Now that the economy has recovered to robust health and unemployment is back below 5%, the U.S. Senate has ample time and resources to spend investigating “The Power of Google: Serving Consumers or Threatening Competition?”
That alternative view is that whatever Google’s size, the Internet remains the Internet, searchable and indexable by technologies and strategies other than the ones launched by Sergey Brin and Larry Page in their Stanford dorm.
Furthermore, Google appears vulnerable, because the characteristics of searches to be conducted on tomorrow’s Internet will not entirely resemble today’s. You can drive a big Google Earth van through the hole to be opened up by future search-technology opportunities.
Even if Google weren’t vulnerable, the right to compete should be ironclad in America. By stopping it, we undermine the inevitable, pro-consumer competitive responses to Google.
It wasn’t all that long ago that many of us were locked in to the Yahoo and AltaVista search engines. This year, Microsoft has touted Bing’s market share against Google. That’s only Microsoft; It and other firms could create search alliances, should it come to that.
Upheaval is unpredictable. I remember back in 1997 when Bill Gates invested $150 million in Apple as a gesture “to strengthen Apple’s viability.”
Back when Microsoft was the Google of the day.
Today, Apple’s market capitalization is $380 billion, higher even than Exxon-Mobil. Its value is $20 billion shy of Microsoft and Google combined.
Antitrust’s crystal ball is cracked more than anyone else’s. And antitrust the institution is ultimately more predatory and anti-consumer than transitory dominance inevitably battered by “creative destruction.”
As corporate welfare, antitrust regulation forcibly “redistributes” customers earned by some businesses to other businesses who haven’t earned them. Or, it forcibly bars future access to new customers by a dominant firm.
Antitrust is regulation, much like all the other anti-jobs regulation that congressional leadership is condemning.
So Congress should stop and think. A firm is a collection of individuals offering something for voluntary sale or use. The same customers that buy from them also often own individual shares of the companies, or in mutual fund baskets.
No firm’s dominion rises to the level of the far more vast national and global economies arrayed against misbehavior; particularly when capital markets for corporate control are fluid (and, if they’re not, that would be a more fruitful Senate emphasis).
And public policy that denies the ability of a shareholder-owned firm to excel at any level denies consumers the benefits of the eventual competitive response to that behavior.
Consumers appreciate dominant firms like Google, Facebook, Apple and eBay, keeping firms on their toes on the one hand, and making them the “monopolists” that they are on the other.
For free, I just uploaded a couple gigabytes of files to the Amazon Cloud Drive. It’s astounding to think that hard drive makers used to brag that you could have the 10 megabyte “Hard Disk You’ve Been Waiting For” for just three grand. (See pic.)
Tomorrow’s Internet could be to today’s what today’s Internet is to this 10 megabyte hard drive. The networking infrastructure and spectrum advances (reason to be skeptical of antitrust interference with mergers like AT&T’s with T-Mobile), new devices, content and multimedia will involve technologies unknown to us today, including search advances.
Much of what you do and create in Facebook, Netflix and elsewhere is unsearchable by Google. Facebook’s offer of email (@facebook.com) is one example of the significant implications for peeling off or creation of realms within the wired and wireless Internet (or splinternets beyond it) inaccessible to Google.
Like bubbles in Alan Guth’s inflationary universe, these stand-alone realms could require new, competitive search options; who knows. Regardless, if the past is instructive, the firms to make it all happen do not exist yet. Google may or may not play an increased role, and either competitive outcome is voluntary and valid.
Multiply these numerous pressures for closed and open “Internet experiences” and it all points to vastly more capable and customized communications networks and infrastructures (plural) generations hence that will make ours look primitive. We’ll have walled gardens, but simultaneously a vaster commons dwarfing today’s.
There aren’t any “big” firms, properly speaking; we should encourage shareholder capitalism’s rise to that next level of healthy, aggressive rivalry. It’s invalid and anti-competitive public policy to drag down dominant firms when the reality is that not only products, but firms and entire industries, have life cycles.
Just as not everybody who calls himself an artist necessarily is one, not everything is a legitimate public policy issue because somebody conjures up novel new categories of monopoly.
That’s the status of antitrust regulation, which, backed by special interests and a vast implementation bureaucracy besides, seems an end in itself. It invites disruptive public policy debates in every vibrant industry sector. It’s one of the great anti-stimulus programs of the day, hampering wealth creation as it misunderstands (or denies) the very essence of the competitive process.
Antitrust raises prices, reduces output and harms consumer welfare, just like a real monopoly does. We await the antitrust case against antitrust.