Saturday, April 18, 2015

Antitrust and the Danes

The Irish can still recall the Danes invading in the 800s, driving up the Shannon, destroying and plundering, the monasteries and massive libraries of documents, driving the then both religious and educated into ever present terror. Then when Henry II arrived and he gave Ireland to his somewhat less than competent son John, it began a thousand year occupation which seems to continue to the present. Yet to a reasonable degree it was the Danes and their ships that destroyed what could have been a few hundred year leap on civilization.

Now to antitrust. This has always been a rather messy quagmire. I have written extensively on the topic and it may be worth an examination. One need look at just two cases; IBM and AT&T. At the time the dropping of IBM was totally correct. There was competition, just look at IBM today, going through another metamorphosis. On the other hand AT&T was also correct. It was a Government sanctioned monopoly that actually stifled any competition. I examined this in detail in 1990. Had DOJ not broken up AT&T we most likely would still have black rotary dial phones and would be leasing them for $1,000 per month!

Now to the Dane and Google. In a sense Google is akin to the Irish monks, providing knowledge universally, along with some of their services, but it is the knowledge that counts. Then comes the Dane, not on a long boat this time but with the power of the EU, that mighty fortress that seem just two shakes from collapse.

As the NY Times notes:

Last year, as Ms. Vestager was leaving her job as Denmark’s minister of the economy, she gave her successor a hand-knit toy elephant — she often works on them during staff meetings — noting that the animals “bear no grudge, but they remember well.”

Sounds like the Danes and their long boats! Off to the monasteries and their libraries, burn them down!

The Times continues:

In Brussels last Wednesday, she filed formal antitrust charges against the company, saying that the search engine giant had abused its market dominance by systematically favoring its own comparison shopping service over those of its rivals. If Google fails to refute the charges, the company could face a fine of more than 6 billion euros.

 Google has competition. It is not an AT&T, perhaps it may become an IBM, but never an AT&T. Technology changes daily, regulators look backward, and project forward their worst visions. The Times continues:

That direction was filing formal charges, called a statement of objection, accusing Google of favoring its own comparison shopping service, called Google Shopping. In practical terms, the commission found that when a consumer used Google to search for shopping-related information, the site systematically displayed the company’s own comparison product at the top of the search results — “irrespective of whether it is the most relevant response to the query,” Ms. Vestager said in a commission-issued statement about the charges.

 The Dane does not seem to understand that the mechanism used is how Google pays for the service. It is a service, it costs money, and frankly anyone else can build their own such service. There is no monopoly, there is no barrier to entry, it is not AT&T preventing any competition. The Dane seems to be clueless about the world of business, but then most likely did her ancestors as they pillaged up the Shannon, past my ancestors. This may just be 21st Century pillage, again the Danes!