Choose Your Top Tech Monopolist: Fully ChargedBy
In the 1990's, the U.S. only had one purported monopolist to worry about, Microsoft Corp. Now we have at least three, Alphabet Inc., Amazon.com Inc. and Facebook Inc.
It's almost too many to be angry about at once.
Two notable magazine pieces dug into the power of these tech giants this month. Both articles are worth sitting down with when you have some time. Last week, Wired looked at Facebook's handling of Russian meddling in the U.S. presidential election, capturing growing animosity that seems to be coming at the company from all corners lately.
On Tuesday, the New York Times Magazine published "The Case Against Google." The piece recounts how Google crushed a small search competitor and how the European Commission stepped into the regulatory void to fine Google $2.7 billion. (Google is appealing).
The most compelling part is the depiction of regulators' fight with Microsoft: Even though they failed to punish Microsoft in any meaningful way, the media scrutiny, paired with antitrust monitors, had a significant effect on the company's behavior -- simply because employees got nervous.
"Microsoft was so powerful, and Google so new, that the young search engine could have been killed off, some insiders at both companies believe," the author writes. He quotes Gene Burrus, a former Microsoft lawyer: “There was a new culture of compliance, and we didn’t want to get in trouble again, so nothing happened." The piece questions the myth that Google humbled Microsoft on its own. "The government’s antitrust lawsuit is one reason that Google was eventually able to break Microsoft’s monopoly."
But today Google, despite the historic fine it faces, doesn't seem scared. I suspect the company realizes it isn't enemy number one, at least in the U.S. While regulators might have the most legitimate antitrust case against Google, as demonstrated by the EU decision, rising ill-will toward tech giants and their billionaire leaders isn't focused on the search giant. That scrutiny is falling more on Facebook for reasons that have little to do with antitrust violations.
Politicians and others are hammering Facebook for fake content and a broader lack of authenticity. But it's important to note that the company is part of a growing digital advertising duopoly with Google in the U.S. If attention is the new economy online, they dominate our time spent. If it's data about our lives, they have the most of that, too.
And we haven't event talked about Amazon yet. Cities are prostrating themselves at the company's feet, trying to secure its second headquarters. Amazon can do no wrong in consumers' eyes. But if you talk to bankers or business people, Amazon is the one that strikes the most fear in their hearts. It controls more than two-thirds of the U.S. e-book market now. Amazon alone has the stock market's support to enter new industries, drive margins to zero and destroy rivals in search of more scale. It's great for shoppers and terrifying if you're in the grocery or pharmaceutical business.
So if you're a politician looking to quell public concern, or a regulator trying to even the online playing field, what do you do? Do you go after Facebook, the most-derided in the group of late? Do you go after Amazon, whose growth is so staggering that it is responsible for 27 percent of the S&P 500's gains so far this year? Or do you go after Google, a company that makes it easier to figure out where to get the best burrito -- even if that information used to be scraped without permission from reviews at rival Yelp? Or do you make some noise, then end up doing nothing?
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