Google Was 3 Hours Away From DOJ Antitrust Charges 221
turnkeylinux writes "Google Inc. and Yahoo! Inc. called off their joint advertising agreement just three hours before the Department of Justice planned to file antitrust charges to block the pact, according to the lawyer who would have been lead counsel for the government. 'We were going to file the complaint at a certain time during the day,' says Litvack, who rejoins Hogan & Hartson today. 'We told them we were going to file the complaint at that time of day. Three hours before, they told us they were abandoning the agreement.'"
Re:Could be fun (Score:5, Insightful)
The only downside is it's a waste of tax payers cash, not that most public sector jobs aren't a waste of tax payers cash anyway though.
On the contrary, breaking up formed monopolies is a lot more expensive than preventing monopolies from forming in the first place.
(on a side note: for those who thought Google was any less predatory than Microsoft, think again...)
The DOJ won't help (Score:5, Insightful)
1. Google and Yahoo could partner, leading to a monopoly.
2. Yahoo will go out of business, leading to a monopoly.
There is no way to prevent a monopoly.
Re:Could be fun (Score:5, Insightful)
Quite the opposite. The authorities were on the ball, gathered info and told the parties they'd likely be filing a formal complaint. The result: the putative monopoly was broken up almost before it began, with no damage to the marketplace and no long, hugely expensive trial and appeals that would have sucked money and energy from the state and the corporate parties alike. And the way they did it, if Google and Yahoo really thought they would win such a process they were still free to go ahead and face the consequences.
Sounds like the state did a pretty good job in this case.
Re:The DOJ won't help (Score:5, Insightful)
Re:The DOJ won't help (Score:2, Insightful)
If Google got hold of Yahoo a company with market dominance to form a Monopoly WILL be formed.
If they don't merge, and IF Yahoo go under, and IF Yahoo isn't bought out by Microsoft or a less obvious Internet competitor (News Corp? Facebook? etc) who continue it and finally IF all Yahoo users choose to migrate to Google, then you would have a Monopoly.
I accept it could be argued both situations may well lead to the same situation, but the odds would be quite different.
Re:The DOJ won't help (Score:3, Insightful)
Re:Why doesn't... (Score:2, Insightful)
Free Market + Government Intervention & Punishment + Taxpayers Dollers = LOLFAILWHALE ECONOMY
Free Market + Government Suggestion & Aid + Taxpayer Dollers = Working Economy
A "hey, we're probably going to have to sue you if you do this" seems equally like "suggestion" to me. This is part of how the contours of what's permissible and what's not get drawn, and companies in the future will look at this and say "Google and Yahoo went this far, but got warned off. To what extent is our deal like that one?"
They'll have problems from now on. (Score:4, Insightful)
Re:Where did it go? (Score:5, Insightful)
The free market relies on companies not becoming monopolies.
Not quite. The free market relies on companies not *leveraging* their monopolies.
Re:The DOJ won't help (Score:3, Insightful)
Also, Google doesn't provide a proprietary service by any means. You don't NEED www.google.com to do your job, open your documents, or run your applications. At least, not right now.
At any point in time, someone else could create a better search algorithm and steal users away from Google's search, ads, and possibly email. (Though I kind of wish some free services like Bigfoot.com would have stayed around as a mail redirector so you could change mail providers on a whim. [Disclaimer: I haven't checked in a while.])
Comment removed (Score:5, Insightful)
Re:Where did it go? (Score:5, Insightful)
Re:Could be fun (Score:5, Insightful)
Companies like GM and AIG were allowed to grow to the point where their possible failure threatens the entire national (world?) economy -- no questions from DOJ lawyers.
But Google and Yahoo want to pool their advertising resources, and suddenly the republic is threatened.
Mmm hmmm.
Re:Where did it go? (Score:5, Insightful)
Something that is often forgotten is that the free market is NOT a natural phenomenon. When left to their own devices, the businesses will try to fuck the consumer, and the consumer who has virtually no individual power, will seek consumer rights via collective bargaining, eventually forming large concerted organizations that will act against the interests of the business. In other words, there are checks and balances in play, and the government's part in regulating the economy was created as a check against businesses seeking to overpower the public.
There are few if any free markets in the world for a good reason. They don't work. If you want to find a free market, you can look towards Somalia, no government interference there.
Re:Where did it go? (Score:2, Insightful)
The American idea of "Free Market" is kind of like "Free Software". Basically the goal is to have everyone play nice and have an equal chance to contribute and so on. Nothing about that precludes government regulations. SOME people insist you should have an "anarchic market" and then go around calling it "free".
Fact is, people need rules. They're a fundamental part of society once you go beyond a certain population size. Without them you get anarchy, which is only bad when there are bad people. If everyone just loved everyone else then we'd be peachy. But then you get stupid things like wars based on race, religion, ideals, or just flat out greed. That's reality. That's life.
Some think you can change it, but they're delusional. Unless you are willing to trample over someone's rights and reprogram them (which to me the idea is worse than rape, though not by much) you are going to have people that will just see that as weakness and, like a predator, act accordingly.
The real trick in my opinion is to have AS FEW laws/regulations as possible. The US started out pretty damn well like that but has been slowly corrupted over the years. I'm fairly certain the Founding Fathers would be among those that speculate a revolution or civil war in the US within the next 100 years. Considering the level of military might the US has, that is a pretty damn scary thought.
Re:Why would Google acquire that dinosaur? (Score:3, Insightful)
Look at the search market share to see why.
a combined Yahoo-google alliance would have control around 80% of the market. (google holds around 60-80%, yahoo around 10-15% depending on the source)
A Yahoo-Microsoft deal would only control around 20-30% of the market share, still short of what google already has and thus the DOJ would view MS in this area as making itself more competitive.
A very diverse company like MS is treated as though it was sepperate companies, their monopoly in one area does not impact or affect their status in another. Their desktop monopoly does not give them any leverage here so it doesn't apply or affect their decision.
Re:Could be fun (Score:3, Insightful)
You think that Microsoft would've backed down?
This is not predatory behaviour; they wanted to something, were told they shouldn't, and then backed down.
That's how I expect a good corporate citizen to behave.
Re:Where did it go? (Score:5, Insightful)
You might think it would be dumb, but if you're providing something like an Operating System for computers everyone buys, who cares if you provide what the consumer wants or not when you can essentially force them to purchase it anyway?
People who believe in truly free markets often ignore the barrier to entry for competition. Competition is not a given, and competition may be essentially impossible under some circumstances (the local telco's owning all the copper and poles and rights thereto and new competition not having the right to erect new poles).
Re:Could be fun (Score:5, Insightful)
Of course, that is assuming that there is some need to break up a 'monopoly' in the first place.
The sad thing is the proof of the need for antitrust laws has been staring us in the face for months now. Since the bailout of AIG how many times have we heard the phrase, "too big to fail." How many companies are now trying to convince us that they also are too big to fail? In effect these companies are telling us that they represent a single point of failure for the entire US economy.
The leftist view that we need to prop up these companies is completely wrong. The righties' hands-off approach to all things private inevitably leads to wild fluctuations as companies consolidate and dominate government and individual roles followed by epic collapses and rebuilding periods.
Those that worship at the alter of the free market either don't understand: 1. That competition is the heart of capitalism, or 2. Companies hate, and will suppress, competition because it cuts into profits.
The government should play a role in enforcing competition in a healthy market place. Too much government intervention leads to inefficiency and no government intervention leads to corruption. It is through the involvement of an INFORMED electorate that WE THE PEOPLE control how our government interacts with the private sector.
I say use the bailout money to break these companies up into more manageable and competitive pieces that, once established, will be made into private companies again.
Boiling your opinions down to oversimplifications like, "no government intervention ever!" is an excuse to remain uninformed and ignorant of what the problems actually are and will lead us away from any real solutions.
Both parties spend large sums of money on propaganda campaigns through right and left wing media outlets to convince us of the correctness of their oversimplified slogans and misrepresentations of the other side. If you believe them, know that you are being used.
Re:Where did it go? (Score:3, Insightful)
Re:Could be fun (Score:5, Insightful)
No, what Google and Yahoo were planning to do was to stop competing with each other and from a joint venture. That is specifically prohibited under the anti-trust laws. Obtaining a monopoly through fair competition is legal in the US. Obtaining a monopoly or dominant market position by forming a cartel with competitors is not.
It is very different from what Microsoft was accused of which in turn was rather different from the anti-competitive behavior that they engaged in. David Boies botched the Microsoft anti-trust case from the start. He brought it on the basis of complaints from Sun and Netscape that were really more about providing an alibi for their own incompetence than justified compaints. Netscape's treatment of Spyglass was vastly more aggressive than Microsoft's treatment of Netscape. Sun could have partnered with Microsoft to establish itself as a viable alternative to Intel. Instead they tried to challenge Intel and Microsoft at the same time.
Netscape was giving the browser away so that they could sell a server that exploited exploit the latest essentially proprietary features of their client. By essentially proprietary I mean their habit of releasing a product and submitting the 'standards proposal' to W3C on the same day with no prior discussion whatsoever. That is how cookies were deployed, that is how SSL was deployed and that is how Javascript was deployed. And in every case the Netscape version was initially broken in ways that have taken years to fix afterwards. If you tried to use Javascript in 1995 it was much more likely to crash your browser than do what was intended.
Now if the DoJ had concentrated on the pricing of Windows they had a real argument. The unit pricing scheme was certainly anti-competitive. But giving away the browser with the O/S was not anticompetitive, the browser was originally intended to be free software that shipped with the O/S. tim Berners-Lee proposed the deep integration into the O/S.
Re:Could be fun (Score:2, Insightful)
Speaking personally, I know I'd much rather have the police come up to me when I'm about to commit an illegal act and tell me that they plan to prosecute me if I go through with it, rather than wait for me to actually do it and then haul me off to jail. But maybe I'm just weird that way.
Re:Could be fun (Score:5, Insightful)
A healthy industry is one where two or three (or more!) participants share equal or near equal mind-share (and market-share). A dominated (but not monopolistic) industry is where the #1 supplier has nearly 2/3rds marketshare, the #2 supplier is nearly 1/3rd, and a bunch of niche players round up the rest. A monopolistic industry is where the #1 supplier has 80%+ (or 90%+) of the market, and there is no widely-recognised #2 player (which is why Microsoft was so insistent that Macs were real competition). That doesn't mean that you're alone in the industry (though when you are, it's more obviously a monopoly), just that practically speaking, you are.
Is there a widely-recognised #2 in the search market? If that's Yahoo! (and especially if there is no widely-recognised #3), the marketing campaign would treat the industry as a monopoly - using their combined power monopolistically, and, so alleges the Justice Department, illegally.
Google is not a monopoly (yet). But it is close. However, if you combine Google and Yahoo! into a single marketing campaign, their combined power probably is monopolistic. All the other search engines are niche players that probably don't generate noticable amounts of traffic (relative to Google and Yahoo! combined). The Justice Department merely is saying, it seems, that, no, you two can't gang up and demolish the niche players.
By keeping #1 and #2 at each others' throats, the niche players can be ignored by the big guys and thrive, albeit at a smaller scale. If #1 and #2 play nice with each other, they can turn on the niche players and destroy them. That changes from capitalism/competition to monopoly, and that's what the Justice Department was trying to prevent.
Re:Where did it go? (Score:3, Insightful)
"The newly-created one that has the huge incentive of customer demand for cheaper products. "
wow..simply..wow.
completly ignorant of reality to say that.
OK, your create said company. Now you need to crack the monopoly. What's that, you look like you have a shot? ok, now the coluding companies drop there price below your, you go away, and they jack up there prices.
You should really study up an large company behavior during the beginning of the 20th century to see where this leads.
Ther was a time when there was no regulation, regulation came about becasue of monumental abuse.