I never understood the FTC's position on this anti-competitive case. Google is promoting their own services on their own website.. how is that anti-competitive? They should be able to make their products the number one result of every search if they wanted to but they obviously wouldn't do that.
Microsoft was anti-competitive because there was a significant roadblock to use competitor's services. With Google, all you have to do is type in bing.com/yahoo.com/duckduckgo.com instead of google.com.
But at least today, searching isn't just a matter of a better web crawl, or a better algorithm against web data. A key component -- perhaps the key component -- of providing good search results is being able to incorporate user feedback from previous searches.
Imagine a company with a 100% market share. Your startup wants to complete. It crawls the web, applies the latest in NLP and semantic search technology and produces an index. And, of course, buys a Super Bowl ad. The public is curious; they try your product once. And they discover that it sucks, so they never come back.
You simply can't compete on relevance without the user feedback. But without the volume of users, you'll never get the feedback you need. This is almost certainly why Microsoft made that crazy large offer for Yahoo all those years ago; it was their attempt to acquire volume to improve their relevance.
Consider the "Bing Challenge". I haven't tried it personally, but the feedback on HN has generally been "meh". And yet Bing claims that in blind tests, some better-than-expected percentage of users prefer the Bing results. How can this be? Well, one explanation is that the test has been cooked somehow to prefer Bing. But another explanation is that Bing's existing users are more likely to be "average users", while readers of HN are "techies" who overwhelmingly prefer Google. So Bing may simply be producing results that are preferred by the kind of customers who are already using Bing -- and against search terms which are more likely to be used by the kind of customers who are already using Bing. This is consistent with the hypothesis that user feedback is the primary driver of search quality.
Disclaimer: I work at Microsoft, but not at Bing. And it's a job, not a meaningful personal relationship.
This sounds like a variant of economies of scale. i.e, it's cheaper when you're dealing in bulk. I haven't heard of this being a problem for large manufacturers in the past, I'm not sure why it applies to Google.
I do agree that MS is facing difficulty with Bing because they don't have enough signals to generate decent info on what is relevant. But I'm also not convinced that they have the competence to succeed.
Disclaimer: I used to work at Microsoft and think their monopoly proceedings that forced browser choice were bunk. But that the integration between Office and Windows was largely correct, but Microsoft was too incompetent to do anything useful with it.
Quoting a promoted comment from ruddy at ars technica:
"One does not have to be a monopoly to trigger antitrust scrutiny, the actual criteria is to have "market power." Like a monopoly, it is not illegal to achieve market power, it's just illegal to abuse it in an anticompetitive manner. There's no question whatsoever that Google has market power in the online search/advertising market. The only question is whether they've abused it to muscle in on other markets."
Imagine there was an email from Larry Page to the search team along the lines of: "foobar.com is a fast growing vertical search engine that could be a huge commercial threat to us. Remove them from the search results so that fewer people will find out about it". That'd look kind of bad to most people. Or maybe a PM boasted in his performance review that a change he pushed for in a search widget increased clicks to Google properties by 10% and reduced clicks to Yahoo ones by 30%. It's that kind of thing the FTC is hoping to find during discovery, even if they don't have a case right now.
Of course they're not very likely to find that kind of stuff. More likely the hypothetical foobar.com fell down the rankings after a set of parameters were re-weighed using a ML algorithm and verified by having a bunch of human raters evaluate the search results before and after the change.
The worst part is that to maximize the chances of success of fishing expeditions like this, the FTC would of course try to extend the discovery to as many areas as possible. Including completely absurd ones, like supposed anti-competitive patent abuse. And that's why any article that lists all the things they're "investigating" Google for is going to dilute the already weak case even further.
How is Google's promotion of their own services in the search engine different than Microsoft including IE in Windows? Microsoft didn't prevent you from installing other browsers - they got into trouble simply for including a free browser.
They didn't get in trouble for merely including a free browser.
They had an illegally acquired monopoly on the OS. Therefore they were not free to use this monopoly to reach into other areas.
Essentially, it's their illegal actions - bundling, forcing PC builders to pay for Windows whether it was bought or not, breaking competing apps, etc., that got them convicted.
Once they are a convicted monopolist, then one of the remedies is to ensure that they don't use this monopoly as leverage to get into other areas.
Now Google is in the first stage - the FTC can investigate whether they have a monopoly/market power, and if they do, are they using it in an anti-competitive way.
The FTC will have trouble in this case, esp on the search side, since users are not paying anything, nor are they compelled to use Google.
On the Advertising side, the FTC may have a stronger case to make, esp if they narrow it down to keyword advertising as a distinct market. But if you take advertising as a whole, Google is still a small part of the market, and the FTC won't have much to go on.
>They had an illegally acquired monopoly on the OS. Therefore they were not free to use this monopoly to reach into other areas.
Are you saying Google's monopoly on the search engine is any different? I mean, technically it's not a monopoly, but Microsoft didn't technically have a monopoly either - there were a half-dozen other operating systems people were using. Apple, Beos, Next, etc.
And how did Microsoft "illegally acquire" a monopoly and Google didn't? Did Google just fall into theirs?
I am not a lawyer, but I feel comfortable making a moral judgement that there are ethical and unethical business practices, and a world of difference between a company which dominates by providing the best product and a company which dominates by destroying its competition. Heck, I'd even claim there is a third type of monopoly, an economy of scale monopoly, where a company dominates because its size allows it to profitably sell cheaper than any smaller competitor. It's winning because its big, not because it's good, even if it isn't sending lawyers after its competitors or selling at a loss to run competition out of business.
I'll also agree that no matter the basis of the monopoly every company must be watched carefully to ensure it doesn't start abusing its power, but I still think it is reasonable to consider how a company got to be a monopoly.
I don't think Microsoft would lose the antitrust case in today's times FWIW.
But back when the case was being determined, the internet was incredibly slow and downloading large files like web browsers was pretty painful (both in time and the avg computer user's know how). So for a consumer to get a competing product to IE (which was free and bundled with Windows) you had to either know how and where to download a competitor or go buy a competing product at a store. These are leaps and bounds over the hurdles of Google competitors today.
>Google is promoting their own services on their own website.
Microsoft was doing the same thing by promoting Internet Explorer within their OS.
>all you have to do is type in bing.com/yahoo.com/duckduckgo.com instead of google.com.
The same way you could type getfirefox.com and chrome.google.com and get those browsers in Windows.
If you want to see the real anti-trust violations, look at the mobile market. All three Apple, Google and Microsoft can be held responsible for violations.
Microsoft was actively creating patches that broke other browsers, and offering discounts to prevent companies like Dell from selling competing operating systems. That's a little more than some advertising.
Just picture it, run Microsoft update Chrome and Firefox break now what?
>Microsoft was actively creating patches that broke other browsers
Do you realize there wasn't a official specs set at that time? Different browsers came up with "patches"/features own there own. From the blink tag to Ajax, all were proprietary to each browser.
>offering discounts to prevent companies like Dell from selling competing operating systems.
Isn't that what Google is doing with android too?
>Just picture it, run Microsoft update Chrome and Firefox break now what?
I don't believe it ever happened or ever will. If Microsoft had to go that route, they would have done it before losing the biggest chunk of the browser share.
Do you realize there wasn't a official specs set at that time? Different browsers came up with "patches"/features own there own. From the blink tag to Ajax, all were proprietary to each browser.
I don't believe it ever happened or ever will. If Microsoft had to go that route, they would have done it before losing the biggest chunk of the browser share.
Retric wasn't talking about patches to IE, but rather patches to the OS that would break third-party applications (they did this to Word Perfect during the transition from DOS to Windows, too). You can all about Microsoft's colorful past in the so-called Halloween Documents, the press coverage and public documentation of the main antitrust case, and in other cases such as those documented on Groklaw.
>offering discounts to prevent companies like Dell from selling competing operating systems.
Isn't that what Google is doing with android too?
Can't say much about the rest of your comment, but I'm pretty sure Google wasn't trying to "prevent companies like [LG/Samsung/HTC] from selling competing operating systems." Apple doesn't sell iOS to other hardware manufacturers, and the other modern smartphone operating systems didn't exist when Google open-sourced Android.
Microsoft, on the other hand, has attempted to coerce vendors into selling Windows Phone smartphones by threatening them with patent suits.
Neither was downloading porn, but we all sucked it up and did it. I remember Netscape being included with my ISP's floppy disks so I never had to download it.
>With Google, all you have to do is type in bing.com/yahoo.com/duckduckgo.com instead of google.com.
That doesn't really help, for example Map Quest from being steam rolled by Google Maps, because a Google map is shown when people search for a location on Google.
Map Quest got steam rolled by Google Maps when Google came out with an insanely better interface and the continued to improve upon it.
It will be difficult for anybody to claw a lead from Google Maps, but I would have had a hard time believing anybody could steal the entire market away from Map Quest once upon a time, either.
Google may do some questionable things but it certainly is no Microsoft or Facebook or ebay/PayPal.
Google contributes to open source software in a very significant manner and completely voluntary - from early in it's history. Not sure I can name more than one or two others at their level who have done that.
Google's biggest problem is lack of human beings vs technical automation ratio. When things go horribly wrong with their services (ie. ban) and you need a human, it's pretty much impossible unless you can reach the top of a popular website with the story of your problem.
The notion that competition is a click away is ridiculous when you look at all the infrastructure Google builds to make any algorithm work at scale. Its no different then saying, "Building a better Operating System is just a program away." Google is the de-facto standard and that gives it a huge amount of power, just like Microsoft on the desktop.
Windows was a de facto standard on the desktop because it was the de facto developer platform and so it was the only choice for a reasonable consumer experience. Search on the other hand is user facing, and as Microsoft keeps telling us search engines are basically the same. Oh, and they're all free.
The point is they are both de facto platforms. The fact that its free is irrelevant, its not like its a non-profit, they are just making money via advertising instead of directly from a consumer.
Of course the fact that it's free is relevant, your argument is about switching costs and in this case the costs are literally nil.
Also their search is not a platform it's a service (no API).
Who said they broke the law? I'm no expert on antitrust law but as I understand the FTC will basically try to argue a theory in front of a judge, and if it's indeed concerning which results rank where it's not a particularly strong theory.
At this point it's really inertia that is keeping the FTC on track towards a lawsuit.
Not sure if you've noticed but they are being investigated. Investigations however do not imply guilt, and this is not a criminal investigation so it's not analogous to your example.
There is no clear and shut case here, no evidence of cartel-like behaviour or raising prices on consumers. The FTC will hire an economist who will argue that exists "market failure", Google will in turn hire several economists, scholars, and law firms to prove them wrong.
I realize that we are pro-tech around here, but Google really has close to a real monopoly power in many forms of online advertising: search, display, mobile, affiliate, they are pretty much bigger than most of the competition. That doesn't mean they are a monopoly, but they certain can and do set their own rules about how business should be done on the internet.
For example, Google artificially inflates their AdWords ad rates using the quality score algorithm. It's an ingenious little black box that they can turn up the dial periodically as needed without looking like they are raising their rates, they're just "adjusting the algorithm".
Or, Google has many times changed their organic listings that hurt businesses traffic enough to push them to AdWords. For example, selling links as advertising can get you banned from Google, and Google aggressively pursues link networks because they can be a cost effective way of advertising on Google that is cheaper than AdWords.
Google does open source and a lot of amazing things for the tech community, but it's also a business out to protect its core business - online advertising and search. Sure, it has a right to do these things on its own network, but when you own 60, 70, 80% of the internet search volume, it's a fine line between reasonable business decision and anti-competitive behavior.
The reason that google punishes paid links and link networks is that incoming links are a huge component of pagerank - if these weren't punished, it would lower the quality of their search results.
Microsoft was anti-competitive because there was a significant roadblock to use competitor's services. With Google, all you have to do is type in bing.com/yahoo.com/duckduckgo.com instead of google.com.