The current market will likely be eclipsed by technology.
A friend of mine once said that his business ambition wasn’t to be the CEO of a Fortune 500 company, but, and I quote “to be broken up by the government.” He’s done extraordinarily well - he has a house in the south of France I’ve never seen – but alas, he has yet to achieve his lofty ambitions. For Sundar Pichai, CEO of Google’s parent company, Alphabet, it’s a dream come true.
I suppose that it was bound to happen after Amit Mehta, a judge in Washington DC ruled that Google’s search function was a monopoly, the Department of Justice would try to break the company up. Some 90% of internet searches uses Google, giving it a monopoly through the “power of default”, the concept the Justice department used to break-up Microsoft in 1999 (although, Microsoft managed to stay together on appeal of the verdict.)
The monopoly by default was achieved, in part, through Alphabet paying enormous amounts to companies to make Google the exclusive search engine. That’s nothing new, distributors have been paying for product placement for ages. It’s the exclusivity that makes in problematic.
The problem is that the Justice Department’s proposed remedy - spinning off Google’s Chrome browser and Android OS don’t at all fix the problem the government is trying to address. They’d still have the 90% monopoly on searches - which is where 90% of its income comes. The government’s case seems to be less about open competition and more about a political battle call.
The EU courts - in their quest to become the regulators of the internet - have already set a remedy in Europe. There Google can still pay for placement, but not exclusivity. The upside to a EU style solution would be that without a fat subsidy from Google, firms like Apple would probably create their own search engine. Which would legally solve the problem, and promote competition. Practically, though, it wouldn’t do too much.
In network theory, there is something called the Matthew Effect - drawn from the Biblical the Parable of the Talents – with the money line being verse 30: “For to all those who have, more will be given, and they will have an abundance; but from those who have nothing, even what they have will be taken away.” Or, Verily I say unto you: The bigger you are, the bigger you are going to get. Just look at Amazon.
It only took a few hours for the optics of the government’s announcement, to start looking awkward when two Google researchers shared the 2024 Nobel Prize in Chemistry. An ex-Google researcher also just won the Nobel Prize in Physics.
The bigger question, for the googling taxpayer, is does any of it matter? The trial will be expensive and take years when technology, on the other hand, moves a lot faster than the courts. ChatGPT is already the search go-to for some 8% of Americans. Which tells us that competition for Google’s search market share probably won’t come from another search engine al all - it will come for AI.
Raising the sensible question: What’s the point of the break up that's about to be outpaced by technology?