Wednesday, July 10, 2013

The Google "Monopoly" vs. True Monopolies

Google is not a monopoly, as the NJ Star-Ledger claims in Google's Growing Monopoly. A true monopoly entails the ability to forcibly forbid competition. The editors write:

   Just 14 years old, the company has become a $200 billion behemoth and borders on a global internet monopoly. Beyond search — where Google owns 70 percent of the U.S. market, 95 percent in Europe — its domination includes video (YouTube), mobile (Android) and web browsing (Chrome, Firefox). It’s challenging Face­book (Google+), selling smartphones and laptops (Chromebook), and is working on computers worn as glasses and wristwatches.   In the United States, 76 cents of every online ad dollar goes to Google.

Yes, Google is a great company. Their growth to $200 billion was achieved by successfully competing in the market, not by hiding behind legal protection from competition.  That's not what the editors want you to conclude, of course. They want you to cower in fear of the "behemoth" Google--a behemoth created by free consumer choice.

The editors also hint darkly against "this monster," which it accuses of "invading users' privacy" and "scraping of personal information from home WiFi networks." Maybe there's something to it, but that is a legal matter that has nothing to do with the issue of monopolies.

There is only one institution that can create true monopolies--the government. That's because only the government has a monopoly on the use of physical force, by means of its law-making powers which people are compelled to obey under threat of armed assault by government agents. No private company has that power. The US Post Office, for example, is a true monopoly: No other company is legally allowed to compete with it in first class mail.

If the editors were truly concerned about monopolization, they would focus their attention on the government's growing abuse of its lawmaking monopoly, which is increasingly used to violate rights of innocent people rather than prosecute criminals and protect rights. They would use this year's 100th anniversary of the Federal Reserve System to call for its elimination. It destructive monopoly over the monetary system is entrenched by legal tender laws

The editors would also be beating the drums for an end to the destructive government "public" school quasi-monopoly, which gains its "customers" and stifles competition by compulsory taxation and compulsory attendance laws. 

They would fight against the government's growing monopolization over healthcare, including their beloved ObamaCare with its myriad boards and committees wielding the power to decide who gets what kind of health care and health insurance and when. 

And don't forget the local electric utility and, as noted, the US Post Office.

If the editors are truly concerned about privacy issues and information gathering and how it is used, it should recognize that the government is the elephant in the room that we all should be worried about. Unless Google uses its information for criminal purposes like extortion or blackmail, it has a moral right to profitably  "leverage" its information gathering prowess as it sees fit, so long as its information gathering techniques do not violate rights (this is a complex legal matter). 

Leave Google alone. It has done nothing wrong but successfully compete in the freest market in the world--the internet. When people decide that they would be better off patronizing some other company or venue, Google's "monopoly" will disintegrate as fast as IBM's dominance in mainframes dissolved in the face of the personal computer revolution. 

And while we're at it, we should advocate for the complete abolition of the antitrust laws, whose sole purpose is to empower government control over private business, penalize success and ability, and enable less successful competitors to gain by government force what they couldn't legitimately gain in the marketplace. The editors worry about "the impunity with which Google does business." The impunity with which government wields its power is the real danger.

Related Reading:

My published letter-to-the-editor: Google not a Monopoly
What Are the Search Results When You Google 'Antitrust?',  by Thomas A. Bowden

Antitrust Prosecution of Apple is Rotten

Apple followup: Barbara Straniero's Mistaken Understanding of "Free Market"

No comments: