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On monopolies

Winners in the tech industry turn into giants via vertical integration and predatory pricing. They keep adding stuff related to the segment they first won in. They keep making stuff cheap or free to undercut competitors.

There are many examples of this and we have two big examples in the US of anti-trust regulators stepping in and hobbling the giant: IBM in the 60s/70s and Microsoft in the 90s/00s. In both cases the government forced the giant to change its behavior and the industry eventually experienced a new wave of small firms that filled the void, competed, and innovated.

Notably in both cases the giant also got off relatively easy in the end (no breakup). And both are successful companies to this day. But they were tied up in court long enough to lose their ability to squelch competitors and dominate new markets.

Now you could argue this was not fair to IBM or to Microsoft (in the future, to Google?). In both cases you’d be right. I’d argue you don’t have to be fair to the winner especially once he starts playing dirty tricks to keep others down. You be fair to the little guys and you get tough on the big guys, that’s the foundation for both a healthy market and a healthy society.

You could also argue that making things free is good for consumers. You’d be right again, except in the case where the freebies are designed to kill off competition and stagnate the product category (Internet Explorer being a classic case where Microsoft bundled it, gave it away for free, then stopped improving it for years).

We have 50 years of precedents and the people at the DOJ know their history. I suspect it’s just a matter of political winds and timing before Alphabet has to follow in IBM and Microsoft’s footsteps.

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