Wednesday, February 18, 2009

The Anti-Trust Clouds Gather Around Google

I have been making predictions in private that Google is likely to come under Justice department scrutiny for anti-trust in the next year or two. Regardless of their intentions Google has achieved a de facto monopoly on search and search advertising and those with monopoly power generally are driven to use it. Even if they are not yet violating anti-trust laws, they are dictating the rules of the game for a massive sector of the economy. A couple of pieces this morning highlight the gathering clouds:

NY Times: Lawsuit Says Google Was Unfair To Rival Site -
Bloomberg: Antitrust Pick Varney Saw Google as Next Microsoft

I don't believe in Google's guilt or innocence under Anti-trust Law at this point in time - just that there are red flags in their market position and behavior. Additionally one can argue that they are a "good" monopoly as ATT was seen to be in the mid-20th century. Nevertheless, we have a history of letting monopolies flourish in this country up until they start preventing innovation. With innovation cycles becoming faster and faster, Google and their shareholders should enjoy their dominance while they can.
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