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Big Tech, small consequences
When I began covering tech in the 1990s — yes, this is another Tech Chronicle where I tell you about the days of yore — the pursuit of antitrust charges against Microsoft was a big story. Gary Reback, a Palo Alto lawyer who helped marshal evidence against the software giant, made the cover of Wired. When the Department of Justice finally filed a Sherman Act lawsuit in 1998, it gripped Silicon Valley.
And it had seismic effects. A small search-engine startup in Mountain View with a funny name quietly grew while Microsoft wrestled with the government, ultimately settling the case. A product manager at that company struck agreements with PC makers to bundle its toolbar software — deals that were crucial to the search engine’s growth, and deals that Microsoft might have quashed were it not constrained by the settlement.
That company was Google, and the product manager, Sundar Pichai, now runs not just Google but its parent company, Alphabet. And now Google is in the antitrust crosshairs. The Justice Department filed an antitrust lawsuit against the company Tuesday that Columbia Law School professor Timothy Wu described as “almost an exact copy” of the 1998 Microsoft suit.
That’s not a compliment.
The lawsuit alleges that Google sought to strangle competition and control distribution. Google, unsurprisingly, called it “deeply flawed.”
Wall Street shrugged off the filing of the case, leaving Alphabet still worth more than a trillion dollars. In fact, the company rose some $15 billion in value Tuesday. At that rate, Google should invite more lawsuits.
That seems to be Facebook’s strategy. The social network is pushing forward with integrating its properties, thumbing its nose at proposals to unwind its acquisitions of Instagram and WhatsApp. Instagram users have started to get invitations to merge their direct-message inboxes with Facebook Messenger, allowing them to exchange messages with Facebook users. The app warns that the change can’t be undone. Consider it a metaphor, regulators. Facebook, too, faces government scrutiny, and its own antitrust lawsuit led by the Federal Trade Commission could come by the end of the year.
The pity is that if Google were to spin off YouTube or Facebook were to spin off Instagram, the independent entities would be better poised to compete with upstarts like TikTok. Look at the inept mess that was Google+ or the many forgotten apps Facebook tried to create as evidence that these tech giants have gotten too big for their own good.
If the Microsoft antitrust lawsuit is any lesson, it’s not the government that will ultimately rein in big tech companies. What really matters is that Google and Facebook will be distracted, and that distraction will provide some startup with an opening. A fatal failure to innovate will be what brings them down.
— Owen Thomas, othomas@sfchronicle.com
Quote of the week
“The adoption of augmented reality is happening faster than we had previously anticipated, and we are working together as a team to execute on the many opportunities in front of us.” — Snap CEO Evan Spiegel to analysts on an earnings call, explaining why he’s still trying to make camera glasses happen
Coming up
Are the chips up or down? Find out when Intel announces earnings Thursday, followed by AMD Tuesday.
What I’m reading
Tom Dotan and Jessica Toonkel on Jeffrey Katzenberg’s fruitless efforts to sell Quibi. (The Information)
Chase DiFeliciantonio on a new challenge to the Trump administration’s H-1B visa changes. (San Francisco Chronicle)
Kurt Wagner on Pinterest’s move to diversify its board as a former top executive sues it for gender discrimination. (Bloomberg News)
Tech Chronicle is a weekly newsletter from Owen Thomas, The Chronicle’s business editor, and the rest of the tech team. Follow along on Twitter: @techchronicle and Instagram: @techchronicle
"Stop" - Google News
October 21, 2020 at 06:00PM
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Is it too late to stop Google and Facebook? - San Francisco Chronicle
"Stop" - Google News
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