Google busted; copyright office commentary; X sues advertisers: Newsletter 7 August 2024
Newsletter 56: Why Google got caught and it won’t matter; public domain photo search engine; X whines about boycott. Plus three people to follow and three books to read.
Did Google cheat?
What do you think. Did Google violate antitrust law by unlawfully using its monopoly to exert leverage in other markets?
Of course it did.
Let’s be clear. This isn’t really about Google. All big dominant tech companies do this. The only question for the feds is, how long is it going to take for them to prove it, what should they do about it, and by the time they settle things, will it even matter?
First the facts. After a suit by the FTC, Google was convicted of antitrust violations (gift link). In particular:
- It paid to put its search as the default on various platforms (mobile phones, browsers, mobile carriers) to maintain and expand its search engine monopoly. Google paid $26 billion for these deals, including requiring mobile carriers not to supply apps for other search engines.
- It charged more for ads than they would otherwise have cost if it didn’t have a monopoly.
The government made its case that these were illegal actions for a company that has an effective monopoly and the judge agreed.
But this is standard procedure for any big tech company. Here’s the familiar game plan:
- Build something cool and great.
- Make it as cheap as possible, even free.
- Make it easy to spread.
- Swallow up market share rapidly. (Blitzscaling!)
- Monopolize a market.
- Continue to maintain dominance by bribing partners and acquiring competitors, even as the actual service declines in utility (you are here). This is what Cory Doctorow calls “enshittification.”
- Use that monopoly to gain advantage in other markets.
- Leverage that monopoly to attempt to attain dominance in a new market when disruption arrives and people shift to a new way of doing things.
That’s how Microsoft turned dominance in operating systems into dominance in applications and business social networking (LinkedIn), and attempted to use it attain dominance in browsers.
That’s how Meta turned dominance in social media (Facebook) into dominance on multiple platforms, like Instagram and WhatsApp.
And it’s how Google turned search dominance into dominance in email, maps, video sharing (YouTube), and browsers.
That playbook is so common that tech companies are pickled in it. They do it by instinct and never give it a second thought.
Antitrust actions begin at step 6. This suit took four years wend its way through the lawsuit process and the trial took 12 weeks. Now it will take another few years as Google appeals it. It would surprise me if it wasn’t settled until 2028 or later.
The best analogue is U.S. vs. Microsoft from 2001, in which Microsoft admitted to illegally tying its browser to its operating system. The fact that the Google suit was argued 23 years later is not because of the rarity of tech companies acting as illegal monopolies, but because it is so arduous for the government to try and convict them and make it stick.
At some point its likely that Google and the U.S will agree to a remedy, such as that it will cease its payments to maintain its search dominance.
The remedy that the court put in place against Microsoft may have contributed to its lack of eventual dominance in the browser market, but Microsoft’s own inability to create and maintain a better browser probably had a lot to do with that.
Right now, Google is attempting to leverage its search monopoly into an advantage in AI. (So are Microsoft and Meta). By the time this suit is settled and Google is forced to do things it doesn’t want to do, like spin off Android or stop paying for search defaults, search is going to be a lot less important. In the next few years, AI search tools are going to get a lot better, and AI-powered search (or more accurately, AI-supplied answers) will replace traditional search.
So the remedy will appear when it’s too late to matter. Just as it did with Microsoft.
As you read about lawsuits like this, always keep this in mind: they are expensive for the government and they are winnable, but by the time the penalties kick in, disruption has shifted the market where the monopolist operates.
Does this mean the FTC shouldn’t pursue antitrust suits? I don’t think so. The suits, threats of suits, and consent decrees do restrain some of the monopolists’ worst instincts. They at least potentially deter evil and corrupt behavior.
But recognize that by the time you hear about a judgment — and by the time it is settled — market disruption will have inevitably upended the very market that the FTC is trying to regulate.
News for writers and others who think
The US copyright office published Part I of its report on copyright and AI. It calls for Congress to “establish a federal right that protects all individuals during their lifetimes from the knowing distribution of unauthorized digital replicas.” Good idea. Don’t hold your breath.
A new site, public work, is a search engine for high-quality public domain graphics. If you like free old-timey pictures, it’s a gold mine. If you don’t, it’s a lot easier to just tell ChatGPT to draw something for you.
X sued a consortium of advertisers that is boycotting it. It looks to me like X, a huge proponent of “free speech,” doesn’t like free speech when it’s the advertisers doing the speaking (or in this case, lack of speaking). Suing people who think you’re hateful to get them to voluntarily spend more money with you is a pretty odd strategic move.
Three people to follow
Allison Carter , editor-in-chief of PR daily and font of good PR takes.
Clay Richardson , expert on automation, AI, and the low-code revolution.
Jane Wesman , a book publicist who I’ve seen perform unimaginable miracles.
Three books to read
Charged Bodies: People, Power, and Paradoxes That Launched Silicon Valley by Tom Mahon (Pragmatic Bookshelf, 2024). Interviews tell the story of how tech got established in in the Bay Area.
A Field Guide to Lies: Critical Thinking with Statistics and the Scientific Method by Daniel J. Levitin (Dutton, 2019). How to think and not get duped.
A Very Sweary Dictionary: From abso-f**king-lutely to w**kstain: an essential, if somewhat impolite, style guide by Kia Thomas (2020). A fun little reference book that you ought to follow when you write — presuming you don’t care if you get fired, of course.