Does anyone remember Netscape Navigator? (If you don’t, here is a quick recap: after Al Gore invented* the Internet, Netscape was the dominant internet browser.) Microsoft in turn started shipping Windows with Internet Explorer (Microsoft’s browser) preinstalled on it. 

It also put pressure on computer retailers not to install different browsers on new computers. Eventually, Microsoft pretty much killed Netscape and the US Government sued Microsoft for breaching anti-trust laws. For a while it looked like Microsoft would be broken up by the court into separate companies.

 

Fast forward 20 or so years, and the US Government has just filed an anti-trust lawsuit which will probably be much bigger than the Microsoft case. This time, the target is Google.

 

It’s alleged that Google abuses its monopoly in the online “general search market” and also over “search access points”. What does this mean?

 

“General search market” basically means you go online and search the internet. By contrast “specialised search market” is when you use a specialised site to get access to more refined results. For example, if you want to search for hotels in Caloundra, you can search on google.com – this is a general search of all public websites of the whole internet. Or, you can go on booking.com – this is a specialised search because it won’t search the whole internet for you, just the booking.com site, but the results are more specific and detailed to your query.

 

“Search access points” is a reference to how you access the search engine which performs your search. For example, on your desktop, you would go into your web browser, type in google.com.au and that’s how you reach the search engine. These days, the majority of online search is done on mobile phones. In the US, the IPhone is the market leader. It’s web browser is Safari. And thanks to an agreement between Google and Apple, when you do an online search on your iPhone, behind the scenes, the actual search is done by Google’s search engine. (If you are not an iPhone user, then you must be on an Android device, which is owned by Google anyway…)

 

Increasingly, we access “search access points” in different ways: for example, with voice search, again, we actually trigger Google’s search engines. New technologies (such as smart fridges, autonomous cars, smart watches) all offer online search and Google is pushing to be the search engine provider in the background.

 

So, here is what happens: Google uses its power to ensure that when you buy a product out of the box it is set up to use Google’s search engine. The more people use Google, the more searches are performed, which in turn makes Google’s search algorithm smarter. The keyword is scale: to deliver a quality search engine that provides accurate results, you need huge numbers of users and searches. And when you have a quality search engine, more people will use it. And advertisers will spend big bucks to reach these people.

 

Reportedly Google last year paid billions from its advertising revenue to Apple just so that iPhones keep using Google’s search engine. Another billion was paid to various US mobile phone networks so they set up Google as the default engine on the mobiles they sell.

 

That’s the conduct the US Government is complaining about. Why? Because a competitor can’t build a search product that is as good as Google, as they can’t get people to access their alternative search engine in the first place. So they can’t get scale, and can’t build a clever algorithm.

 

This is going to be a drawn-out legal battle. But as we watch things unfold, I think it is worth remembering this: Microsoft’s monopoly from the late 90s was broken down not so much by legal means, but by technological advancement, namely the internet and the emergence of online companies. Google may seem big now, but who knows if 10 years from now they will still be relevant.

 

*Al Gore didn’t actually invent the internet (obviously) but in a 1997 CNN interview he did claim a lot of credit for “initiating” it.