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Google's Schmidt Admits Google is in Monopoly Area

By - Source: Business Insider | B 37 comments

Google executive Eric Schmidt had some interesting things to say during his U.S. Senate appearance.

It seems like every other month, Google is announcing a new product in a market that it hasn't previously attempted to enter and the company's definitely not in the habit of doing things by half-measures. The words 'Google' and 'monopoly' have appeared alongside each other a number of times, whether it's over book deals or the company's massive slice of the search market, and and it seems Google bigwig Eric Schmidt is under no illusions as to how powerful his company is.

According to Business Insider, the executive chairman of Google came close to admitting that Google was a monopoly while testifying before U.S. senate antitrust committee earlier this week.

"But you do recognize that in the words that are used and antitrust kind of oversight, your market share constitutes monopoly, dominant -- special power dominant for a monopoly firm. You recognize you're in that area?" Schmidt was asked by Wisconsin Democrat Herb Kohl.

Schmidt replied that yes, he agreed Google was "in that area." However, earlier comments from Schmidt suggest that Google has learned a lot from rival Microsoft's mistakes.

Speaking to the committee, Schmidt's opening speech made reference to a company whose name was 'synonymous with innovation' and whose software was on nearly every computer. Schmidt said that 20 years ago, this company setting the world on fire "but [it] lost sight of what mattered" and then Washington stepped in.

"I was an executive at Sun and later Novell at the time," he said. "And in the years since, many of us in Silicon Valley have absorbed the lessons of that era. So I’m here today carrying a long history in the technology business and a very short message about our company: We get it. By that I mean that we get the lessons of our corporate predecessors."

Google has faced several antitrust accusations over the years in a range of different markets. In 2010, the European Union launched an official probe following accusations that Google was affording its own services preferential treatment in search results. In 2009, the Department of Justice launched a probe into Google's settlement with the Author's Guild of America. That same year, the European Union opened up its own investigation into the Author's Guild deal. Ahile Schmidt's comments won't do anything to dissuade those that already think Google is too powerful, BI Matt Rosoff points out being a monopoly isn't illegal -- you're just subjected to certain antitrust laws that others are not.

For more on Schmidt's U.S. Senate appearance, hit up Business Insider.
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Top Comments
  • 26 Hide
    Jerky_san , September 24, 2011 9:14 PM
    As far as I'm concerned.. As long as they keep innovating at the pace they are doing. Paying their workers incredibly well. Then allowing them many benefits + keeping other large companies from taking markets over. I'm for them staying the way they are.. I think google keeps other large companies on their toes.
  • 24 Hide
    amk-aka-Phantom , September 24, 2011 9:58 PM
    I don't like some of the Google's products (Chrome, Picase), and they ARE a monopoly... not because they're preventing anyone from rising by dishonest methods, but because they're damn good at what they do. They earn tons of money from advertisement and most of their other software are just side projects - they can afford it. And they deserved it. This is an example of a healthy monopoly.

    Monopoly? So what, if no one can do better in this area so far? Does that mean Google is to be sued or something?

    Their power is scary, of course. And they have to be watched closely... but so far, Google helped everyone a lot.
  • 13 Hide
    Anonymous , September 24, 2011 10:11 PM
    I love Google! One company that is big and least evil. They are very innovative and and quite frankly their products work. Chrome does better that Firefox in many aspects( Love firefox dont get me wrong) ...IE.?...I wount even go there. I think Facebook is the one that should be investigated. The worst thing that happened to social networking since the invention of INTERNET....
Other Comments
    Display all 37 comments.
  • 26 Hide
    Jerky_san , September 24, 2011 9:14 PM
    As far as I'm concerned.. As long as they keep innovating at the pace they are doing. Paying their workers incredibly well. Then allowing them many benefits + keeping other large companies from taking markets over. I'm for them staying the way they are.. I think google keeps other large companies on their toes.
  • 24 Hide
    amk-aka-Phantom , September 24, 2011 9:58 PM
    I don't like some of the Google's products (Chrome, Picase), and they ARE a monopoly... not because they're preventing anyone from rising by dishonest methods, but because they're damn good at what they do. They earn tons of money from advertisement and most of their other software are just side projects - they can afford it. And they deserved it. This is an example of a healthy monopoly.

    Monopoly? So what, if no one can do better in this area so far? Does that mean Google is to be sued or something?

    Their power is scary, of course. And they have to be watched closely... but so far, Google helped everyone a lot.
  • 12 Hide
    kristoffe , September 24, 2011 10:05 PM
    google has done so much for the online community and the world that it stands to be good measure if they recognize the monopolistic image and attempt to regulate without being unfairly chastised for it.

    how many of us benefit from the online search as students, map searches, part numbers, business advertisement and connection, medical help, all with a simple vanilla interface unlike yahoo,bing, and others?

    google on!
  • 13 Hide
    Anonymous , September 24, 2011 10:11 PM
    I love Google! One company that is big and least evil. They are very innovative and and quite frankly their products work. Chrome does better that Firefox in many aspects( Love firefox dont get me wrong) ...IE.?...I wount even go there. I think Facebook is the one that should be investigated. The worst thing that happened to social networking since the invention of INTERNET....
  • 5 Hide
    thumbup03 , September 24, 2011 10:52 PM
    Whether you believe they're a monopoly or not, it's not their fault. Or rather, it's not that they purposely try to hinder their competition, they just do everything better and people naturally flock to their products. They don't take advantage of the fact that that they own huge market shares to rip off the consumer. If they did, they would go out of business BECAUSE there ARE other alternatives to their products.

    The government has no business bothering them for being successful. I thought the government was suppose to encourage innovation and entrepreneurship to create jobs in this crap economy, not hinder it. Doing crap like this just discourages entrepreneurs because they'll think, "Well, if I spend my life savings to invest in this business and become successful, the government will just step in and split my company/hard work. What's the point?"
  • 11 Hide
    JohnnyLucky , September 24, 2011 11:03 PM
    I think one of the reasons individuals are okay with Google is that there is almost no individual consumer cost associated with their products.
  • 8 Hide
    drwho1 , September 24, 2011 11:05 PM
    amk-aka-phantom Does that mean Google is to be sued or something?


    Let's ask Apple...
  • -4 Hide
    back_by_demand , September 24, 2011 11:54 PM
    JohnnyLuckyI think one of the reasons individuals are okay with Google is that there is almost no individual consumer cost associated with their products.

    Except the advertising revenue
    All companies have an advertising budget
    That budget is subsumed into a products retail price
    ...
    Google exists entirely on advertising revenue
    Consumers pay for it entirely
  • -3 Hide
    Anonymous , September 24, 2011 11:54 PM
    Wow.

    Dear Jane McEntegart,

    How do you explain the discrepancy between:
    'Schmidt admits google is in monopoly area' (title of article)

    and

    'Schmidt, according to some journalists, came close to admitting google is a monopoly'. (What the article actually claims)

    ?

    Or perhaps in your book, 'admits', and 'someone said he came close to admitting' can be used interchangably?

    To me, this kind of blatantly dishonest 'journalism' is shocking. At least others in the sensasionalism business do it in a less obvious way.
  • 8 Hide
    tomate2 , September 25, 2011 12:40 AM
    Strikes me why Apple hasn't received any antitrust accusations...
  • 5 Hide
    jezus53 , September 25, 2011 12:45 AM
    For Cheated Reader:

    "Schmidt replied that yes, he agreed Google was 'in that [monopoly] area.'"

    So he basically admitted, but not in the way you think he did. Either way, the author has every right to title the article they way they did because it is true, by agreeing he admits that google is in a monopoly area.
  • -5 Hide
    alidan , September 25, 2011 1:47 AM
    you know if the government ever stepet in, if i was in charge, i would sell all my stock and just shut the whole thing down and see how much the government likes that. i would have my money out of the company, so no big deal there, and it would be a giant middle finger the biggest it can possibly be.
  • 4 Hide
    ojas , September 25, 2011 3:38 AM
    Well, seeing that apple is coming close to a monopoly in tablets, shouldn't they receive any antitrust accusations? They keep suing anyone who thinks "square/rectangle with a touch-screen is a good thing to make".
  • -4 Hide
    Anonymous , September 25, 2011 7:50 AM
    There's a huge difference in not being able to buy a laptop without Windows pre-installed vs. using Google instead of Bing because Bing is vastly inferior. Google isn't preventing Bing or anybody else from making a better search engine, and the same applies to all of Google's other successful products.

    I think congress should go after Intel and Microsoft HARD before even thinking about going after Google, but the first 2 have lobbied/bribed away any real chance of facing consequences for their actions, which is why they're still allowed to monopolize..
  • 0 Hide
    watcha , September 25, 2011 8:14 AM
    back_by_demandExcept the advertising revenueAll companies have an advertising budgetThat budget is subsumed into a products retail price...Google exists entirely on advertising revenueConsumers pay for it entirely


    Except that that's nonsense because the consumer can still choose NOT to click the advert or not to buy the product once they've clicked. In the former case there are no charges to companies, and in the both cases the consumer pays nothing full stop, whilst still benefiting from all of the Google services. And that option, is the original posters point.

    Companies go out of business
  • -2 Hide
    molo9000 , September 25, 2011 9:24 AM
    watchaExcept that that's nonsense because the consumer can still choose NOT to click the advert or not to buy the product once they've clicked. In the former case there are no charges to companies, and in the both cases the consumer pays nothing full stop, whilst still benefiting from all of the Google services. And that option, is the original posters point.Companies go out of business


    High advertising cost still increases the price of products you buy.
  • 7 Hide
    the_krasno , September 25, 2011 10:13 AM
    I am reminded of an XKCD comic that goes like this.

    At Google headquarters a man says in a meeting "Ok, now we have all the information of all the people in the world. Let's go evil. What do we do?". A woman exclaims "Let's make billions!". "WE ALREADY DO THAT. Man, we suck at this."
  • -1 Hide
    Anonymous , September 25, 2011 11:36 AM
    You guys seem completely unaware of how google immorally damages other companies.
    http://venturebeat.com/2011/09/21/yelp-joins-antitrust-lawsuit-against-google/

    The steal other sites content and uses it in their own products.
    Since they control search, they artificially rank their own products higher while lowering their competitors rank in search results.

    This is no different than the bullshit microsoft pulled. Its anti-competitive 100%
  • 0 Hide
    watcha , September 25, 2011 11:43 AM
    molo9000High advertising cost still increases the price of products you buy.


    Only if you buy them. Which is optional. Which is the point.
  • -4 Hide
    molo9000 , September 25, 2011 12:04 PM
    watchaOnly if you buy them. Which is optional. Which is the point.


    Do u pay more if you are referred to a site by google? No.
    Prices simply include advertising cost.
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