points out is just an addition to an existing antitrust case in which a Microsoft subsidiary was already a complainant - is that the search company is putting walls around content that rivals need if they are to compete.

In a long blog post, Microsoft's chief legal counsel Brad Smith outlines a series of areas where he says Google is impeding competition. He claims that it's very difficult, for example, for rivals to get proper access to YouTube - owned by Google - for their search results.

He points to the Google Books plan - blocked by a US court last week - as another case where any other search engine will get poor access to valuable content, in this case millions of books.

And he says that Google uses its business relationship with leading websites to block them from installing competing search boxes on their sites. ..."
This member of the IPKat team is not surprised.  He has been telling his friends for the past four years that the only thing that can stop Google taking over the world, if people want to stop it doing so, is to focus on its crushingly powerful market position.  It is effectively impossible for any other business to compete with the combination of forces -- Google Book, Chrome, YouYube, AdWord and AdSense -- which together will inexorably drive so much individualised information into its marketing and advertising facilities that no other electronic or printed media will be remotely able to provide value for the money advertisers are prepared to spend in marketing their goods and services.

Is there a solution? It has always been axiomatic in European competition terms that the existence of a dominant position in a marketplace is not harmful unless it is abusive, but Google is so ominpowerful and omnipresent, and is such an essential facility for all traders in all markets at all times, that there is no way to deal with it other than by breaking it up into lots of Baby Googles that will be forced to compete with one another, by analogy with the Baby Bells and Standard Oil.

Goo-Goo Baby here

4 comments:

Gentoo said...

Is Rory Cellan-Jones having a bubble?

Anonymous said...

This is an April Fools post, right?

Ryan said...

"It has always been axiomatic in European competition terms that the existence of a dominant position in a marketplace is not harmful unless it is abusive, but Google is so ominpowerful and omnipresent, and is such an essential facility for all traders in all markets at all times, that there is no way to deal with it other than by breaking it up into lots of Baby Googles that will be forced to compete with one another, by analogy with the Baby Bells and Standard Oil."

A very dangerous quote as it essentially states that too much success will be punished. Antitrust laws are set to encourage competition--not to punish success. Taking such course of action would punish Google for its successes. While abuse of power should be punished, use of innovative solutions and technologies (in a non-abusive way) should be encouraged. The Microsofts should not turn to the courts to pull down Google but instead should out-innovate Google (as they arguably are in some respects with Bing). To insist that Google should be broken apart merely because of its incredible dominance (a position where it has reached and maintained without an assertion of abuse by Google) would indeed hinder innovation and investment by companies. Taking this path would lead to less investment in Europe by the US-based tech companies--a position that would ultimately hinder Europe's involvement in the tech world.

brian said...

I wouldn't be surprised at all to see ultra-regulation of online search in Europe.

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