The Beginning Of The End For The Google Monopoly?
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John
2 years ago -
2068
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It’s been an interesting few months for Google; they’re moving into new areas (potentially including an iTunes-esque music service and a social media platform to rival Facebook), have updated their search algorithm and indexing technique and have won several court cases against them (including a recent victory over Viacom regarding copyrighted material hosted on YouTube).
It hasn’t all been good news however. As I discussed in an earlier post, Google have had a public argument with Microsoft over security weaknesses in Windows and Internet Explorer (with Google subsequently banning the use of Windows company wide), they’ve also taken a major swipe at the Chinese cencorship laws, had numerous concerns over data privacy and cloud data storage and have been the target of several attacks from hackers.
In the last couple of weeks, Google has had to face a couple more situations that, if they both go against Google, could potentially spell the beginning of the end of the companies’ total dominance of the search and online advertisement market.
The first situation is a continuation of Google’s ongoing disagreement with the Chinese government. Recently Google decided to cease their adherence to China’s censorship laws, redirecting traffic from the Chinese Google to one based in Hong Kong, where results are not filtered or edited. This was done largely in response to the Aurora attacks earlier this year, which Google claim originated in China and have hinted were government-sponsored attacks.
Since Google began redirecting Chinese traffic to Hong Kong in March, they’ve received heavy criticism from the Chinese Government. In an attempt to find a middle ground, Google changed its Chinese homepage to feature a clickable image and the words ‘We have moved to Google.com.hk’, rather than automatically redirecting them.
Now the chinese regulator for online licenses has requested more time to examine Google’s application to renew their internet service provider status. Should this be turned down, users in China will have no choice but to go to the Hong Kong version of the site. It’s fairly likely to assume that should this happen, the Chinese government will block access to the Hong Kong version of Google, removing Google as a search possibility for Chinese users and putting an end to the companies’ presence in China altogether.
What’s probably far more worrying for Google however, is the recent complaints about them to the EU competition commission. The commission began investigating Google in February, after three competitors (including Microsoft, ironically) made allegations of anticompetetive conduct against them.
Joaquin Almunia (EU competition commissioner) spoke of the investigation in a London speech earlier this week, stating:
There have been some allegations of anticompetetive conduct in relation to search … we are taking these allegations seriously and I will be looking at them very carefully
Mr. Almunia went on to suggest the investigation was significant given the importance of online search to the market, and that it would concentrate on Google’s dominance of online search and search advertising. He appeared to place a heavy focus on the advertising offered by Google, stating that:
Most web services tend to fund themselves through advertising, which makes the online advertising market an important one to look at
Should Google be found to be anticompetetive, it could mark a distinct change in the world of online search, search marketing and search engine optimisation. They will have to pull back from pushing certain services and will be forced to allow Bing, Yahoo and other new competitors (such as Yandex) access to a larger market share, levelling the playing field slightly.
However the question is are Google anticompetetive? They are giving users a choice to use their service, and on the whole they aren’t doing anything akin to Microsoft’s installation of Internet Explorer on each and every computer sold with the Windows software. On the other hand, as the company grows you can see the argument for them being a monopoly in certain areas, and I think it will come down to whether or not Google’s utilisation of search advertising coupled with their dominance in the marketplace can be seen as a genuine barrier to entry for competitors.
Google don’t appear too concerned, as they released a statement stating:
We’re working with the commissioner and his team to answer all their questions … Google’s search ranking works to produce the most useful and relevant search results for users, and we remain confident we operate within European competition law
Not at all the beginning of the end.
If China fully block all Google sites it will obviously dent their total number of users, but nowhere near enough to see any real increase in market share for Yahoo/Bing. Look at sites that have been blocked in China in the past and/or still, such as Wikipedia, Twitter, YouTube, Facebook, Hotmail, and indeed for some time earlier this year Google themselves.
If Google does get blocked from China, for a couple of days journalists and bloggers will say that it will harm Google, a week later the stories will return to focusing on Google’s successes and growth.
As to anti-competitive regulations, I for one think it’s highly unlikely that Google will lose their legal battles in that area. But if they did, it wouldn’t really matter. Look at Microsoft, were they as a company harmed by the legal battles they lost? Scarcely. If Google do lose, they’ll change a few things to comply, but in such a way that it has no real negative impact on themselves, they’ll pay what will be a tiny fine for a company of their size, and then set their PR teams onto making the rest of us forget about it as quickly as they themselves will have.
Google is positioned above pretty much all other companies in the IT industry, not just their direct competitors, and I’m sure we haven’t even seen the end of the beginning for them, yet alone the beginning of the end.