In this economy, is a Google antitrust probe "un-American?"

In this economy, is a Google antitrust probe "un-American?"

Summary: Is a probe of a leading tech company, at a time when the tech industry seems poised to buck the current economic trend, really the smartest move out of Washington?

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Update: Google says in its official blog this morning that it received "formal notification" from the FTC about an investigation but that's it's still unclear what the FTC's concerns are.

In recent years, I've taken Microsoft to the mat for being behind the curve when it comes to technological innovation - but a section of Larry Dignan's post yesterday about a possible government anti-trust probe against Google really made me stop and think about how Microsoft got to this point. It read:

It’s unclear how the investigation will impact Google’s operations, but history provides a quick guide. Typically, these antitrust investigations make the target company less competitive. After all, companies under the antitrust microscope try to stay out of trouble and that means paring back their natural competitive impulses.

Dignan noted that one could argue that Microsoft became less competitive after its high profile battle with the Department of Justice in 1998, which revolved around the company using its operating system dominance to push its Internet Explorer browser. Microsoft settled with the DOJ in 2001 but Dignan goes on to note that "since that settlement, Microsoft has missed the tech curve in a few key areas—notably mobile. Microsoft had to watch its bundling practices going forward."

Essentially, Microsoft was on alert after the settlement, just like a kid who takes a beating from a bully  and then left to walk around campus on eggshells so as to not upset the bully again. But looking back, the timing of the Microsoft suit is noteworthy. We now refer to the 1998-2001 time frame as the dot-com years, one of the most booming and energetic times in Silicon Valley's history - and the earliest years of a new company called Google, which incorporated in September 1998.

I raise this point now because, in many ways, the start-up energy around Silicon Valley today feels a lot like those early days of 1998 - companies are hiring, there's traffic on the freeways again and marketing and networking events featuring up-and-coming companies are back. The Q1 2011 Venture Capital report by CB Insights suggested that "VC is back" and that the amount of funding and the number of companies being funded in Q1 came in at pre-recessionary deal and funding levels. The report notes:

Given the $1B jump in funding over the prior quarter with a similar number of deals, it is also clearly a quarter driven by mega-financings in both internet and greentech companies as well as larger venture capital median deal sizes.

Finally, in the aftermath of one of the most turbulent economic times in nearly 100 years, there's some good news coming out of a sector that has already proven to resonate through national and global economies. And now the government wants to start poking around one of the big players because it might be too big? Here we are in a time when several big players - Apple, Facebook, Google, Microsoft - are all trying to out-innovate each other and the government wants to throw a wrench in it?

Now, I'm not saying that some eyebrows haven't been justifiably raised over Google's dominance in certain markets, including search. But I do know that, as a consumer, I have choices, such as the ability to use Bing instead of Google Search on my Google Chrome browser or my Android mobile phone. And if I recall correctly, consumers are asked, when they first start using Android phones, to choose a default search engine.

But I also have to ask myself: did any good really come from the government probe and suit against Microsoft a decade ago? Was it because of the suit and the pushback against Microsoft that Google became a powerhouse? Was it because of the suit that Microsoft has fallen behind in many of the computing platforms today?

I remember downloading Firefox because I thought it was a better browser than Internet Explorer, not because something was or wasn't bundled on my computer. In that sense, innovation trumped government interference.

So, with that said, dare I ask this question: Is it un-American for the government to launch a probe of one of the leading companies in an industry that has the potential to put the U.S. back on the global map?

There are a lot of startups out there that are building on the work that Google and the other powerhouses are doing. How many small businesses are easily benefitting from a listings in Google Maps, making it easy for customers to discover them via smartphones? How many developers are working by building mobile apps for competing platforms, such as Apple's iOS and Google's Android?

And Google isn't even winning every race. Microsoft Office is still bigger than Google Apps. Facebook is eating everyone's lunch in social. Buzz was certainly no Twitter. And Google Music Cloud is facing competition from Apple and Amazon.

Sure, maybe there's a compelling reason for Washington to start poking around. But I might argue that Washington and New York (aka Wall Street) have already done enough to screw up this country. The last boom originated when Silicon Valley innovation was thriving. And now that we're back at a point where Silicon Valley appears to be poised to come in and save Washington's and New York's butts again, along comes a threat of a government probe.

Forgive me if I'm a bit cynical.

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189 comments
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  • RE: In this economy, is a Google antitrust probe

    No it's not.

    I am a fan of Google's products, but if they're manipulating search results to benefit their own products, then that is an abuse of their monopoly position.
    intman
    • RE: In this economy, is a Google antitrust probe

      @intman Thats right... bottom line, the rules are the rules despite the condition of the economy. Also, the MS Antitrust started in 1993... The US Economy was stable, but no good. Global GDP Share was down...
      apetti
      • RE: In this economy, is a Google antitrust probe

        @apetti

        <i>"...bottom line, the rules are the rules despite the condition of the economy."</i>

        Amen!
        The One True Fnerd
      • RE: In this economy, is a Google antitrust probe

        @apetti, I totally agree. Being American is doing the right thing regardless of timing or inconvenience.
        gbdarren@...
    • This is like the citizens of Chicago that adored Al Capone ....

      @intman
      ... because he was good to them.
      It is till not right, morally or ethically!
      kd5auq
      • RE: In this economy, is a Google antitrust probe

        @kd5auq

        Well said!
        Bear78
      • RE: In this economy, is a Google antitrust probe

        @kd5auq
        I agree with your sentiment:

        Fair and impartial justice is the american ideal. In this economy and always honest and fair analysis of our conduct and deeds for a stronger America is what is required.
        wmjc@...
    • RE: In this economy, is a Google antitrust probe

      @intman Really? abusing a monopoly position? Are you forced into using google? Are there search engine options other than google? While I'm not a fan of manipulating search results, if I don't like the results I'm getting I have a plethora of other options.
      wasabitobiko
      • That is my take as well.

        @wasabitobiko

        This is crazy. Google has 60-70% control. Dominate for sure but monopoly it is not. Blekko is interesting. Bing maps are far superior. Mapquest maps are beautiful and highly accurate.

        As good as Google is, there are solid and well performing options.
        Bruizer
      • RE: In this economy, is a Google antitrust probe

        @wasabitobiko That's exactly right! I said this very thing not two weeks ago when I learned of this. I wasn't happy they may be fudging results either but like it or not, I CAN use another search engine. But I can't use BING because that's nothing but Google with another a Microsoft sheet pulled over it. Nice innovation there Microsoft! (NOT)
        blueskip
      • But it's not about the end user.

        @wasabitobiko <br>This falls under what Google is doing to drive traffic to their sites, with their ads, vs a competitor's site using someone else for ads.<br><br>With 70% of the market, they need to be more open and transparent. Sure you can use another search engine, by why if Google's giving you links that work for you, but only the sites with "ads by Google"?<br><br>The end user doesn't even notice (or know of how all these ads work), but the sites not using ads by Google suffer along with the ad company.<br><br>

        Add to that them paying companies to put their search on their browsers and market, they could "buy the internet" as it were.

        That would be an abuse of their monopoly
        Will Pharaoh
      • RE: In this economy, is a Google antitrust probe

        @wasabitobiko He did say "if."
        The One True Fnerd
      • RE: In this economy, is a Google antitrust probe

        @wasabitobiko <br><br>Yes, it is. This is not about consumers suffering directly, but another type of monopoly abuse. Search engines act as gateways to the rest of the Internet, so using your dominant position in one Market to try and kill your competitors in another market, is also considered an abuse of monopoly position - it's preventing the proper functioning of a free market
        intman
      • RE: In this economy, is a Google antitrust probe

        @wasabitobiko
        Maybe not Google Search, but you are pretty much forced into using YouTube. And if you want to find stuff on YouTube, you have to use Google. That sounds a lot like product tying to me. (IANAL).
        A.Sinic
      • RE: In this economy, is a Google antitrust probe

        @wasabitobiko
        If you are an advertiser, choosing not to use Google means choosing not to sell products.
        A.Sinic
      • RE: In this economy, is a Google antitrust probe

        @wasabitobiko Did you read the article? He isn't asking if Google is guilty of anything, he is asking if it is unamerican to bring an investigation in this current economy. I personally say no it is not. Doesn't matter what the economy looks like if a company is doing something wrong they should be brought to justice no matter who it is. Why should they get an unfair advantage buy using illegal tactics and we turn a blind eye? Wouldn't that be unamerican toward it's competitors? I am not going to make a judgment on Google actually doing anything wrong but if there is a reason to investigate it should be done.
        non-biased
    • RE: In this economy, is a Google antitrust probe

      @intman Uhmmm...what products? I mean which ones do you pay for exactly? NONE
      blueskip
      • RE: In this economy, is a Google antitrust probe

        @blueskip Oh, you pay with your information and browsing habits. Nothing is free in this world, NOTHING.
        statuskwo5
      • RE: In this economy, is a Google antitrust probe

        @blueskip - no money is given away, sure...<br><br>Stuff that could be far more valuable readily is:<br><a href="http://talkback.zdnet.com/5208-12691-0.html?forumID=1&threadID=71841&messageID=1388017&tag=content;col1" target="_blank" rel="nofollow">http://talkback.zdnet.com/5208-12691-0.html?forumID=1&threadID=71841&messageID=1388017&tag=content;col1</a><br><br>If I were a student, I would stay a LONG distance away from those terms of service... since <i>intellectual property</i> can be more valuable, and "free market" is often thwarted by hypocrites. (e.g. http://www.progress.org/cwfedex.htm )
        HypnoToad72
      • RE: In this economy, is a Google antitrust probe

        @blueskip

        Just because you don't pay with cash for a product, doesnt mean you're not paying for it in some way, nor does it mean it's not a product
        intman