Posts Tagged ‘Google dominance’

Why Google Monopoly Matters

Okay, there, got your attention. Google Monopoly. Sounds sinister, eh?

The point of this post is not to get into what all the implications of such a thing — Google’s dominant market power — but instead to comment on the steady drip of blog postings and articles that keep telling us to, move along, nothing to be gained by thinking about Google as a dominant force in today’s network media environment. Indeed, to listen to this cant, its just plain stupid to even raise the issue of anti-trust when it comes to Google’s overwhelming dominance of search, as the Federal Trade Commission (FTC) decided to do in June of this year.

The major brew sites for this kind of stuff, as far as I can see, include outfits like the Technology Liberation Front, a libertarian group utterly enthralled with free market fundamentalism (see here and here), entrepreneurial journalism guru Jeff Jarvis, and Matthew Ingram at GigaOm (see here and here). In his latest missive, Ingram takes aim at a story by Chris O’Brien called, Google’s grip on users is as firm as it is invisible. Awesome title! I can’t wait to read it.

My aim though is not to judge O’Brien’s work but rather the silly case that there’s nothing to even bother looking at when it comes to Google’s growing dominance of a growing suite of online digital media services (search, servers, browsers, operating systems, maps, document storage, distribution of online advertising revenue, etc.). So too should we turn a willful blind eye,  sings the ‘move-along crowd’ from the same hymn sheet, toGoogle’s powerful array of servers buried deep in cyberbunkers and in other locations scattered around the planet (yes, cyberbunkers, as some of them literally are in old ‘cold war’ missile silos) (for more on bunkers, bandwidth and datacentres, see paper by Peter Jakobsson & Frederik Stiernstedt). Nothing to see here folks, move along.

Yet, dominant communication and digital media players tend to be close to the state, and easily regulated by the state, turned into proxies in the copyright wars, moral crusades against online erotica, national security crackdowns (Patriot Act, “Lawful Access” anyone?). So, even from an uber libertarian position, we should be skeptical of concentrated power — gateways through which the sluices of cyberspace flow. Anybody that thinks that is far fetched, can have a look at Microsoft’s recent statement on the issue here.

It is hard to decide just where to start when confronting this, “move along” mentality. Let me start by saying that it would be real nice to have direct links to the Federal Trade Commission’s launch of an anti-trust investigation in June, earlier this year. None of these guys do that, and instead just cycle us through links to various online newspapers and other such sources. I looked the other day and didn’t find one directly, but I’m busy and not the one telling people to bugger off. Here’s a link to Google’s response to the FTC announcement, however, and another to the Senate Judiciary Committee hearings held last month, “The Power of Google: Serving Consumers or Threatening Competition“. I hope you find them helpful.

Many of the ‘turn away, don’t look crowd’ assert that it’s very hard to count market power. They’ve got a point, it is. The problem, however, is they but don’t even try.

Instead, Ingram for example, offers up some numbers of unknown providence showing Google’s dominance of search to be in the 65% range, falling, and proof that the company is not unassailable. However, what he forgets to mention, even though writing from Canada, is that those are just the numbers for the US (see below).

There is a lot of hand-wringing amongst the “don’t look crowd” too about the poor availability and low quality of the data on the subject. Yet, the numbers available quite easy to find, reasonably reputable, replicable, and of a piece so to speak (see for example, Experien Hitwise, Comscore). The number 65% so often pointed to is for US; it flunctuates in a 2 percent band from month to month, but has stayed remarkably steady after plateauing at that level.

There are many comparison made, too, mostly unfavourable to the 1990s and all the misguided diagnoses then. Of course, the myths of the era are legendary, but pointing to predictions made then about say Yahoo, Excite, Infoseek, Lycos, Altavista, and a myriad number of other entities is not apt precisely because at that point in time there wasn’t a dominant entity like Google, and search had not yet emerged as the nexus through which so much else flowed. At the time, it was not flow-through, however, that was key, but rather keeping people happily enveloped in walled gardens. A disaster all away around, and thank god things didn’t pan out as imagined.

But search has emerged as a key gateway through which the masses must flow. And one thing that our US-centric, move-along crowd forget to note is that their preferred number of 65% of all searches going to Google applies only to the United States. The numbers for Google globally are typically in the 80 to 90 percent range, including the low 80s here in Canada. They are as high as 93 percent in Australia. And the trend, at least until 2010, has been one of growing dominance, not shrinking.

Google is company non-grata in China, Japan, Korea, Russia. Monopolies there remain nonetheless. There is something about this area — and others, including FB — of the digital media that is prone to consolidation. That may not be illegal — which, again, our ‘move along crowd’ never fails to mention — but levels of concentration this high are high even by the historical standards of the ‘industrial media era’. They may not be illegal, but they are a signal to perk up and pay attention and that, generally speaking, even from the perspective of free marketeers, the situation is a far cry away from the ideals of a competitive market.

Another argument from the ‘move along crowd’ is that dominant companies such as Google are not nearly as omnipotent and immovable as the fantom foes they conjure up would like us to think.  Tim Wu’s the Master Switch seems to be the favourite whipping boy of this group as of late, attributing to him the notion that digital media  monopolies/consolidation are immutable and omnipotent.  Yet, this is a mischaracterization. Wu, like other such as Yochai Benkler, do not argue that players with dominant market power are either omnipotent or permanent, but a regularly occurring feature on the ‘infoscape’. They may be transitory, but also hard to move and sometimes a short time turns into a very long time, indeed — like 70-80 years for the ‘natural monopoly’ telecos throughout most of the 20th century.

This is basic Schumpeterian innovation economics and the move along crowd ignores it, but it ’tis all the rage, even amongst some of the folks amongst this crowd. And while transitory, monopolists/dominant firms can fundamentally tilt things — and then bury them in the metal (servers, search, networks) so to speak — for better or worse. So, when a dominant company like Google (or Facebook, or Amazon, or Apple, or . . .) dominate particular nodes in networked spaces — which are simultaneously social spaces and market places, and much else in between — we need to do our utmost to see that things point more towards better than the worst.

We need to pay attention, and not bury our heads in the sand, and make up excuses as to why we should turn a blind eye to such an obvious phenomenon. We can debate until the cow’s come home what all of the implications of ‘digital media concentration’ might mean, if in fact it exists at all, but a few basic facts on the ground, some references to historical cycles repeating (from methodless enthusiasm, to competition, to consolidation, ala Wu, Benkler, Gabel, Babe, etc.), and presto, we have a recipe for conversation about digital media consolidation and democracy in the 21st century.

%d bloggers like this: