Are Google's monopoly cases 5 years too late or 2 years too early? | Equity Podcast

28 Aug 2024 (21 days ago)

The Abundance Institute and Neil Chilson's Work

The Abundance Institute is a new non-profit organization focused on creating a supportive environment for emerging technologies, particularly in cultural and policy spaces.
Neil is a lawyer and computer scientist who previously worked as a telecom lawyer and at the Federal Trade Commission (FTC) before becoming the head of AI policy at the Abundance Institute.
People can find Neil Chilson on X @neilorchilson, Substack at outofcontrol.substack.com, and the Abundance Institute website, abundance.institute.

The Department of Justice (DOJ) alleges that Google holds an illegal monopoly in online search and advertising technology, suppressing competition and forcing businesses to use its products.
The Department of Justice (DOJ) argues that Google favors its products by paying publishers more to use its platform, leading to higher costs for advertisers.
Google achieved market power in the search case through consumer popularity, while in the adtech case, it's alleged to be through specific deals and conduct.
The search case centers on Google maintaining its monopoly through anti-competitive contracts, like default placement on Apple devices, whereas the adtech case focuses on how Google gained its market share.
While the search case might lead to prohibiting exclusive contracts, the adtech case, if liability is found, could theoretically involve unwinding past transactions, despite potential legal ramifications.

Google offers an easy way for small businesses to advertise online, giving them a significant market share.
Google argues that online advertisement costs have fallen dramatically, partly because online advertising is more effective.
Google's business model, particularly in search and advertising technology, is facing potential threats from emerging AI-powered search engines and changing user behaviors.

Perplexity, an AI-powered search engine, utilizes a display search model where advertisers pay for ad placement based on topics rather than clicks, contrasting with Google's click-based revenue model.
Perplexity's revenue-sharing model with publishers, where publishers receive a portion of ad revenue when their content is cited in search results, could potentially incentivize data sharing for algorithm training and impact future antitrust considerations.

Artificial intelligence (AI) will make it easier for small businesses to compete with larger ones because AI can handle bureaucratic tasks typically done by humans.
Neil Chilson believes that while AI will lead to the creation of many smaller, agile companies, large firms will likely persist.