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Against Monopoly

defending the right to innovate

Monopoly corrupts. Absolute monopoly corrupts absolutely.





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What should we do about Google?

Fear of a government crackdown does drive policy as we see in this story, Google Makes a Case That It Isn't So Big link here. In fact, Google is huge. The issues are whether that is a danger and whether anything worthwhile can be done about it. To reach any sensible conclusion, one needs to examine the pieces that make up Google.

The preeminent one is search. Google entered the business after many others. It became number one by being better--more flexible, comprehensive and faster--but now has a lock on web ads. It is now the standard for both searchers and advertisers. It is hard to see how that will change.

Its second big success is YouTube and here too Google seems unassailable as a number of competitors have failed to dent its lead. That is based in part on its having become a social network, particularly for its younger users; its size makes it more attractive. But it has some real political power appealing to an older audience, as exemplified most recently by its role in quickly propagating videos of the protests in Iran.

More recently, Google has introduced Gmail and Chrome. Its email service is free but so are others which have the virtue of familiarity for existing users. Its browser apparently has made a dent in Microsoft's Internet Explorer but isn't that great an improvement over others.

To me, the most troubling of Google's ventures is its book scanning service. It is clearly first in the field, has already scanned a huge part of the world's books, both in and out of copyright, and has worked out a deal with publishers and many other copyright holders. Its technology will be hard for others to match on previously undigitized print books. On first look, this seems to be a natural monopoly, so the ramifications of its proposed settlement are enormous. Its existing lead will also give it a very large leg up on distributing new books that are copyrighted and presumably already digitized.

Another public policy response to Google, whose size is so scary and growing, would be to consider breaking up the company into its obvious components. Most seem to me already to be so large that they can survive on their own. Google's great strength besides its financial clout has been its innovation. Would breaking it up destroy that? That is a question worth further thought and investigation.


Comments

This depends on your definition of Monopoly and whether it's a bad thing. What makes it a bad thing? For me, a monopoly is government granted or caused by government intervention. It means that no other company can compete, either because they're not allowed to, or because they can't meet government standards set in place. Google doesn't seem to meet these qualifications, though. The only government intervention is censorship. It has competitors, they just don't seem to do as well, but they're out there. Therefore it's not a monopoly. Just a really really big company. Google, in my eyes, has earned monopoly status fair and square - by doing something well.

Now you're proposing breaking Google apart. How do you do this? If you send letters in to Google and and by some miracle they listen and break up, then I have no qualm. But I don't see that happening. The only other way would be to use force. Aka government intervention. But I just said above the government intervention is what creates monopoly in the first place. Maybe not such a good idea after all. Then there's the whole problem of deciding what companies we break up, and why. We can't just say "Today we're going to break up Google because we don't like them". You need some kind of qualifier. Any company that is multi-faceted? Great way to destroy the economy right there; read Atlas Shrugged to see how well that turns out.

I also mentioned what's wrong with Google being so large? Are we afraid it's going to collapse under its own weight? So be it. Are we afraid it's going to gain some kind of political pull? Sounds like a problem with having politics that can be pulled, rather than a problem with Google. Are we afraid that it's going to start doing evil things like spamming users and censoring opinions that they don't like? The reason Google is so large is because it doesn't do that. If it started, people would stop using it! Unless they actually like that. In which case, no wrong done.

Rather than thinking "How can the government fix this?", think "How can I avoid this?". If you don't like Google... 1) Write them a letter and see if they listen. 2) Don't use them. Boycott. 3) Tell your friends. Spread the word. Use your freedom of speech. 4) Find alternatives. Or make one. If a company is doing something wrong, show them how to do it right. If they don't listen, they will fail, because they are doing it wrong. If they don't fail, perhaps they aren't doing it wrong after all.

Summarily, let the market decide. Not the government. If Google would be better off broken into smaller pieces, that means there's a market for fragmented services. A wise entrepreneur would quickly jump on that market opportunity. To force it is to create a broken window fallacy.

-Casey Boone Freelance Software Engineer, Philosopher, and Student of the Austrian School of Economics

John,

I think that Google is very big company and as such it needs to be monitored closely, but at the same time I have to say that Google, so far, has prove to be bright exception in the sea of greedy companies like Microsoft. I think also you might not fully understand why Google has created Chrome web browser. I think it is direct response to Microsoft ambitions to establish monopoly over the web browsers by leveraging their OS monopoly on PC desktops. Microsoft for many years is engaged in attempt to displace established Internet standards and replacing them with their proprietary standards. If they are allowed to do this MS will be in position to control the access to the Internet and MS has been abusing their monopoly in the past. I don't know if Chrome will become a dominant browser in the future, but it all ready shook the browser market. Right now all browsers are rapidly improving their JavaScript Engines in order to compete with Google's Chrome. Also the Chrome is Open Source Software. This allows anybody to examine the code and to ensure that Google is not engaged in dishonest practices. Also I think Google has negotiated the "Book" deal because they have realized 2 things: 1. They are not so big to fight with US government that is corrupted by copyright-holders. 2. The benefits of getting the books online is more important then fighting the greedy copyright-holders. Is Google going to make huge profit of this deal? Sure, but I think that you are directing your attention into wrong place. I think you should look to the US government and their Intellectual Monopoly policies (a.k.a. IP policies). The only thing we should watch that Google do not get corrupted by this deal and remains bright light in the dark sea of Corporate America. I am sure that if Google is allowed to scan the books without copyright-holders permission they will do it and we are going to enjoy the access for free. Google wants to give us access to all books available in the libraries and we the public has already have payed with our taxes for those books to the copyright-holders. The argument that Google is going to make money from the adv. and this is not fair to the authors is bogus. Google is going to make money because they are going to provide valuable service. If the copyright-holders want to make money like Google let them scan the books, setup the servers and allow me the access.

Thanks, SAL-e

Let's break up MS first!!! Now that Bush is gone we should resume the extraction of ie from windows. I mean ie sucks.. That's just a fact. If people had to download it, it would be toast.

John, you have hit the nail right on the head there regarding Google's very ambitious book-scanning project. This project will require Google to become a publisher. Sure, they are merely scanning previously created content, but the digitization is creating new digital content that was not there before.

There is a very real danger that Google will attempt to recoup its costs by utilizing copyright to prevent others from downloading the books. We are already seeing something similar with UK's National Portrait Gallery insisting that they have copyrights over the digital copies of public domain works (read related discussion over at Flickr: http://www.flickr.com/groups/central/discuss/72157621633056325/).

I am not worried about Google possessing natural monopolies. It is their army of lawyers and their government-granted monopolies I am worried about.


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