Whether Google is a monopoly isn't the point
Much has been made of Google chairman Eric Schmidt's admission on Wednesday that the web giant might be a monopoly, during his testimony before a Senate hearing into Google's market dominance and its effect on consumers and the marketplace.
Context & Ripple Effects
Google's market power has been contested for years, from monopoly fears raised around its chief executive in 2008 to a 2010 debate over whether it met the monopolist label. Schmidt's Senate testimony moves that argument into a formal examination of effects on consumers and the marketplace.
The significance is less the label than the venue: the Senate is testing how Google's scale shapes market outcomes while the company is expanding products including Google+ and Product Search.
First-order effects
- Google faces direct Senate scrutiny of how its market position affects consumers and the marketplace, with Schmidt's acknowledgement putting the company’s own characterization into the record.
- The Senate gains a public forum to assess Google's conduct and market effects rather than leaving the question to the long-running public debate.
Second-order effects
- Google's product decisions, including changes to Product Search, face a higher burden of explanation because they can be examined through the hearing's consumer-and-marketplace lens.
- Businesses that depend on Google's services gain a more prominent venue for arguing that Google's market position changes the terms on which they reach users.
Third-order effects
- If Senate scrutiny centers on conduct and market effects rather than the monopoly label alone, oversight of large internet platforms will increasingly turn on gatekeeper behavior.
- The episode points to a policy debate in which the breadth of a platform's connected products matters alongside its share in any single market.
The trend: Internet-platform oversight is shifting from an abstract monopoly debate toward scrutiny of how gatekeepers' product choices affect users and market participants.