Is Google Antitrust Action Evidence that Market Already is Changing?

It sometimes is noted that regulators are “behind the market,” or “behind the technology,” no matter how hard they try to stay current.

In the financial world, it likewise is noted that, by the time, the retail investor catches up to a trend, the trend already is about to reverse.

That arguably is the case with the new European Union investigations of Google in the search market and now possibly also in the area of mobile operating systems. Whether the relationship was causal or simply correlated, the decade-ago investigation by the EU of Microsoft’s similar antitrust threat coincided with the emergence of a new era of computing, and computing industry leadership.

That, some of us would say, is likely to be the case as the EU investigates Google for antitrust violations: such action is a trailing indicator, not a leading indicator.

In other words, a shift is likely already to be underway, rendering the danger of Google antitrust danger quite moot.

The problem faced by regulators and business leaders often is that strategies deemed vital at one moment in time can seem almost irrelevant a decade later.

Consider the launch of the Android mobile operating system by Google, seen in 2005 as an insurance policy against complete dominance in the mobile realm by Microsoft, with the danger that could pose for Google apps on mobile devices.

That was before the emergence of the Apple iPhone. A decade later, the strategic rationale arguably no longer has such potency. For starters, Microsoft Mobile is not a huge factor. Nor has Android proved to be the boon many might have expected. Android doesn’t directly generate revenue for Google, and “forked” versions of Android even are proving to be the foundation for new rival ecosystems (Amazon now, and possibly Microsoft and others in the future).

The Telecommunications Act of 1996 likewise was the first major revision of the Communications Act of 1934. Aiming to introduce competition in the telecommunications market, the Act focused on enabling voice competition.

More than a decade later, it is clear what really happened. Voice was about to reach its peak of adoption in 2000, to begin a steady decline. The Internet, meanwhile, emerged as the vital source of telecommunications-delivered applications and value.

The Act made sense at the time. But policymakers could not have foreseen the maturation of voice and its replacement by Internet apps as the source of innovation and growth.  

It is very hard to make the right strategic decisions today, and have them remain relevant after a decade. Both the Telecommunications Act of 1996 and launch of Android were aimed at problems that did not materialize, or arose from unexpected directions.