Posted on 29/Feb/2016
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Until EU Competition Commissioner Margrethe Vestager got very serious about Google antitrust enforcement this past year, previously negligent antitrust enforcement authorities facilitated a dominant Google search and search advertising business

Wake up world, you’ve been disintermediated.

Google now essentially stands between you and most everyone and everything on the Internet.

Google’s dominant search engine + its dominant Android operating system (OS) + its world-leading Chrome web browser + its uniquely-comprehensive, Internet utility functionality of 193 products, services and tools = a virtual Google “Inner-net” regime.

Google’s Inner-net has practically assimilated most all of what the public open-source WorldWideWeb does for Internet users and much, much, more.

And it also has practically insinuated Google-controlled code into a virtual intermediary position between most everyone and most everything on the Internet.

It is telling that the WorldWideWeb’s first HTTP network protocol update since 1997, HTTP/2, was based upon the Google-developed, SPDY protocol.

Think of the WorldWideWeb increasingly as the public and open façade of the Web, and Google’s Inner-net as Google’s private, and more closed regime of mostly-dominant, Google-controlled operating systems, platforms, apps, protocols, and APIs that collectively govern how most of the Web operates, largely out of public view.

This makes Google your de facto global governing gatekeeper technically for most all things Internet, if you are an Internet platform, network, business, competitor, advertiser, service provider, manufacturer, content provider, app developer, stakeholder, group, or user.

In other words, one now must go through Google-controlled code somehow to virtually access most all competitive Internet information, apps, devices, software, APIs, networks, the cloud, the Internet of things, etc. — going forward.

And the Google gatekeeper’s gazillion gates tend to remain open and free for only as long as it takes for Google to become dominant in the new targeted area, and then Google tends to close those supposed ‘open’ gates with default settings that favor Google. Google’s default dominance rule-of-thumb is that ~90% of users automatically acquiesce to new Google default settings.

What an epic failure of antitrust enforcement this is.

The FTC obviously facilitated Google’s dominance in approving its acquisitions of DoubleClick and AdMob, and in suspiciously shuttering its Google search bias and Android tying investigations shortly after the 2012 Presidential election.

Remember the Clinton Administration DOJ blocked the Microsoft-Intuit acquisition in 1995 which prevented the vertical-ization of Microsoft’s OS dominance of the tech sector into other sectors, and successfully sued Microsoft in 1998 for monopolization in bundling its Internet browser into its dominant Windows operating system.

Until EU Competition Commissioner Margrethe Vestager got very serious about Google antitrust enforcement this past year, previously negligent antitrust enforcement authorities facilitated a dominant Google search and search advertising business by approving challenged acquisitions that later proved anticompetitive, and facilitating monopolization of the mobile operating system market by ignoring the anticompetitive bundling ramifications of its dominant search business being contractually tied with Android, Chrome, YouTube, Maps, Play, Gmail, etc. via Android OEM contracts.

Commissioner Vestager’s expected decision in the coming weeks that Google search is indeed dominant at >90% EU market share, and that it has abused its search dominance in preferencing its own shopping service over competitive shopping services, likely will prove to be powerful precedents for the queue of EU and private antitrust complaints lined up to build upon them.

The biggest development everyone appears to be ignoring is the huge anticompetitive implications of Google’s plans to consolidate its Chrome browser-based operating system with its Android mobile operating system this year — per WSJ reporting.

Simply, folding Chrome’s browser-based OS into Android’s App-based mobile OS would create one global, heavily-bundled, Google Inner-net operating system that could auto-default to Google’s: Search, browser, ad-tech platform, Analytics, Translate service, Gmail, YouTube video distribution, Map location services, RCS multimedia messaging services, Apps, Play store, etc.

And Google’s Inner-net operating system default search and browser could then preference or auto-suggest any or all of Google’s 193 products and services including: 23 search tools, 10 advertising services, 33 communications and publishing tools, 15 development tools, 13 map-related products, 7 operating systems, 11 desktop applications, 46 mobile applications, 27 hardware products, and 8 general services.

This pending sweeping opportunity for Google to much more broadly self-deal or preference Google platforms, apps, products, services and tools over competitors’ offerings raises the stakes on whether  Commissioner Vestager’s remedy for Google’s abuse of search dominance case will require Google to abide by a firm, enforceable, and accountable, non-discrimination-principle-remedy, like the EU made Microsoft abide by for several years in its antitrust remedy for Microsoft anticompetitively favoring its Explorer browser over competitive browsers.

Ironically, Google will have an especially hard time credibly opposing a future mandate of an EU non-discrimination-principle-remedy for tying its current market-leading Chrome browser to its dominant Android mobile operating system.

That’s because in 2009, Google’s current CEO, Sundar Pichai, helped publicly lobby the EU in a Google blog post stating: “Internet Explorer is tied to Microsoft’s dominant computer operating system, giving it an unfair advantage over other browsers.Compare this to the mobile market, where Microsoft cannot tie Internet Explorer to a dominant operating system, and its browser therefore has a much lower usage.

In sum, as critically important as the EU’s final decision is on Google search dominance and its abuse of dominance in Google shopping for online businesses dependent on search, the EU’s Android OS tying investigation is as critically important to offline businesses that Alphabet is targeting with disintermediation going forward: ISPs; automakers; manufacturers of drones, robots, wearables, and home energy/automation devices; and biotech, health care, and finance-related companies, among others.

In a nutshell, Google search and search advertising is about dominating the virtual world of the Web and online content of all kinds. One the other hand, Google’s Android operating system/browser is about also dominating the real world of all IP-enabled devices, vehicles, drones, robots, networks, sensors, cameras, microphones, wearables, implants, and the Internet of things.

Any industry in the real world targeted by Alphabet for disintermediation should ask industries in the online world what it is like to try and compete against an unaccountable, dominant, Google global-gatekeeper and biased-broker that self-deals with impunity.

Forewarned is forearmed.


Picture Credits: Danny Oosterveer