Seattle Times: ‘Google should be investigated for violation of federal antitrust laws’

invisibleSHIELD case for iPad“The news that Google is in trouble in Europe for its data-gathering practices is a reminder of the global effect of this one company. It is an accomplished company, but also one the Justice Department needs to look at, and on an issue more central than data collection,” The Seattle Times editorial board argues. “The issue is monopoly power.”

“Google makes most of its money by selling ads that appear on the top of your screen as ‘sponsored links’ when you search with certain words. Advertisers set prices for these ads by bidding in an automated auction,” The Seattle Times writes. “It may seem odd that a company could exercise monopoly power without setting its own prices. Eric Clemons, professor at the Wharton School, responds with an analogy. Suppose an airplane is going to crash, and there is only one parachute. The owner of that parachute, he says, can easily get a monopoly price by auctioning it. This is like what Google does.”

“To make such a case against Google, the Justice Department will have to establish several points. One, says Clemons… will be establishing what ‘relevant market’ Google is in. The company will argue it is a mere minnow in the market for all advertising,” The Seattle Times writes. “The government will have to argue that in the market for Internet search advertising — the relevant market — Google is a whale.”

The Seattle Times writes, “Its case against Microsoft did not work out well. The Justice Department won in District Court and lost on appeal. But that was a decade ago. Times have changed. Google could be different.”

Full article here.

MacDailyNews Take: In the U.S. achieving a monopoly is legal; in fact, it’s the ultimate goal. It’s monopoly abuse that’s illegal. Therefore, the question is: If Google has a monopoly, what did they do, if anything, to abuse their monopoly position?

31 Comments

  1. Uh, if the owner only has one parachute, and the plane is going to crash. Wouldn’t he keep it for himself? What good would the money do if he is going to die before he could ever use it?

  2. When the Seattle Times runs a hit piece on a technology company you have to wonder what that company did to piss off Microsoft this time.
    Seattle Times motto translated from the original Latin,

    “From Ballmer’s fat head to the pages of the Seattle Times.”

  3. The parachute analogy is wrong. This isnt life and death. This is just ad space.

    When Google auctions ad space it is the purest form of market driven pricing. It also tells Google and the rest of the world exactly what something as nebulous as an Internet ad is really worth. Consider Google’s method vs. Apple’s, “Initially an ad will be one million dollars” method. There is no way to know if an ad is worth that much. If I were buying space I’d much rather be in the auction pit bidding on Google’s space. I have an idea what I want to spend. I can try for different spaces until I win an auction with my budgeted sum. I also develop a sense of what ad space is worth to others.

    I don’t see why this is a problem and it stinks of more bottom feeders seeking their moment in the limelight by screwing with Google simply because they are successful.

  4. Wow, how people’s memory is wrong… You’d think a reporter would actually get it right — especially in Seattle!

    “The Seattle Times writes, ‘Its case against Microsoft did not work out well. The Justice Department won in District Court and lost on appeal. But that was a decade ago. Times have changed. Google could be different.’

    The DoJ won. Period. What was overturned in the appeal were the penalties. The original judge wanted Microsoft broken up. The appeals court sent it back down for a different penalty. A new judge agreed to a “penalty” of just “We, Microsoft, won’t do it again and you can monitor us more closely.”

    Microsoft is still a company convicted of abusing its monopoly power. That has never changed.

  5. I don’t see how you can say Google has abused its monopoly position. It created the best search engine at the time, and gained a majority market share based on the ease of searches by using its engine.

    The gathering of data is another matter, and violates different privacy and other laws. Has nothing to do with Google being a supposed monopoly.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.