Anika Begay
Larry Page and Sergey Brin never liked being around journalists. “Larry may be a very sensitive and kind person, but he has serious trust issues and very little manners,” a former Google public relations person once told me. “Sergey has good manners, but he doesn’t trust people he thinks aren’t close to his level of intelligence.”
But in the fall of 1999, their new publicists urged Google’s cofounders to visit the East Coast for a modest press tour. Barely a year old, Google was still in the public eye for most people, and few knew its compelling story: Page had put the entire World Wide Web on Stanford University’s servers to guess the perfect result for a search query, and Brin had done some mathematical wizardry to make the concept a reality. They tried to sell the technology to one of the big Internet portals, but couldn’t get a deal they liked. So they started their own company. It wasn’t yet clear where their revenue would come from. They were known to hate ads, believing that “advertising-funded search engines will be inherently biased toward advertisers and away from the needs of consumers.”
When they arrived at Newsweek, where I worked at the time, none of the top editors wanted to meet them; Web search seemed a niche feature of Yahoo and AOL and the other dominant portals. So the business editor and I took the couple to lunch at a downtown seafood restaurant. The scale and frenzy of New York City seemed overwhelming to the awkward couple. The idea that their company might one day be worth $2 trillion seemed about as likely as the Earth spinning off its axis.
Fast forward a quarter century. Google, now called Alphabet, is indeed worth several trillion. Internet search is as ingrained in our lives as breathing, and Google has a 90 percent global share. Larry and Sergey, while still shareholders with fortunes exceeding $100 billion each, are no longer employees or members of the board of directors. And this week, U.S. District Court Judge Amit P. Mehta issued a 286-page ruling, based on millions of documents, thousands of pieces of evidence, and a nine-week trial, that Google violated antitrust law. “Google,” he wrote, “is a monopolist and has acted like one to maintain its monopoly.” What’s more, the company whose founders hated ads now faces another trial to determine whether it is also a monopolist in digital advertising.
Although it was hard to imagine in 1999, Google’s rise from upstart to overlord now makes obvious sense. Dominance, even to the point of monopoly, has proven the inevitable destination for winners in the age of Internet scale. The digital economy translates into a winner-takes-all competition, in which early innovators with humble beginnings can gain an edge over established leaders of technologies that will soon be replaced. Every company at the top of our current tech heap was founded by young enthusiasts with a big idea, usually a concept discarded by the industry giants of the time. Before Larry and Sergey, there were Bill Gates and Paul Allen, two students who saw a market for personal computer software; Steve Jobs and Steve Wozniak, who built Apple II PCs in a garage; Jeff Bezos, who started Amazon on a shoestring budget to sell stuff over the Internet. A few years after Google’s inception, Mark Zuckerberg invented Facebook in his dorm room. Tech companies vying to reach the top share a narrative: David versus Goliath.
But those slingshots were something special. The network effects of a persistent, ubiquitous Internet accelerate and stall category leaders. Moreover, these founders were brutal competitors who exploited those advantages to the max. Larry Page was obsessed with the story of Nikola Tesla, the brilliant inventor who died in obscurity, and vowed never to become a Tesla. Microsoft’s use of bundling to stifle competitors was notorious (and led to an antitrust lawsuit it lost). Jeff Bezos protected his flank with Napoleonic zeal, keeping customers close with low prices. The young Mark Zuckerberg used to end meetings by shouting the word “Dominance!” Eventually, as the Davids became Goliaths, they settled on a new narrative: the myth of Icarus. Fueled by the hubris of their dominance, and mistaking their network-effect-fueled rise for their singular geniuses, their heights took them perilously close to the sun.
That’s the context of Judge Mehta’s ruling. In particular, it focuses on Google’s practice of cumulatively spending tens of billions of dollars for default placement in the address fields of Apple and Mozilla browsers. Google insisted that it could only make those deals because its search engine was the better alternative: Apple would never force an inferior product on its customers. But the judge noted that Google’s superiority was a self-perpetuating phenomenon. Because Google handles nearly all searches, it can collect data on a scale that its competitors can’t hope to match. That allows it to improve its search engine in ways that rivals can’t even dream of. It’s legal to gain a monopoly through a superior product or innovation, but actions that maintain a monopoly, such as limiting competition, are illegal. So, the judge says, Google is breaking the law.
