D H
May 6, 2019 · Last update 1 yr. ago.

Are Google a monopoly that is destroying competition with rival companies?

Google have been accused of being a monopoly by many media sources, is this true? Should Google be slapped with monopoly fines/competition laws? And what effect does this have on consumers?
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No - Not a monopoly but a repeated tax dodger
1 agrees
0 disagrees
Yes and the implication of this power is bad for consumers
1 agrees
0 disagrees
Monopolies can be innovators, a positive for consumers
2 agrees
0 disagrees
No, they are just market leaders
1 agrees
0 disagrees
Yes, which has led to EU fines
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No - Not a monopoly but a repeated tax dodger

The tax evasion practices of Google and many other similar companies have a much worse effect than their market dominance or their efforts to monopolise their industry. Google has been demonstrated not to be a monopoly that requires regulation, but a company that uses various tax evasion and avoidance schemes, which arguably do require better regulation. Billions of dollars are lost to tax evasion every year with all continents having a sizeable shadow economy that facilitates some of the largest market leaders in getting around tax laws and minimising their contributions.

The main monopolistic claim bought against Google is that of a search bias, in that Google tends to unfairly present their own product in search results ahead of their competitors. Studies have previously indicated a search bias issue with Google's search engine, however more recently, a more extensive study by George Mason University's Joshua Wright found flaws in older studies, and found that competitors such as Bing are nearly twice as likely to demonstrate search bias. No case has currently been successful in finding Google guilty in this regard, and trying would result in the discovery that this is a common industry practice, the case would likely fall apart.

But much more damaging to economies as a whole are global tax avoidance loopholes, with large companies thought to be using Dutch firms to avoid tax in what is known as ‘double Irish, Dutch sandwich’ that help firms cut their foreign tax bill. This tax avoidance is well documented and globally thought to cost most countries hundreds of billions of dollar in lost tax revenue, Google is just one such company with tax filing showing the company moved $23 billion to Bermuda in 2017 to avoid taxation. This should be the main issue companies like Google are prosecuted for, but such a case would require much stricter laws around tax avoidance that would probably effect many politicians and their campaign financiers, so is much less likely to be pursued.

theguardian.com/news/datablog/2013/sep/27/tax-evasion-how-much-does-it-cost-a-country forbes.com/sites/timworstall/2017/04/23/google-isnt-a-monopoly-so-dont-break-it-up-or-regulate-it-like-one/#4bced3d36ad0 cnet.com/news/google-is-many-things-but-not-an-illegal-monopoly theguardian.com/technology/2019/jan/03/google-tax-haven-bermuda-netherlands en.wikipedia.org/wiki/Double_Irish_arrangement de.wikipedia.org/wiki/Double_Irish_With_a_Dutch_Sandwich

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D H
Jul 29
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DH edited this paragraph
The tax evasion practices of Google and many other similar companies have a much worse effect than their market dominance or their efforts to monopolise their industry. Google has been demonstrated not to be a monopoly that requires regulation, but a company that uses various tax evasion and avoidance schemes, which arguably do require better regulation. Billions of dollars are lost to tax evasion every year with all continents having a sizeable shadow economy that facilitates some of the largest market leaders in getting around tax laws and minimising their contributions.

Yes and the implication of this power is bad for consumers

To begin with Google is owned by Alphabet Inc. a multinational conglomerate formed in 2015 to make the family of Google companies and subsidiaries more accountable. However Google, and Alphabet after them, have used their position as the fourth largest tech company in the world to acquire hundreds of smaller competitors and tech companies. These practices, while debatably monopolistic, have harmed competition, innovation, users privacy and are beginning to threaten users freedom of speech. According to Google co-founder Larry Page the competition was always “only a click away” [1], so online tech giants couldn’t be bad for consumers like real world monopolies, however this is no longer thought to apply to such massive tech giants as Google, who now eclipse many online markets.

One company running such a massive amount of online services and tech products cannot be good for innovation, as the company will inevitably effect the running of a product or service and bottleneck creativity. As it stands Google have bought out more competitors than nearly any other company, ultimately dragging back consumers enjoyment of new innovative technologies and services. Some of Google’s revenue generating practices have long seemed dubious also, and are possible harmful to user privacy. For example Google sells personal user information without passing any of this revenue on to the consumers from which they make this money, putting profiteering above privacy.

Although the biggest growing concern from Google and other big tech firms like Facebook is their stance on social media censorship. In the last decade the Internet has become the main source of not only news and current affairs, with 70 percent of Americans get their news from just two sources, Facebook and Google, but such platforms have also become the main place people have social and political discussions. With these companies now taking a more active role in censoring their platforms, they have demonstrated their willingness to curtail freedom of speech without acquiring consent from or making it clear to users, which poses a much more direct threat to the consumer experience. High profile issues of censorship, such as that of Alex Jones of Infowarz, from Google's YouTube, Facebook, Twitter, and other platforms, has made it clear that most platforms are using secret algorithms to censor content and are willing to even violate freedom of speech in doing so.

However even in America the legal system only addresses the government's right to restrict speech, so this new norm continues, but considering the extraordinary reach social media now has, and the implications this has on election politics makes trends such as this a threat to democracy also. This is especially worrying with platforms like Facebook that have openly collaborated with think tank the Atlantic Council to censor content. While claiming to be a partisan organisation the Atlantic Council have heavy intelligence agency links, such as former CIA chief Michael Hayden, former acting CIA head Michael Morell and former Bush-era Homeland Security chief Michael Chertoff, as well as Henry Kissinger, and the group enjoy funding from weapons manufacturers, oil companies, NATO, and the UAE. This is not an organisation to have say over what speech should appear online, and neither is a tech monopoly like Google or Facebook.

bloomberg.com/news/videos/2019-02-12/amazon-google-data-mining-is-bad-for-consumers-betaworks-ceo-says-video [1] nytimes.com/2018/02/20/magazine/the-case-against-google.html rollingstone.com/politics/politics-features/facebook-censor-alex-jones-705766 en.wikipedia.org/wiki/List_of_mergers_and_acquisitions_by_Alphabet youtube.com/watch?v=ZJUjSBXU5iY

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D H
Jul 27
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DH edited this paragraph
To begin with Google is owned by Alphabet Inc. a multinational conglomerate formed in 2015 to make the family of Google companies and subsidiaries more accountable. However Google, and Alphabet after them, have used their position as the fourth largest tech company in the world to acquire hundreds of smaller competitors and tech companies. These practices, while debatably monopolistic, have harmed competition, innovation, users privacy and are beginning to threaten users freedom of speech. According to Google co-founder Larry Page the competition was always “only a click away” [1], so online tech giants couldn’t be bad for consumers like real world monopolies, however this is no longer thought to apply to such massive tech giants as Google, who now eclipse many online markets.

Monopolies can be innovators, a positive for consumers

Although markets dominated by very few companies are thought to be susceptible to stagnation this doesn’t seem to be the case in many online markets. Arguably Google has overseen the development of one of the most effective and popular search engines, revolutionised smartphone operating systems - making them better and more affordable globally, while transforming a host of services that have been a net positive for the consumer. The company has become big enough to drive innovation and become exponentially better at what they do. If Google are a monopoly they are putting this position to good use and innovating more than harming competition.

Google are now world leaders in research and development in areas such as artificial intelligence and quantum computing, a position they could not occupy if they were a smaller company in a highly competitive market of smaller companies. Google are leading the way in many research and development projects in areas as wide ranging as: Quantum computers, Artificial Intelligence, Algorithms, Data Management, Data Mining, Distributed Systems and Parallel Computing, Education Innovation, Health & Bioscience, Human-Computer Interaction, Machine Translation, Mobile Systems, Networking, Robotics, Cyber-Security, and Speech Processing. Furthermore Google have made many of their platforms and services free, thus enabling smaller companies and users to minimise costs in their own lives and businesses. Using antitrust legislation to break up Google may hurt the innovation and positive free services the company uses its profits to fund.

nytimes.com/roomfordebate/2016/04/28/is-google-a-harmful-monopoly/monopolies-like-google-are-innovators-which-is-good-for-consumers research.google/research-areas livescience.com/google-hits-quantum-supremacy.html

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D H
Jul 27
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DH edited this paragraph
Google are now world leaders in research and development in areas such as artificial intelligence and quantum computing, a position they could not occupy if they were a smaller company in a highly competitive market of smaller companies. Google are leading the way in many research and development projects in areas as wide ranging as: Quantum computers, Artificial Intelligence, Algorithms, Data Management, Data Mining, Distributed Systems and Parallel Computing, Education Innovation, Health & Bioscience, Human-Computer Interaction, Machine Translation, Mobile Systems, Networking, Robotics, Cyber-Security, and Speech Processing. Furthermore Google have made many of their platforms and services free, thus enabling smaller companies and users to minimise costs in their own lives and businesses. Using antitrust legislation to break up Google may hurt the innovation and positive free services the company uses its profits to fund.

No, they are just market leaders

The Internet is a dynamic place and this gives rise to fears of companies becoming too imposing either on societies or markets, but arguably such a climate allows companies to fall equally as fast as they have risen. Strictly speaking a monopoly is a company that enjoy complete market dominance to the point where they can manipulate their prices due to a complete lack of competition. It is also not illegal to be a monopoly, however governments can step-in to fine or break up monopolies that have become problematic in the name of competition. However the online world is arguably largely competitive and although Google may dominate some services, the existence of Bing, DuckDuckGo, Facebook, Amazon, Apple and many others demonstrates some level of competition online.

In this way Google are not a monopoly, they are market leaders who are diversifying their investments, which is causing fear amongst rivals and those that do not like the companies scope and presence. Google have developed effective algorithms to enable them to provide, what is at the heart of their services, the best Internet search engine in the world, so it is no surprise they are the market leader in this field. This has enabled Google to carve out an 88% market share in search advertising, which may lead to a natural monopoly if they were to completely dominate the market. But as long as this doesn't effect market efficiency this would not worry economists, even if they were a monopoly this may not mean anything or require legal action if it was due to the effectiveness of their service, and until they do assume this level of market dominance, Google is not a monopoly.

cnet.com/news/google-is-many-things-but-not-an-illegal-monopoly theresurgent.com/2019/01/31/google-is-not-a-monopoly quora.com/Why-has-Google-not-been-charged-with-monopoly forbes.com/sites/timworstall/2017/04/23/google-isnt-a-monopoly-so-dont-break-it-up-or-regulate-it-like-one/#1770a5176ad0 theresurgent.com/2019/01/31/google-is-not-a-monopoly

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D H
Jul 27
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DH edited this paragraph
The Internet is a dynamic place and this gives rise to fears of companies becoming too imposing either on societies or markets, but arguably such a climate allows companies to fall equally as fast as they have risen. Strictly speaking a monopoly is a company that enjoy complete market dominance to the point where they can manipulate their prices due to a complete lack of competition. It is also not illegal to be a monopoly, however governments can step-in to fine or break up monopolies that have become problematic in the name of competition. However the online world is arguably largely competitive and although Google may dominate some services, the existence of Bing, DuckDuckGo, Facebook, Amazon, Apple and many others demonstrates some level of competition online.

Yes, which has led to EU fines

While Google is a diversified corporate company with interests in many areas the main area remains its advertising based search engine, which has been hit with EU antitrust fines, repeatedly. The company has used its dominance to make sure Google ads received greatest prominence for users of its AdSense, an embedded Google search tool, which was seen by the EU as an anti-competitive restriction and illegal under the regions antitrust laws. This adds to previous similar fines Google has received as a result of its market dominance and control over competition, and these fines have amounted to several billion dollars so far.

Following a seven year investigation into claims of the tech firm abusing its internet search monopoly the company was awarded the biggest antitrust competition fine in the history of the EU. Google was accused of manipulating its search engine to harm rival companies by not only promote its own online price comparison shopping services first but actively relegate results from their competitors. The EU investigation also found that Google made large payments to both manufacturers and mobile network operators to enable the exclusive bundling of Google's Chrome app and their search engine on the android operating system, again breaking antitrust legislation.

globaldmag.com/2019/03/20/eu-google-antitrust-fine-for-abusing-its-search-monopoly telegraph.co.uk/technology/2017/06/27/eu-hits-google-record-21bn-fine-abusing-internet-search-monopoly theverge.com/2018/7/18/17580694/google-android-eu-fine-antitrust

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D H
Jul 27
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DH edited this paragraph
https://www.globaldmag.com/2019/03/20/eu-google-antitrust-fine-for-abusing-its-search-monopoly/ https://www.telegraph.co.uk/technology/2017/06/27/eu-hits-google-record-21bn-fine-abusing-internet-search-monopoly/ https://www.theverge.com/2018/7/18/17580694/google-android-eu-fine-antitrust
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