Let’s start with the numbers I shared in 2019:
- The five largest companies in the world (by valuation) are Apple, Google, Microsoft, Amazon and Facebook, followed closely by Alibaba, Berkshire Hathaway, Tencent Holdings, JPMorgan Chase, ExxonMobil, Johnson & Johnson and Samsung Electronics.
- Amazon owns around 50% of the e-commerce market followed by eBay (6.6%), Apple (3.9%), Walmart (3.7%) and Home Depot (1.5%).
- Four vendors own close to 75% of the cloud infrastructure market (Amazon Web Services,33%, Microsoft 13%, IBM 8%, Google 6% and Alibaba 4%, as of Q1 2018). Three providers – Amazon Web Services, Microsoft and Google – own 55% of the overall cloud market.
- Apple cracked the worldwide smartphone 50% market share threshold in 2018.
- Google owns over 90% of the Internet search market.
- Facebook continues to dominate social media, followed by YouTube (Google), WhatsApp (Facebook), Facebook Messenger (Facebook), WeChat (Tencent) and Instagram (Facebook).
- Microsoft owns 36% of the worldwide operating system market, behind Android at 42%.
- The same market trends are seen in other industries, like ridesharing, where Uber and Lyft own over 70% of the market.
- AT&T, Time Warner, Disney, Verizon, Comcast own huge chunks of “media” but are under constant attack – you guessed it – from Amazon, Netflix, Apple, Facebook and Google for media market share.
Not much has changed since 2019 except the arrival of TikTok, the concentration of other technology industries like the ERP and CRM industries, and Tesla’s fading dominance of the EV market. To deny the oligarchical characteristics of the technology industry is to deny climate change. At the same time, given the numbers, one has to ask how the oligarchy formed in the first place and why DOJ seldom, if ever, brings anti-trust cases.
So the stage is set for the case against Google. But it’s a stage where the final curtain has already been lowered.
The Google Trial:
“The trial will center on whether Google quashed competition by paying Apple (an estimated $8 billion to $12 billion a year) and other companies to be the default search provider on their devices and products, and deterred users from accessing rival services in the process … it also accuses Google of illegally requiring its Android device partners to preinstall other Google apps, such as Maps and Gmail, something the company has denied.
“Two core claims will proceed: that Google harmed competitors through “exclusionary” agreements with Apple and other partners, and that it acted anticompetitively with its search ad tool Search Ads 360.
“Much of the trial’s outcome will be predicated on whether the deals Google made to promote its search engine excluded healthy competition.”
Despite all the tough talk, the trial will provide some limited insight into the attitude the US Department of Justice has about technology competition:
“Over the last few years, big tech companies have become a favorite target of antitrust regulators and lawmakers. Facebook parent Meta has long been scrutinized for its acquisitions of competitors like Instagram and WhatsApp, and the FTC tried and failed to bar Meta from acquiring the VR startup Within. Congress has called out Amazon’s private-label business, which sells Amazon brands of clothing, food and consumer goods like batteries and diapers.”
Ultimately the Trial Won’t Matter
While the Google trial will shed some light upon DOJ’s attitude about technology oligarchies, it will not in any way restructure the industry. It’s a tiny shot across the huge bow of an industry that powers the US and in large measure the world. Does anyone really believe that the US government would disrupt the industry that provides its global competitive advantage? (Not to mention all of the “relationships” politicians have with the oligarchs.)
The results of the trial – assuming Google “loses” – will be a settlement that requires Google to make it easier to switch search engines – even though it’s pretty easy to do so today. In other words, a slap on the wrist that will barely be felt. Even if Google loses, we’re looking at years to resolve the case. Along the way, there might even be some limited sanctions if Judge Mehta gets mad at Google about some “missing” evidence.
How much of all this is optics? Or the fulfillment of some long-forgotten campaign promise? Or a serious attempt to burst technology oligarchies? You decide. But the idea that DOJ would transform the behavior and structure of its largest industry in ways that displease the industry (and those who benefit from the industry) is naïve.
Think about the Microsoft case decades ago – a process precedent DOJ is relying upon here – and way before the tech industry was the juggernaut it is today:
“The government initially won that case in the district court, which included a decision to break up the company. This was overturned on appeal, and the case ultimately ended in a settlement where Microsoft agreed not to block rival software companies in its contracts with computer manufacturers … several state attorneys general objected to the agreement, saying it did not go far enough, but it was rejected.”
Prediction? An “acceptable” settlement that in no way threatens the oligarchy. A settlement that bloodies Google’s nose (just enough) and gives DOJ something to brag about. But we’ll have to wait some time for all this to resolve itself and by that time we’ll all be worried about how AI has already transformed everything.
Read the full article here
