Tech’s Benighted

by Mike Wendy on July 11, 2011

The Wall Street Journal’s L. Gordon Crovitz had a piece today entitled, “Google’s ‘Monopoly’ Hex,” in which he laments Google’s current antitrust woes and its negative effect on serving its customers.

According to Crovitz:

Google must now amass an untold number of lawyers, lobbyists and public relations firms to fight the antitrust action. There is a real risk Google will become less of an innovator as its focus switches to Washington from Silicon Valley and to lobbying regulators from pleasing consumers.

I agree with sad fact this entirely.  What a waste.

Crovitz’s main beef, however, is with Google’s competitors (especially Microsoft), whom he feels are using the regulatory system to handcuff Google for its success.  In Crovitz’s view, serving customers well – as Google apparently does – is not in itself an antitrust violation. He then goes on to scold Microsoft and other Silicon Valley “naïfs” for their failure to observe the “unpredictable results on firms and industries once the furies of regulators” have been unleashed, admonishing Google’s suitors by noting:

Entrepreneurs and venture capitalists should recall that leaders of earlier industries such as steel and autos were at least sophisticated enough to know that business executives need to hang together against regulators or risk getting hanged separately.

You know what? I agree with this general statement, too.  But what I don’t agree with is Crovitz’s odd Google blind spot.

For the better part of this last decade, Google and its sophisticated advocacy efforts on a variety of issues in Washington have only ensured that such “competition” / “retribution” would occur.  I don’t like it.  But, it’s not unexpected (as I have often noted in this blog).  The notion of “hanging together” ended a long time ago, if it ever existed at all.

Consequently, Microsoft and others haven’t reinvented the wheel.  The shear complexity of government – its tentacles in everything – as well as the immense and profitable trough it represents, act like an economic call to all U.S. businesses.  There’s gold in them thar hills.

The technology business is not immune.  Sadly.

Crovitz naively thinks that Google should somehow be protected from this “natural law.”  Had Google “hung together” with others – had it avoided putting fuel on the fire all these years – maybe its competitors would have been less apt to go nuclear.  But, it didn’t.  And now they have.  And until government presents fewer opportunities for competitive arbitrage – something which Google has actively worked against (as seen in its promotion of Net Neutrality regulations at the FCC, among other matters) – this game is likely to play out again and again and again.

Sort of like a child’s merry go round, except without the sense of merriment and fun…

…and consumer benefit.

Less government = less opportunity for child’s play.   = More innovation. = More jobs and prosperity.   Too bad the youngsters in our nation’s tech-Meccas want to stay on the merry go round.  Too bad for America, also.


Brett Glass July 11, 2011 at 8:21 pm

Alas, now that Google is behaving like Microsoft (Google+ is a great example of horizontal monopoly leverage and of being able to use a “cash cow” monopoly to fund multiple attempts at new businesses) it should be treated like Microsoft.

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