Does Google Really Believe Data Is Not as Important as You All Believe?

“Antitrust laws?apply to virtually all industries and to every level of business. Governments design them in order to make sure there's fair competition in the market. They prohibit a variety of practices that restrain trade including?price-fixing, anti-competitive corporate?mergers , and predatory acts designed to achieve or maintain?monopoly ?power. In simpler terms, antitrust laws prevent companies from making and boosting their profits by playing dirty.

Without these laws in place, consumers wouldn't have the choices they do and would be forced to pay higher prices in order to get the goods and services they require. Some companies may try to circumvent the laws to try to position themselves as a leader in the?market . The government may step in to stop them from?establishing a monopoly , thus knocking out the competition.“?—Why Did Microsoft Face Antitrust Charges in 1998? ?By ANDREW BEATTIE (Updated October 25, 2021). Reviewed by SOMER ANDERSON.?Fact checked by VIKKI VELASQUEZ.?

Although given the huge success of MSFT since then, most have forgotten about the historical nature of the case and its outcome:

• Microsoft was accused of trying to create a monopoly that led to the collapse of rival Netscape by giving its browser software for free.
• Charges were brought against the company by the Department of Justice in 1998.
• The judge ruled that Microsoft violated parts of the Sherman Antitrust Act and ordered the company to break up into two entities.
• Microsoft appealed the decision, and it was overturned.

Beattie continued…

“Microsoft didn't take the ruling lightly and appealed the decision. The company took issue with the judge's position, citing bias in favor of the prosecution. The appeals court overturned Jackson's decision against Microsoft. Instead of seeking to break up the company, the Department of Justice decided to settle with Microsoft. In its settlement, the DoJ abandoned the requirement to break up the company, In return, Microsoft agreed to share computing interfaces with other companies.”

Bottom Line??

The company saw its once invincible market share erode due to old-fashioned competition. And, of course, it is still hugely successful and has (wisely) applied the lessons learned to its expanded foray into the gaming space.?

Fast forward to today:

Google owns (some would say has a stranglehold on) 90% of the Search Engine market in the United States, with Bing trailing with less than 5% and assorted odds and ends making up the rest.

U.S. et al. v. Google is the first monopoly trial of this Digital Era and is the first case (of any consequence) against so-called "Big Tech" since MSFT in the last century.

What makes it unique and possibly transformational is the focus on Google’s underlying business model (tech, if you will) as opposed to Mergers and Acquisitions or plain old-fashioned big vs. little bullying.??

The U.S. Government's case centers around one key player—Data. And how Google uses it, leverages it, and derives power from it.??

Kenneth Dintzer, the lead lawyer for the Justice Department's case, opened the court proceedings by declaring that data is "oxygen for a search engine."?

All of us in the industry know this as gospel. (It took the government two Presidents and a bunch of years. Go figure…or maybe not. LOL!) Search creates data; that data improves the next search. The more users search, the results get better than the competition, and even more data is generated. All of which (of course, the most important aspect of the Internet—sadly) drives immense advertising earnings.?

And this all keeps the competition out of the running. Think about that— 90% market share and all the data it drives—who could possibly compete??

On top of that, the government contends that Google bribed, coerced, bullied, threatened, and otherwise applied unfair pressure to companies like Apple and Samsung to be the featured search engine in their hardware, which, of course, (Shockingly...tell me it ain't so…LOL) drives even more data and yadda yadda yadda…stomps on the competitions already dead bodies and away we all go!

Google, of course, refutes it all. In fact, according to them, Data is not really that important. They have gone on record saying that:

"Google does not deny that user data can improve search quality, but Google will show that there are diminishing returns to scale."

WOW…take that big and little (hoping to be big) data prophets aka Meta, all the Advertising Holding Companies, Amazon, and... (add your own list…maybe your own company).

Their success, their posit (immense success), comes from their superior technical innovation. They win all the big contracts and attract all the users because they have a superior product. In essence, Ex-Nihilo...from nothing springs great outcomes.

The bottom line is that they have the smartest and best engineers—data just isn't that important.?

One of their expert witnesses, a computer scientist by the name of Edward Fox, was brought on to conduct a "data reduction experiment." Guess what he found? Reduce Google's data intake to that of Bing, and they'd still kill Bing.

You have to give Google high marks for staying the course, as they have been messaging this for years. No doubt, having realized that it was their vulnerability, which is why the Government salvo that they have "misled the public about the importance of data."

Bing the rest…

The Justice Department has internal Google memos (I love it when this happens) best summed up by Google engineer Udi Manber to the power players who were advancing the "data is nothing" argument:

"It's absolutely not true that scale is not important."?

So, dear reader, stay tuned.

And I have more than a little experience with this. On July 15, 2008, Microsoft asked me to join Brad Smith, then Chief Legal Counsel, at a hearing called by the Congressional Committee on the Judiciary Task Force on Competition Policy and Antitrust Law regarding Competition on the Internet.

Microsoft was calling out a proposed merger of Google and Yahoo as a dangerous monopoly that would jeopardize open advertising.?

It was a surreal moment. As I re-watched the video and thought about this Imagine post, I was taken back to the movie-like scenario I was in. Cameras all around, a table with us in the middle facing the Congressional folks and their staff.?

WILD.

Watch it —if you want. I quickly began by praising Google as a user myself, talking about its evolution, and describing its business model and advertising issues.

But then (surprise—not to my loyal readers—LOL!) I veered, changed direction,? and said:

“Allow me to take a slightly different tack.

Search is all about the algorithm, and that is all about control. If you control the algorithm, you effectively control the information it presents…Do we really want anyone controlling the answers to everything we ask? I don’t believe that any single entity should ever yield that much power, influence, or control…It is my fear of what any company could do with that position of unbridled power that makes me oppose the proposed merger.”

And dear readers, while Google contends that the algorithm is the BE ALL, it is data that makes it work. A recipe (their flawed example) is great, but without ingredients, it's theoretical. As we all know, we can always adjust a recipe as we change or add ingredients, aka data, into the algorithm, which is just a software program without the fuel of data.

To quote the creator of Sherlock Holmes : "Where are you when we need you…the game is afoot..."

“Data! Data! Data! I can’t make bricks without clay!”

Seemingly, though, Google can…

And, of course, one final last-minute breaking news point: The Activision/Blizzard deal of MSFT is being allowed to go forward in the U.K. as they apply their gamebook play of sharing with others.

Here's the takeaway: if your business depends on data (good news), Google says it's not really that important… Stay tuned and follow closely.

What do you think???