Will Google go the way of Microsoft? Ask the FTC.
The antitrust suit that the Justice Department filed against Microsoft in the 1990s left the company distracted and unable to plan for the future. Could the same thing be in store for Google?
Computerworld - The biggest threat to Google isn't Apple, Microsoft or Amazon -- it's the U.S. government. Within the next several months, the U.S. Federal Trade Commission may sue Google for antitrust violations. If it does, Google will most likely end up like Microsoft after the government filed suit against it in the 1990s -- distracted and unable to plan for the future.
The biggest potential antitrust issue is whether Google unfairly manipulates its search results to point at its own services rather than competitors'. So, for example, the suit might charge that Google manipulates search results to direct consumers to Google Places rather than Yelp or to Google Shopping rather than Pricegrabber or Shopzilla. Another potential issue is whether Google's AdWords marketplace discriminates against ads from services that compete with Google's services.
The New York Times notes that the Nextag shopping comparison site has already been interviewed by FTC staff. The Times reports that company executives contend that as Google has strengthened its shopping comparison site over the last two years, traffic to Nextag has plummeted.
Keep in mind that it's not illegal to have a monopoly in a market, so Google isn't facing potential legal action over the mere fact of search engine domination. It is, however, illegal to use monopolistic power to unfairly harm competition or extend monopoly into other areas. That's the core of the potential suits against Google in these cases.
Making things more difficult for Google is that it's facing potential antitrust action overseas as well. The European Union is investigating Google for the same antitrust action. And the attorneys general of six states are also taking a look at Google's practices.
If that weren't enough, the FTC staff has already recommended that Google be sued for antitrust violations in the smartphone market, according to Bloomberg News, because of Google's attempts to block Microsoft and Apple products that it claims infringe on Motorola Mobility patents (now owned by Google).
These suits, no matter the eventual legal outcome, could cripple Google's ability to innovate and expand. To see why, you only need look back at what happened to Microsoft when the federal Department of Justice launched an antitrust suit against it in 1998. The core of the issue back then was similar to what Google faces now. The issue wasn't whether Windows was a monopoly (it was); it was whether Microsoft used its monopoly power to harm its competitors and dominate new markets such as browsers.
Eventually, Microsoft wasn't given much more than a slap on the wrist, but by the time that happened in 2004, the company had been embroiled in the suit for six years. During that period, it spent an immense amount of time and resources fighting the suit, and it wasn't sure which newly contemplated business actions might be deemed illegal.
More by Preston Gralla
- Preston Gralla: Jeff Bezos hates you
- Preston Gralla: Straight A's for Microsoft CEO Nadella at the 60-day mark
- Preston Gralla: With Comcast deal, say goodbye to the Internet as we've known it
- Preston Gralla: Patents don't equal innovation
- Preston Gralla: There's time to fix Net neutrality
- Preston Gralla: Can Amazon drones save the economy?
- Preston Gralla: Apple still making it hard to think differently
- Preston Gralla: Why Ford's CEO is wrong for Microsoft
- Preston Gralla: Time to break up Microsoft? Not so fast
- Preston Gralla: Why Bill Gates Can't Save Microsoft
- Social Media Education: The New Edge for Success Failure to train for social media will cost your business money. A recent report showed how digitally prepared companies can unlock up to...
- Social Media in Technology: A Unified Strategy for Success Find out how social media is sparking a new era of customer and industry-understanding in technology enterprises and how industry leaders are overcoming...
- Printer Installer: Eliminating Print Servers Printer Installer is an on-premise web application that enables you to centrally manage and deploy Windows shared or direct iP printers.
- How Network Connections Drive Web Application Performance Users around the globe, on all sorts of devices, expect Web applications to function as seamlessly as desktop applications. This paper discusses the...
- On-demand webinar - 7 Keys to Service Catalog Implementation Success Watch this webinar to learn 7 crucial keys to make your service catalog a success!
- Transform Your IT Service Management Watch this webinar, to learn how EasyVista can increase IT productivity & efficiency and deliver streamlined & integrated IT Service & Asset Mgmt. All Internet White Papers | Webcasts
Our new bimonthly Internet of Things newsletter helps you keep pace with the rapidly evolving technologies, trends and developments related to the IoT. Subscribe now and stay up to date!