Dan Solove pictures a world where Google eventually rules the universe. For reasons unknown, I'm not disturbed. I imagine that at one time (or at several times), others must have thought the same thing about AT&T. AT&T controlled individual access to most information through the telephone, the telephone lines, telephone service, and the phone book. Over time, through the intervention of legislation, the courts, or markets, we came to a point where we have more options about all of those things. AT&T at points tried to branch into other, related services, such as radio, but never became a lasting empire. So, what does the future hold for Google? I guess that markets will eventually intervene. Google's hold on the world does not seem to depend on patented technology, government licensing, or a natural/unnatural monopoly. Google's hold (for now) depends on creative marketing, innovation, quality product, and path dependence. An innovative competitor can overcome these things in time.
One interesting question that I will leave to antitrust experts, though. Much of the decreased dominance of AT&T came about via the DOJ. I cannot imagine in modern times the government interfering with a "natural monopoly" in such a way. The DOJ was not able to beat Microsoft, after all.
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1. Posted by Robert Schwartz on October 20, 2005 @ 18:38 | Permalink
AT&T was a monopoly became they had legal franchises to exclude competitors from the telephone business. There was nothing natural about it. MCI was the first company to mount a business challenge to the Bells, and it took a massive legal and legislative effort to put them in the game. The anti-trust case that lead to the break-up was begun after MCI was in business and beginning to make some inroads.
2. Posted by Joshua Wright on October 21, 2005 @ 16:48 | Permalink
"The DOJ was not able to beat Microsoft, after all."
Not so fast :) The opinion I read says that Microsoft violated the Sherman Act. This did not stop both sides from claiming victory, and perhaps the DOJ didn't ultimately "win" if one defines victory as splitting up the company. Of course, winning should mean that the decision was good for consumers in some sense, and I am very skeptical that this is the case.
Nonetheless, my point is that the D.C. Circuit opinion still says that Microsoft's aggressive distribution and marketing tactics into complementary markets are not "competition on the merits" and violate the antitrust laws. For better or worse, this opinion scares me if I am Google for a number of reasons.
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