Earlier this week the NY Times reported that Google filed a complaint with the Department of Justice about Microsoft’s desktop search. At a time when Google is under scrutiny in the EU for privacy practices, censorship in China, and has potential antitrust issues of its own with the recent DoubleClick acquisition, this complaint is politically precarious.
But the complaint hits on a broader public policy point: will antitrust regulation put the heat on tech companies that innovate by integrating?
That’s the subject of my new paper along with co-author
Steve DelBianco. In Consumer Demand Drives Innovation and Integration in Desktop Computing, we examine the competition policy concerns raised by the
on-demand desktop, and the danger that overzealous regulators could constrain
the future of Web2.0.
Feature integration is an essential way to improve products
and motivate existing consumers to upgrade. Traditional desktop vendors like
Microsoft and Apple usually spend several years integrating new features into
major releases of their operating systems and applications. Even a core Linux distribution like Debian
manages only about one release each year. Consumers often prefer a bundled
product that provides more value for the money, and the software industry
typically responds by combining services in a suite of applications.
But ubiquitous broadband Internet connectivity will revolutionize
integration innovation. Just look at Google’s on-demand desktop.
Today’s desktop leader—Microsoft—competes with Apple and
with Linux-based desktops distributed by companies like Novell/SuSE and Ubuntu,
who allow users to download their free software. However, all three of these
desktop models are facing a competitive threat from on-demand desktops that may
be free (supported by ads) or paid for through yet-to-be determined pricing
schemes.
The early leader in integrated on-demand desktops is Google,
whose ever-expanding website offers a la carte tools in the Google Pack, or
hosted services as part of Google Apps. Yet Google contends that the built-in
search feature of Windows Vista is anticompetitive, not because you can’t set Google’s
Desktop Search as your default (you can), but because Microsoft’s search indexer can’t be
turned off.
But in the on-demand world, Google’s search software is always on, too. At least, it’s always available wherever there’s an Internet connection.
In its 2001 consent decree with Microsoft, the
Justice Department created a virtual "drive-thru window" for filing antitrust complaints against Microsoft. But as one
journalist put it in an eWeek article, this is "competition by
litigation." Even more to the point, it’s competition by getting the states and federal government to litigate and regulate.
Instead of fighting fire with fire, by lobbing antitrust
grenades Google risks a regulatory inferno.
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.