Larry Page and Sergey Brin never liked to interact with journalists. “Larry may be a very sensitive and good person, but he has major trust issues and poor social graces,” a former Google PR man once told me. “Sergey has social graces, but he doesn’t trust people who, according to him, don’t come close to his level of intelligence.”
In the fall of 1999, however, the Google co-founders were urged by their new communications person to visit the East Coast for a modest press tour. Barely a year old, Google was still under most people’s radar, and few knew its fascinating history: Page put the entire World Wide Web on Stanford University’s servers to guess the perfect result for a search query, and Brin did some mathematical magic to fulfill the concept. They tried to sell the technology to one of the big Internet portals, but couldn’t get a deal they liked. So they created their own company. It still wasn’t clear where their revenue would come from. They were said to hate ads, believing that “Ad-supported search engines will be inherently biased in favor of 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, AOL, and the other dominant portals. So the business editor and I took them to lunch at a seafood restaurant downtown. The size and bustle of New York City seemed overwhelming to the odd couple. The idea that their company might one day be worth two trillion dollars seemed about as likely as the Earth slipping off its axis.
A quarter-century later, Google, now called Alphabet, is worth several trillion dollars. Internet search is deeply embedded in our lives, as common as breathing, and Google has a 90 percent global stake. Larry and Sergey, though still shareholders with fortunes exceeding $100 billion each, are no longer employees or board members. And this week, U.S. federal district court judge Amit P. Mehta issued an injunction. 286-page judgmentBased on millions of documents, thousands of exhibits and a nine-week trial, Google violated antitrust law. “Google,” he wrote, “is a monopolist and has acted as such 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 a startup to a big overlord today makes obvious sense. Dominance, even to the point of monopoly, has proven to be the inevitable fate of winners in the age of Internet scale. The digital economy results in winner-take-all competition, where early innovators from humble beginnings can have an edge over entrenched leaders of technologies that will soon be displaced. All of the companies at the top of our current technology heap were founded by enthusiastic young people with a big idea—usually a concept dismissed by the industry giants at the time. Before Larry and Sergey, there was Bill Gates and Paul Allen, two students who saw a market for personal computer software; Steve Jobs and Steve Wozniak, building Apple II computers in a garage; Jeff Bezos, who started Amazon on a shoestring budget to sell stuff on the Internet. A few years after Google got started, Mark Zuckerberg invented Facebook in his dorm room. Those tech companies fighting their way to the top shared a narrative: David versus Goliath.
But those slingshots were something special. The network effects of a persistent, ubiquitous Internet accelerate and entrench category leaders. What’s more, those founders were brutal competitors who made the most of those advantages. Larry Page was obsessed with the story of Nikola Tesla, the brilliant inventor who died in obscurity, and swore to himself that he would not be like Tesla. Microsoft’s use of bundling products to stifle competitors was notorious (and led to an antitrust lawsuit that it lost). Jeff Bezos protected his flank with Napoleonic zeal, keeping customers close with low prices. Young Mark Zuckerberg used to end meetings by shouting the word “Domination!” In the end, as the Davids became Goliaths, they fit a new narrative: the Icarus myth. Fueled by the hubris of their dominance (and mistaking their network-effect-driven rise for their own singular geniuses), their heights took them dangerously close to the sun.
That’s the context of Judge Mehta’s ruling. Specifically, it focuses on Google’s practice of collectively spending tens of billions of dollars for default placement in the address fields of Apple and Mozilla browsers. Google insisted that it could make those deals only 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 even dream of matching. That allows it to improve its search engine in ways that rivals can’t even dream of. It’s legal to achieve a monopoly through a superior product or innovations, but actions that aren’t better than Google’s can be. keep Monopoly, like restriction of competition, is illegal. Therefore, the judge says, Google is breaking the law.
