Google Consolidating its Dominance at Unprecedented Rates - 2012-2015 Chart

The modern world has never before seen a company with the scale, scope, reach and speed of Google’s business dominance. Expect Google’s antitrust problems to proliferate with its proliferating dominance and abuses.

Google has extended and consolidated its unprecedented dominance at unprecedented rates over the last ~three years.

No other company has ever grown several separate and very different, stand-alone verticals simultaneously, by several hundred million users each, in less than ~three years.

Specifically in about three years, Google has augmented at least the following seven product verticals by the following number of users: translation by ~300m; maps by ~400m; video by ~600m; email by ~650m; app store by ~750m; operating system by ~750m; and browser by ~800m. Please see this sourced, one-page, chart of “Google’s Dominance Consolidation.”

These are not organic competitive market outcomes.

They could only be the synthetic results of exceptional leveraged market power and powerful inter-network effects. For example, via Android tying/bundling these apps/services listed above on the home screen of Android devices via manufacturer contracts called Mobile Application Distribution Agreements (MADA).  Another example, via Google’s forcing integration of a new unified privacy policy without user consent and increased Google mandates for users to sign-in to a Google omni-account in order to use or to interact with many of Google’s most popular services, like those listed above. 

Google begs to differ.

Google recently blogged, that the EU’s antitrust case against Google, which charges that Google is dominant in search and has abused its dominance by favoring its own shopping comparison service, is “wrong on the facts, law and economics.” 

Translation: Google’s position is that 90+% search share should not be considered dominant factually or economically in Europe for the legal purposes of imposing a non-discrimination remedy, because that would require ~100% market share of an essential facility. (Never mind that Google Chairman Eric Schmidt once bragged "Our model is just better… Based on that, we should have 100% share.”)

Why does Google delay and deny everything about its dominance and abuses of dominance?

First, Google understands the value of conceding nothing and delaying always. Just as time is money, Google knows to them, time is dominance consolidation.

Second, Google understands the adage that possession is nine tenths of the law. So Google is racing to tie-up and lock-in as many users as fast as possible, knowing that will afford Google more PR, political, economic and legal leverage, and that it will make law enforcement and its remedies harder and more protracted going forward.

Third, Google understands the adage that justice delayed is justice denied. Google’s most-practiced corporate legal defense team in the world has learned from its world-leading legal defense experience --that stonewalling works. They have outlasted, exhausted and depleted many legal foes: the Texas and Ohio Attorneys General, the FCC, the FTC, Viacom, and many others.   

Fourth, Google also understands, and has mastered, sovereignty arbitrage. As the world’s lone virtual superpower, Google can, and has, ignored other countries’ sovereign accountability by touting that other countries users can evade that countries laws simply by using rather than that country’s domain extension, just like they have done in flouting the EU’s Right to be Forgotten law. Simply, Google increasingly acts in a supra-sovereign manner.    

Fifth, Google understands the value and appeal of a unified Digital Single Market, so it is racing the European Commission to create the ultimate unified Digital Single Market, i.e. the consolidated Google Internet omni-platform, before the European Commission can.

Sixth, Google understands that the best defense is a good offense. That’s why Google demonizes their foes as anti-consumer, anti-innovation, and protectionist with an innocent smile, while most-skillfully, self-lionizing Google with a steady flow of PR about how Google is the answer to most all of humanities ills, like death, driving, sub-Gigabit Internet, and thinking for oneself. 

Why is 2012-2015 a relevant timeframe to consider here?

First, May 2012 was when EC DGComp Almunia first threatened to issue a Statement of Objections concerning Google’s search dominance and abuses of its dominance, and April 2015 was when EC DGComp Vestager issued a formal Statement of Objections on Google’s search dominance and abuse, and announced it was formally investigating Google’s alleged abuses of Android dominance.

Second, Larry Page was CEO of Google from 2011 to 2015 so 2012-2015 is a good interval to judge his relative business impact.

Third, 2012-2015 is roughly the period the FTC has seen no legal problem with the search advertising dominance that the FTC allowed Google to acquire via its DoubleClick and AdMob acquisitions, nor with the 90% mobile operating system market share that the FTC was integral in helping Google Android to accumulate. That’s because the FTC previously decided that privacy should not be considered a competitive factor relevant to antitrust enforcement. Effectively that meant that users’ private data had no commercial value to protect from anti-competitive behavior.

In sum, Google has vastly more scale, scope, reach and speed, than the world’s antitrust authorities have ever been confronted with before. And Google is currently extending and consolidating its unprecedented dominance at unprecedented rates.

Most importantly, apparently few have connected-the-dots of how much more serious the Google antitrust problem has become over the last ~three years.

To best understand, compare Google to the known Microsoft antitrust experience. 

In the 1990s, Microsoft extended its first-generation operating system dominance to make Office software second-generation dominant, but DOJ antitrust enforcement effectively blocked third-generation extension of Microsoft’s market dominance beyond the PC software market and the tech sector into the economy writ large.

Different from the Microsoft outcome, Google has extended its first-generation search and search advertising dominance into second-generation Android operating system dominance, but no one realizes that Google has already de facto achieved the third-generation dominance that vigilant antitrust enforcement denied Microsoft.

That’s because Google, by extending and nearly locking up the 21st century version of the Microsoft Office bundle, with the Google-tied bundle of nine world-leading, Google web platforms -- search, digital advertising, video distribution, Maps/directories, Gmail and related communications, app-store, operating system, browser, and translation – is on path to consolidate an emergent web utility for the global Gconomy of the future.

Ponder for a moment if there is any other actual or potential competitor that can viably compete long term with the integration of at least nine Google world-leading web platforms that Google has quietly tied and bundled together: search, digital advertising, video distribution, Maps/directories, Gmail and related communications, app-store, operating system, browser, and translation?

Then ponder if any company, or group of companies, can viably compete long term with the lone omni-platform that offers all these platforms in a unique integrated web utility-ish role, that is free to self-deal with impunity, and which is the only entity in the world with the mission and the achievement of organizing the world’s information?   

Antitrust enforcers apparently have not woken up to the fact that, an asleep-at-the-switch FTC, and lax global antitrust enforcement to date around the world, has allowed an obviously dominant sector player with multiple abuses of dominance, to become a supra-sovereign, third-generation dominance-extension problem that currently is virally-metastasizing beyond search and search advertising into to most all of the core functions of the global Internet ecosystem.

To paraphrase the famous line in the relevant movie “Jaws,” antitrust enforcers are now just learning that they “need a bigger boat.”     

Forewarned is forearmed.


Scott Cleland served as Deputy U.S. Coordinator for International Communications & Information Policy in the George H. W. Bush Administration. He is President of Precursor LLC, a research consultancy for Fortune 500 companies, some of which are Google competitors, and Chairman of NetCompetition, a pro-competition e-forum supported by broadband interests. He is also author of “Search & Destroy: Why You Can’t Trust Google Inc. Cleland has testified before both the Senate and House antitrust subcommittees on Google and also before the relevant House oversight subcommittee on Google’s privacy problems.