A history lesson
In 1998, The United States Government took Microsoft to court. It was the Govt’s case that Microsoft was using its dominant position in the tech industry to force Internet Explorer down our throats, while also stifling competition from Netscape Navigator. The verdict came back in favour of Netscape, although it was too little too late. Netscape fell from being the dominant browser to nothing by 2003. Out of the Netscape-phoenix-ashes rose Mozilla Firefox.
A similar anti-trust suite was filed against IBM when Apple and other small players were just starting out. This case was thrown out but by then, the other computing players were already giving IMB a run for its money. IBM remained quite dominant in the business machines sector for a while but they did not become a monopoly.
The significance of the Microsoft versus U.S. Govt 1998 is crucial. Without that regulation, Google, Amazon, Facebook may not be what they are today. Microsoft would have a stronghold on the internet as a whole and most people would be using whatever it is that Microsoft would be feeding us.
Google vs U.S. Govt
The United States government is arguing that Google is stifling competition and being monopolistic in the search space. Google pays up to $11 Billion to Apple to be made the default search engine, plus to other brands like Samsung. In such a space, how do small players like Duck Duck go compete fairly?
Google, like Microsoft before it, making itself the default on its Android operating system is anti-competitive. The argument here becomes that you need to develop your own operating system, and also create the hardware before you can compete in the search business. Imagine if you needed to have a chicken farm, potato farm, sunflower farm for the oil, paper farm for the boxes, to be able to sell fast food, (aka Chicken Inn as Zimbos call it by default).
Google counter-argues that if they don’t protect this space by paying, low-quality search systems will sprout up and pollute how we access information. Hey Google, food for thought: If you are so good, then why do they need to pay to be the default search engine? Let your brilliance speak for itself right?
The results of this case are going to affect Google’s $130 Billion annual advertising revenue which is 84% of their total money. Its their cash cow.
American Law vs other laws
In the United States, anti-competitive behaviour is monitored and enforced by Judges, versus other countries where this duty falls on regulators. In America, judges can decide what is anti-competitive and they can also stop mergers from happening.
There are also three keystone pillars that form an anti-trust suit. First, is monopoly market power, second is abusing that power and final is harming the consumer. The first two boxes Google may be ticking, but the third one will be up to the judges to decide.
Has Google’s monopoly made them bad to use?
In any industry where a company enjoys monopoly, they tend to offer low quality products than what they could be giving. An example that rings true at home is Econet. Econet enjoys a monopoly in a lot of spaces in Zimbabwe and this makes them offer us sub-standard services because they know we do not have a better choice. If you say NetOne and Telecel are choices, we can agree, but better choices? Not by a long-shot.
Google’s search offering has become terrible with time. Now, the platform is riddled with Ads. You have to navigate a sea of Ads to gain access to the information you need. You still have no guarantee that what you get is not information given to you by the person with the biggest wallet paying Google.
What the people choose
Google’s first counter-argument is that people are benefiting. Yes they are, but are you giving them the option to choose? Or your choice is what you deem the best? That is what the case will lead to. Google paying for the top spot means the small guys can’t compete, rise or become viable choices for people to choose from.
How the verdict affects big tech
The verdict of this case will set a precedent that will lead to Apple, Amazon and Facebook also falling into the Govt’s bulls-eye. Apple uses their App Store to stifle competition from other app makers. Amazon uses its access to its store’s analytical data to sell competing products to what other people list on their platform. Facebook just up and buys any competition that springs up.
All these are problems that need to be addressed. Their anti-competitive behaviour could be stopping the next big Google, Amazon, or Facebook from rising.
It is important to note that no one thought Microsoft, with Bill Gates, the then richest man in the world, would lose a case against the Govt. But they lost. So we all keep watching because this case will decide how we all use our phones, the internet and how we will access information going forward.
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