I’m no lawyer, but has Google’s venture into the mobile handset space finally gone a bridge too far? It’s a question worth pondering with Google’s release of the Nexus One cell phone as the search giant now has the ability to develop a mobile phone primed to take advantage of its software innovations and its globally dominant search platform – a huge advantage on other handset makers.
The argument could (and likely will) be made that Google built up its business and the Nexus One is simply an extension of those efforts. But that’s where I get the sense government regulators could disagree…
Google – Extending its Dominance Into Hardware
Google’s search dominance is overwhelming. In most developed countries it is the search platform of choice. In Australia, we’re talking a 90% market share. It is so dominant, the number one keyword query on Yahoo 7 Australia (now Bing Australia) is ‘Google’ (or at least it was according to Bill Tancer from Hitwise in 2009 SMX Sydney presentation). Clearly we’re dealing wih juggernaut that has embedded itself into people’s everyday lives and modified behaviours to become the overwhelming ‘default search platform’. It’s a phenomenal success and the good folks at Google should be commended for it.
Google’s Smartphone – A Competition Killer?
Where this gets tricky is when Google starts creating hardware. Suddenly you could have a phone that auto-updates to the latest Google software innovations. Imagine a phone that not only works seamlessly with the world’s preferred search engine, but has first mover advantage whenever Google rolls out a new update? Heck, why stop at phones? Imagine a TV, computer, fridge, or car that is fully integrated.
What is the competition to do? Develop a new search engine and try to beat Google at its own game? Yeah right. We’re talking ingrained behaviour here and one heck of a technological mountain to climb. That’s easier said than done. Just as the good folks at Microsoft’s Bing.
Antitrust Lessons from Days Gone By
Don’t get me wrong. I’m all for innovation, competition and reaping the rewards of your hard work. But there comes a point where customers like you and me are ill served when a monopoly uses its strength in one area to dominate in other sectors. Recall how back in the day (1934 to be precise), the US government broke up United Aircraft (now United Technologies) – a holding company comprising among other things, a collection of airlines known as United Airline, an engine maker, Pratt & Whitney and a little aircraft manufacturer… known as Boeing. United Aircraft was deemed anti-competitive, because you simply couldn’t have an airline getting sweet deals from its own aircraft manufacturer and engine maker.
Now view Google’s foray into cell phones in this light, add the new ‘regulatory environment’ we find ourselves in, sprinkle a few competitors with an axe to grind (and with a penchant for litigation) and maybe… just maybe, Google’s finally pushed its luck into antitrust territory.
Is there a lawyer in the room?
