NYTimes posts on France's declaration of Google a monopoly.
Google Ruled a Monopoly in France
July 2, 2010, 3:53 AM
From Floyd Norris in his latest High and Low Finance column:
It is fun to run a monopoly. But in the long run, it can be a lot less enjoyable to own one.
Why?
Companies change as they grow larger and more profitable. Bureaucracy and success slow innovation. Will this new product hurt an old one? If so, should we delay, or price it very high? Old monopolists find themselves outrun by newer companies with no stake in the old ways.
What did Google do?
In a preliminary ruling, the Authorité de la Concurrence said that Google's Adwords system, which prompts ads to appear alongside search results, lacked transparency and "resulted in discriminatory treatment."
The ruling followed a complaint by Navx, a French company that provides data on the location of road traffic speed cameras and petrol prices, as well as other services and content for GPS devices. Navx said its ads were removed without warning from AdWords in 2009, and accused Google of anti-competitive practices.
Google said the reason for the disappearance of the Navx ads was a change of policy in 2008, when it decided no longer to promote services helping people to avoid speed cameras and fines.
The issue being debated is whether Google has the rights to limit a French companies business model.
"The competition authority is saying that Google has a dominant position," said Ron Soffer, Navx's lawyer. "When you have that position you can't just do what you want."
Google is confident it is in the right.
A final decision is expected in September, and a Google spokesman said the company remained "confident of a positive outcome."
But this is politics and gov'ts around the the world are looking for ways to regulate Google.
IBM was one of the first high tech companies to have monopoly problems.
However, IBM's dominant market share in the mid-1960s led to antitrust inquiries by the U.S. Department of Justice, which filed a complaint for the case U.S. v. IBM in the United States District Court for the Southern District of New York, on January 17, 1969. The suit alleged that IBM violated the Section 2 of the Sherman Act by monopolizing or attempting to monopolize the general purpose electronic digital computer system market, specifically computers designed primarily for business. The case dragged out for 13 years, turning into a resource-sapping war of attrition. In 1982, the Justice Department finally concluded that the case was “without merit” and dropped it, But having to operate under the pall of antitrust litigation significantly impacted IBM's business decisions and operations during all of the 1970s and a good portion of the 1980s.
Microsoft monopoly history is well known.
Google is next.