Just Too Good

What do you do when a company is just too good at what it does?  This question seems to be looming in the heads of antitrust authorities throughout the European Union, where a new complaint about Google’s assertive practices has emerged.  Google has recently been in the spotlight for its practices regarding search engine results, with websites claiming that Google did not react positively when their requests were denied.  After a 19-month investigation, the Federal Trade Commission has decided that Google’s search engine in fact did not violate any relevant antitrust laws.

This new argument once again places Google in the forefront of the antitrust spotlight in Europe, where the search engine controls about 90% of the market share, compared to about 70% in the US market.  The argument is that Google demands prominent placement of its search app, as well as its associated apps (such as YouTube, etc.) in new cell phone devices running the Android platform.  There are several parties involved in the inquiry, including Nokia, Microsoft, and Oracle, under the auspices of a union called Fairsearch Europe, which aims to dismantle Google’s dominance in the European search engine market.

The article raises an important point that cannot be easily dismissed: why should someone be punished for just being better than their competitors? First, it seems a bit hypocritical that a company as massive as Microsoft should take part in a complaint regarding antitrust activities when they were in fact the culprits of some of the worst examples of this behavior in the past.  Furthermore, it seems reasonable to assume that Google is going to exert its market force to ensure that its products receive the best possible placement possible– doing anything else would seem a bit silly.

During our discussion of Dell in class, we came to an understanding that Dell was able to secure almost immediate delivery of hardware parts from its suppliers, with payment delayed for 30 days, simply because it was Dell– it was big, had the power to cause competition between hardware parts suppliers, and its name was enough to ensure that they got what they asked for (same with WalMart).  Similarly , by demanding that its apps be placed in a prominent position on Android devices, Google is simply exerting its dominance in the area.  google-ios6-maps

Another consideration to keep in mind, at least in my opinion, is that Google’s apps have consistently been the best at what they do– can someone be punished for being the best?  As the iOS 6 rolled out, it became quickly apparent that Google’s map app was significantly more reliable than the built-in iPhone map app.  Similarly, it is reasonable that Apple would want to promote its own products, which explains why the Google Maps app was no longer a default app on its devices.  The choice for consumers continued to exist, however, as the Google Maps app could be downloaded from iTunes.  Similarly, despite Google apps being default on Android devices, the choice finally lies in consumers’s hands.  They have the choice of choosing to use a different app that performs a similar function by downloading the relevant option from the Android App platform.

As the issue of Google’s antitrust behavior continues, I think it is important to always consider whether Google is in fact destroying competition unfairly, or whether its products are just so good that new entrants fail to capture the public’s attention and interest in their own products.

http://www.nytimes.com/2013/04/09/technology/09iht-google09.html

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8 thoughts on “Just Too Good

  1. I agree to a certain extent with the fact that you cannot punish a company for exceeding the success of their competitors. I do agree that monopolies are not a fair and just way to run a competitive market and anti-trust prevention is key to capitalist markets. Yet again, if the competitors do not even compare with the quality of their products or services, you cannot blame the leading companies for succeeding. When you look at Google, their goods are truly superior to their competitors making it easier for me to accept their success that trumps their competitors.

  2. I like how you related the argument to the Dell case we studied in class. I believe that monopolies are not fair, but if there’s no level of malice, how can you punish a company that simply does well. Google is good at what it does and this should be praised and admired. It shouldn’t be under constant scrutiny just because it controls a large percent of the market share. As my law professor says “Having a large percent of the market share because of a superior product or consumer preference is NOT a monopoly”. Keep in mind that a monopoly is PURPOSEFUL conduct to exclude competitors. When you’re good, you’re good. I thought the maps picture was very funny! You could have included some more graphics.

  3. This article is very well written and I like how you discussed both sides of the question, is Google turning into a monopoly or does it just have superior products? In my opinion, I believe that Google is treading this fine line and that it should be taken a closer look at. While I don’t know the exact details of the case and about the investigation from the Federal Trade Commission, I don’t think it’s right for Google to offer a free open source operating system, Android, but then “demand prominent placement of its search app, as well as its associated apps (such as YouTube, etc.) in new cell phone devices running the Android platform”.

  4. I agree that Google should not be punished for excelling at what it does. Google provides an amazing product that customers want to use. I think that is also part of the reason why Google should not be punished. Not only is their product the best, but consumers want it the most. Google is probably the best search engine available and consumers want to use it. No one ever says “I’ll Bing the answer” or “I’ll Yahoo the answer.” People have other options but overwhelmingly choose to use Google.

  5. Like you said it is crazy to think that Google should not be trying to get their apps on these android platforms because that would give them the most competitive advantage. Google also has the best functioning apps and ones that everybody would want to download anyway (youtube) so it’s just saving the person the time they would have taken to go to the app store and download it. It is so disappointing to me whenever I see restrictions or anti-trust lawsuits on these monopolies because like you said, they are just better than the competition. Plus, as it stands now I do not have to pay to use google or any of its subsidiaries, so it wouldn’t be the case that because they are a monopoly they could manipulate price. Thanks Pablo for bringing this topic to light because it is always fun to talk about Google and you did a good job bringing it back to what we learned about Dell in class.

  6. I completely agree that Microsoft has no room to complain about Google whatsoever. I also believe that big companies deserve the large amounts of business they continue to receive if they have been ethical in all their ways. No business ever has an advantage in becoming successful, so they shouldn’t be punished when they have created something that is truly exceptional and well liked by consumers. Like you said, Google apps have always been truly exceptional and well liked. Apple’s own maps on the iPhone were indeed despised compared to the previous Google version. Actually, I’d love for Google to give Apple a run for their money in even more ways.

  7. This blog post was very well written. Your analysis of the issue was on spot as you brought up many good points. I agree with many of your ideas. The question of whether Google is acting unfairly or just that good is very interesting question. I do not even think of Google’s impressive market share most of the time because I do not use any other search engines. The point you brought up about Google’s map app is very astute.

  8. Interesting issue. You raise a very relevant issue in today’s world, and also made a nice connection to Dell at the end. However in Dell’s case, they were really good at doing one thing. However, when they were mimicked, that was the end of an empire. Google is also really good-but at doing multiple things. It is a search engine, it has maps, apps, a homepage, now google “glass”, it’s a verb, the list goes on. So maybe it learned from Dell, it cannot be mimicked. But do you think Google is spreading itself too thin?

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