By Melanie Hoffman
The definition of a monopoly is “A situation in which a single company owns all or nearly all of the market for a given type of product or service.”
in the past there have been oil monopolies such as the Standard Oil monopoly which was broken up in 1911, and the trading monopoly headed by the East India Trading Company in the 1600’s. Congress declared that monopolies are illegal, which protects competition between sellers in the marketplace and protects buyers from getting ripped off. Corporate monopolies have been outlawed for years, but what about contemporary monopolies, or situations that may result in monopolies in the future, online?
For example, Google. Google is the most popular and powerful web search engine online today, but according to the definition above, it is not a monopoly. Google is protected by the fact that it is free, and links information that it does not own to the users. In addition, there are other search engines that you can use to fufill the same purpose that Google does, so it does not force the consumer to use its product like a traditional monopoly would.
yet, the first place that users go to search is Google. so for advertisiers, where else would they advertise? in a way, Google has a monopoly over selling keywords and adspace, because many companies do not see online advertising worthwile, if their ad is not posted on Google. Of course, there are other possibiities, but the fact that Google owns over 50% of the market share, makes it most profitable for the advertisers to place their ads on Google. Is this a good brand strategy for Google, or unfair to the other search engines that offer the same service? and would this situation potentially need more regulation in the future, if Google continues to gain a lead in the market share as it has been for the past few years?
here is another blog that discusses this topic in depth,
http://blog.case.edu/andrew.mellino/2006/12/06/googles_monopolies_and_the_internet
2 Comments
October 14, 2008 at 12:12 am
I wrote this post, sorry I thought it would put my name on it, but it didn’t.
October 15, 2008 at 2:07 am
I don’t think we can necessarily say that Google is being “unfair” just because it’s simply successful. I believe that because it’s so embedded in our searches on the internet, Google has become a source that the majority knows and refers to. However, I think Google still demonstrates the elements of a monopoly; it owns 50% of market share. From this power, the only danger would be the advantages Google has and the regulations that they enforce. For example, I wrote a post about the article where Google and Yahoo are making a deal to collaborate; Google is making this move that will most likely establish it as, if not already, a prime internet source. This move overall will definitely make Google be considered a technological monopoly. On the other hand, how could this “monopoly” be regulated if it’s not lawfully distinguished a “monopoly”?