25 June 2011

FTC FINALLY Opens Up Broad Review of Google’s Market Dominance.

As I have pointed out over many a blog, In my view Google as a company of one. It cannot be judged by any precedent. Because frankly there is none. FTC to Serve Google With Subpoenas

No other company in the history of technology has held as much power and sway as the now sits in the hands of Larry Sergey and Eric. Google’s protestations to the contrary – they are now clearly a company that transcends the ability of any single government’s ability to control them via conventional regulatory means. The law – arcane and archaic as it maybe does have one or two tricks up its sleeve. Based on its limited controls – the US Law allows the various instruments of the US government’s executive branch to determine anti trust behavior. It is here that the Department of Commerce in conjunction with the Dept of Justice has come with the conundrum of what to do about Google.

While I believe that there are few if any Google employees who are outright evil. The ability to exert that power is just too strong. Google is doing bad things. This will come out in the investigation. But as regular readers know I am a strong believer in Newton’s Second Law. I firmly believe that Google is doing bad things through its lack of effective oversight of its employees who are in many cases determined to crush the opposition to anything that will get in the way of the Googleplex Borg. It is not – thus – that the people are doing bad things- but rather that they can manipulate a marketplace by either their direct actions or their withholding of certain facilities or even just by trying to do one thing – Google will (and yes sometimes inadvertently) effect a change in the marketplace that benefits the company. My opinion was that there was little that the US Government could do to prevent the Google acquisition of ITA Software. This proved to be right. BUT Google has stepped beyond the role of a conventional marketplayer.

Google knows this and its people know this. But Google has not yet put in place those controls to prevent damage to the marketplace. Google therefore has therefore been allowed to “get away” with things in the past. In my view this has only emboldened the Google Acolytes to behave even more without constraint. Should the Government have stepped in before? Yes. But they chose either through lack of direct evidence or through negligence or even because they lacked the resources to engage the giant. No matter – the decision has been made to go after them.

Am I right or wrong? On the one hand Google’s resources may indeed be greater than that of the Government’s ability to pursue this case. Thus there is no sure thing that the US Authorities will prevail. On the other hand successive US and International Authorities have failed to place any controls on the tech giant. As it evolves into a product based company from being a pure search utility – it has blown through many control gates.

In travel their power is not absolute. However do they have the ability that they can and will use? In my opinion yes. The lackluster appearance of Google Places for Hotels and the mediocre Google flight product may be a harbinger of a somewhat less than stellar product that will come from Troogle. But make no mistake – these are first generation products and Google will do better. So before these products start to appear to dominate the market, we need better controls. Well sadly it is too late for that. We will get products from Google’s cash pile that will kill certain players in the market. Some of these players probably will deserve to die. But others will be harmed irreparably. There will be “Mapquests” in travel. Indeed let’s be clear here – in travel’s case - there will be some “victimless” crimes. But there will be victims and that awesome power has yet to be revealed.

But by any measure the company is a monopoly and therefore its power must be curtailed. However that is achieved will determine much of what we can and cannot do in the coming years particularly in innovation will shape not just the Travel Industry alone.

I urge you if you are a new or occasional Reader to type the word “Google” into the search box and read some of the posts I have written before. Wander through the Professor’s prognostications. This represents my opinion. Let’s hope that both common sense and the what is “right” rather than what one company can do with its power prevail.

Everyone is entitled to an opinion. This is mine. Please feel free to write to me and tell me how you feel about this.


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