antitrust

When Google sneezes, does the internet get flu?

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Much of the web-based new economy hinges on the behaviour of how one company deals with two mammoth challenges next year. Both are potentially lethal, and a poor response to either will have dire consequences for many operations doing business on the internet.

Fortunately, that company is supremely well-equipped to deal with problems of a technical nature, employing some of the best scientific brains in the world. Unfortunately, neither of these two potential company-crushers has a technical solution: and the answers the brains come up with are only likely to make the problem worse.

The company in question is Google, of course, and here are the two problems.

The first is that most of Google’s wealth – and with it the earnings of businesses both large and small who depend on the advertising broker for the majority of their income – is generated from a system Google controls.

The self-service contextual classified advertising operation is a black box. It looks like a “market” – with buyers and sellers negotiating a price – but it’s a market that Google dominates. Google ultimately sets the price, and when it comes to disputes it’s hanging judge and jury too.

This doesn’t particularly appeal to Wall Street. Not because capital has suddenly been overcome with a dose of ethics – there’s nothing it loves more than a sure monopoly – but markets needs arbitrage. When they’re presented with an opaque model, there’s no way to measure the risk, let alone hedge it.

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Addicted to antitrust, Microsoft outlines 12-Step Recovery

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Antitrust addict Microsoft has outlined a 12-Step Recovery Program, which it says will help prevent it from lapsing back into anti-competitive practices in the future.

The declaration follows three major “interventions” in fifteen years. A 1991 investigation by the Federal Trade Commission resulted in a Consent Decree signed in 1995. A 1997 investigation by the Department of Justice, joined by a number of US states the following year, resulted in a conviction and settlement in 2002. And just last month, the EU rejected Microsoft’s claim that it was complying with a 2004 antitrust settlement.

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The Canonization of St.Bill

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St Bill of Shephards Bush

If William Henry Gates the Third’s philanthropic work leads to him being canonized one day as the first secular saint of our times, I won’t stand in the way of the celebrations. Geeks get things very out of proportion, and the value of saving even one life should be more apparent to everyone than the cost of a poorly written Windows USB stack. When Microsoft is criticized, while the practices of arms dealers, pharmaceutical companies and extraction cartels around the world are ignored, its reminds us that some nerds place a very low value on human life itself.

But if Gates is to be canonized as the man who invented the PC, and without whom our lives would be poorer – as he is this evening – then we should all be troubled, as it suggests we’re suffering from a terrible case of ignorance and amnesia. More troublingly, it raises the fair question – which we hope you can help answer – of what kind of qualifications one needs to have to earn the title ‘Henry Ford Of Our Times’.

Tonight the BBC discussed Bill’s legacy, and was effectively writing the first draft of his place in history. And in that painful BBC fashion of splitting the difference and losing the truth – there are two, but never more than two sides to every story – came to its conclusion. Bill Gates had been truly innovative in his earlier career, we learned, and while “someone would have invented the PC eventually” (we paraphrase), this incredible inventiveness could still be entered in mitigation when the final reckoning came.

So, Bill invented the PC? Even excusing for media hyperbole – and this is the kind of careless, but generous exaggeration you hear when someone has died (rather than relinquished the role of “Chief Software Architect”) we would like to put a few points on the record.

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Bill Gates’ letter to hobbyists (en Français, 2006)

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Free software doesn’t deserve to be mentioned in the same breath as web hucksters. Not only is it a historical continuity of the way much of our software infrastructure has been developed, but it has encouraged commercial value to built through service models, or dual licensing. It’s a pity free software and open source advocates haven’t disowned the comparisons more strongly

European Court justice Cooke gave Microsoft’s lawyers a tonic yesterday, by raising concerns about the transfer of Microsoft’s intellectual property. But one shouldn’t read too much into his intervention – the judge was playing devil’s advocate. And the trouble for Microsoft is that it needs 12 more Cookes to spoil the European Commission’s broth.

Nevertheless, Cooke’s elevation of the intellectual property issue will trouble both proprietary rivals and free software advocates alike. Arguing the moral rights of a property holder is comfortable ground for Microsoft – it would rather be staked out here than be trumpeting its bold record of innovation, or its congenial and co-operative reputation in the technology business.

And the wholesale destruction of value caused by “volunteer” projects such as Craigslist, Wikipedia or “open source” software is certainly worthy of discussion, and should not be ducked. Craigslist is a business that poses as a non-profit, and by creaming off newspapers’ classified profits, is hurting communities and shifting power to the middle-class and PC-literate by destroying what may be a community’s only universally accessible media. Wikipedia is an ersatz “encyclopedia” that’s industrialized the process of propagating unreliable information, and its only commercial value seems to be spammers, who scrape its keyword-rich content for junk websites. Free software doesn’t deserve to be mentioned in the same breath as these ventures. Not only is it a historical continuity of the way much of our software infrastructure has been developed, but it has encouraged commercial value to built through service models, or dual licensing.

It’s a pity that open source and free software advocates, many of whom find such comparisons odious, haven’t disowned them more strongly. For when an influential judge lumps free software in with hucksters and hooligans, he’s only citing what’s he’s reading in the New York Times, or our best and brightest think-tanks. This is the price we pay for having a witless and inattentive press – and a punditocracy too eager to grasp shiny new shapes or diagrams.

The plot thickens, however.

Especially when one considers the little-known fact that Microsoft has already offered to give away the source code to the protocols free software developers wish to work with, then we can see Microsoft’s true intentions rather more clearly. It’s an offer too good to refuse. What on the face of it looks like the moral high ground based on a defense of property rights, is really an artful strategy to isolate and punish free software. And on that basis, you can’t fault Microsoft for inconsistency – it’s a strategy that hasn’t changed since Bill Gates’ “Letter to hobbyists” in 1976.

We’ll explain.

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FCC opens door to ISP wipe-out

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Re-monopolizing the phone service 

US telecoms regulator the FCC has signaled the end of the independent ISP, a move which will leave DSL provision concentrated in the hands of just a few large providers. The move, which turns local DSL provision from a regulated monopoly into an unregulated monopoly, also has repercussions for rural telephony providers, who will lose a chunk of subsidy, and has potentially chilling consequences for free speech.

Unless state regulators step into the void just vacated by the Federal regulator, however, every independent DSL provider will find itself at the mercy of the Baby Bells when its contract expires – and the Baby Bells have no compulsion to renew those competitors’ contracts.

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GoogleNet – the ultimate embrace and extend?

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We’ve been reading stories about the “end of the internet” ever since the internet was exposed to the public more than a decade ago. Telcos, media companies, infrastructure hardware providers, and operating systems monopolists have all taken their turn as the villain in this particular drama. So far not one has succeeded.

But the really scary thing about “the end of the internet” was never how easily it could be achieved, but that it might be welcomed by most of the people who actually use it. Now Google has helped drive the point home.

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