Is Google a self-regulatory public servant or rapacious and unscrupulous monopolist, asked Eric Clemons, professor of operations and information management at The Wharton School, during a talk at the Supernova conference in San Francisco today.
Clemons drew a parallel between Microsoft’s ability in the 1980s and 90s to use its dominant position in one market, operating systems, as leverage to control and dominate another, the browser market. Microsoft’s Internet Explorer browser bundled with its OS killed Netscape, a competitor in the browser market. This anti-competitive, monopolistic power was the basis of the DOJ’s case against Microsoft.
A decade later Google has 70% of the market for internet search, is launching new products like gmail, calendaring, office apps, mobile operating systems, laptop operating systems and a cloud computing development platform, all making headway in the market and in some cases knocking out established players. Ironically, Google beat Microsoft to a contract for outsourced email and calendaring in Japan recently by bidding 40% less than Microsoft wanted for the renewal of that contract. Touche! Indeed. But it’s bitter sweet.
Clemons belives Google will face increased scrutiny by the DOJ for its potentially predatory monopoly, in a non-contestable market, that could harm the competitive process and will likely kick-off an anti-trust suit against the company.
I think the real message in the professor’s comments is that the high-tech industry moves so fast that it lends itself to monopoly and that market players need to be aware and know when they are in danger of a Google or Microsoft jumping in.
For instance, watch Mircosoft’s Windows Azure cloud computing development platform. This could do for Platform as a Service what Google did for search.