- After 7-year investigation, the European Commission has fined Google $2.7 billion for anti-competitive behavior
- Andre Spicer: Instead of creating a perfect market, the Internet has generated perfect monopolies that dominate many markets
Remember the heady days of the late 1990s? The unstoppable growth of the Internet seemed to promise the dawn of a perfect market. We were told that a small start-up on one side of the world could compete with huge corporations on the other side of the world — and win.
Fast forward 20 years and the world looks quite different. Internet traffic is corralled through a small handful of websites like Facebook, Twitter and Amazon. Each of these sites are not just the biggest, but often the only serious players in their own market.
Celebrities use YouTube (owned by Google) to share their latest cosmetics tips.
We all use Google, all the time.
Concerns about a handful of companies’ dominance over the online world have been rumbling away for years.
Regulators were worried that Google used its might to take away the market share of various price-comparison websites. Why? Two reasons. First, Google’s dominance of Internet shopping drove out competitors. This made it tough for existing companies and new companies to get a foothold in the market. The second, more important, reason was that customers would only see companies who paid Google to display their wares at the top of the page when they did a search.
The upshot was that customers would have less choice when they went online to shop. They could easily end up paying more for a smaller range of products.
Arguably the EU investigation focused on the less controversial anti-competitive practices of Google, staying away from the much more profound issues of privacy and data ownership. These are more troubling because Google can make small changes to its search function–as in the earlier FTC case– to create a semblance of fair competition, but changing the way it deals with data goes to the heart of its business model, which is to collect and sell data about its users
No matter what the theory says, consumers are left in a tricky position.
Many of us are completely reliant on the services that Google provides. We would get lost without Google maps or miss appointments without our Google calendar. Indeed, just imagine what would happen to society if Google’s services suddenly stopped working. We would find it difficult to communicate, do business and learn.