A weird sort of monopoly

Over at The Verge, Vlad Savov has written quite an interesting analysis of Google’s market power in response to US antitrust regulators looking into whether Google has engaged in anticompetitive practices. I’ve written in the past about Google’s somewhat evil Android business model, but it’s interesting to think whether Google’s business practices could be thought of as “anti-competitive” and therefore need some kind of government regulatory response.

Savov sums up like this:

“It’s clear that Google is in a dominant position. It’s less clear how that can possibly be remedied when the company is giving away its software for free and under terms that everyone seems to find advantageous. Google is guilty of making software people and companies want. Now what?”

Overall, I think Savov has been a bit too easy on Google, but he definitely raises an interesting question: does what Google is doing count as being “anti-competitive”? I think that just because Google’s android offering is free doesn’t really affect whether it’s abusing its position and being anti-competitive. Mobile operating systems seem to be quite vulnerable to firms abusing their positions because of the strong network effects in play — as Savov points out there’s no apps for other operating systems because there’s no critical mass.

More broadly, if you disagree that Google’s behaviour with android is anti-competitive, but it’s still not desirable behaviour, where does that leave regulators and the public interest? Can regulators ever be nimble enough to challenge these quasi-anti-competitive actions, or do we just pray for the best and hope that innovation will throw up another competitor?

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