Speaker 1: CAUs Media.
Speaker 2: Hello and welcome back to Better Offline. I'm your host
Speaker 2: ed Zetron.
Speaker 1: Of course, in.
Speaker 2: The last episode, I went over why Google's monopoly is
Speaker 2: such a problem and why monopolies are a form of
Speaker 2: societal cancer. And in this episode, I'll go over want
Speaker 2: my App and next to Google after their anti trust trial.
Speaker 2: And by the time you hear this, it will have
Speaker 2: been a few weeks since Judge a Amit Meta ruled
Speaker 2: that Google was an illegal monopoly in search and online advertising.
Speaker 2: The next phase of this saga, though not including any appeals,
Speaker 2: will decide what penalties will come. Although it will be
Speaker 2: several months and most likely several years before we learn
Speaker 2: exactly what happens to Google, it's clear that the company
Speaker 2: sits on a dangerous precipice. In addition to a monetary
Speaker 2: penalty which is fairly likely and which could certainly be
Speaker 2: in the billions of dollars, Judge Meta will likely force
Speaker 2: Google to want to take some action that would effectively
Speaker 2: end its monopoly status or at the very least support
Speaker 2: more competition, and we'll get to those in the second
Speaker 2: But it's worth noting that we need to talk about
Speaker 2: how we got here. For this I'm going to be
Speaker 2: heavily relying on Judge Meta's three hundred page ruling. Judge
Speaker 2: Meta didn't concern himself with how Google got big because
Speaker 2: nanto trust law, there's nothing really prohibiting you from achieving
Speaker 2: dominance by being good and better than the competition. And
Speaker 2: to be fair, for the first couple of decades, Google
Speaker 2: was genuinely superior to any alternative. This was evidenced by
Speaker 2: its early reviews with Danny Sullivan, who now works for
Speaker 2: Google as a guy who occasionally pretends to care about
Speaker 2: what reporters think, but at the time he wrote for
Speaker 2: Search Engine Watch and he said, so how about results.
Speaker 2: I think many people will be pleased, especially for the
Speaker 2: ever popular single and two word queries. A search for
Speaker 2: Bill Clinton brought the White House site up at number one.
Speaker 2: A search for Disney top Rankdisney dot Com and sections
Speaker 2: with it like Disney World, the Disney Channel, and Walt
Speaker 2: Disney Picture. Yet interesting alternative sites like Werner's unofficial Disney
Speaker 2: Park links also made it to that list. Now let's
Speaker 2: just taken aside here. I'm just gonna go to Google
Speaker 2: dot Com as we speak. I'm gonna take Disney in
Speaker 2: I'm gonna read you what's on there. So the first
Speaker 2: things at the top are all sponsored. It's sponsored, and
Speaker 2: then tickets and tours is very big font and then
Speaker 2: there's five different options to buy something on trip dot com,
Speaker 2: some sort of vacation package, and then another thing from
Speaker 2: a company called Undercover Tourist. And then the results are
Speaker 2: Disney dot Com and disneyplasen well Disneyworld. But that those
Speaker 2: are like the They are the smallest thing on this
Speaker 2: page compared to the Disney store link in Vegas, and
Speaker 2: the four or five different sponsored pieces of content. And
Speaker 2: if you scroll down, it's Disney Products YouTube, Disney, Disney
Speaker 2: on Eggs, Disney Parks. Oh, this is all pretty good,
Speaker 2: but no original content. There's like one hundred thousand different
Speaker 2: Disney blogs that just aren't on there. Google don't give
Speaker 2: a shit, but they used to. Google also outclassed the
Speaker 2: competition on a technical level, as noted by Brian Durell,
Speaker 2: former sceening of Director of Production Operations at Alta Vista,
Speaker 2: in a hacker Use post. He blamed Altavista's demise on
Speaker 2: its failure to update its result indexes, which in turn
Speaker 2: meant that many of their front page results led to
Speaker 2: outdated or dead links, and I quote this was particularly
Speaker 2: bad because one of our earliest strong points was fresh indexes.
Speaker 2: Our ability to refresh the supplementary index on the flight
Speaker 2: was awesome. When you lose one of your primary strengths,
Speaker 2: it's noticeable, he said, adding that the decline in Altavista's
Speaker 2: index quality was due to a loss of focus within
Speaker 2: the company. Oh would hate for that to happen to Google.
Speaker 2: Google was at the time, both objectively and subjectively better
Speaker 2: than anything else, and so it grew, and like I
Speaker 2: said last episode, it became a verb, kind of like
Speaker 2: how we say photoshop instead of airbrush, or xerox instead
Speaker 2: of photocopy, and better offline listener instead of average criminal.
Speaker 2: Not only did it fend off its earliest competitors, but
Speaker 2: it also brushed past anyone that would try to steal
Speaker 2: its market share, like damp musk Acolyte Jason Kalakanis's Malhallow,
Speaker 2: which was a human created search engine, a bit like
Speaker 2: the early version of Yahoo and Kull, which emphasized its
Speaker 2: larger search indexes and privacy centric ethos as the thingishing factors.
Speaker 2: Just so we are clear, being popular or superior is
Speaker 2: not an antitrust valulation. No, no, no, no, that's not
Speaker 2: the problem. What Google did afterwards was the problem, and
Speaker 2: in the eyes of Judge Meta and the US government,
Speaker 2: was also illegal as a though, a lot of the
Speaker 2: things am about to cite are from this ruling, which
Speaker 2: makes linking to them kind of hard. Please don't be
Speaker 2: mad at me. But much of this ruling discusses something
Speaker 2: called distribution, which refers to how Google makes its search
Speaker 2: product accessible to users. The Google website is the most
Speaker 2: obvious example of that, but it also includes browser and
Speaker 2: device integrations. You ever wonder why the default browser option
Speaker 2: on Safari and Firefox is Google? I kind of said
Speaker 2: it last episode. It's because Google pays these but he's
Speaker 2: a lot of money. In the United States, half of
Speaker 2: all searches happen through an access point were Google is
Speaker 2: paid to be the default. A further twenty percent come
Speaker 2: through Google Chrome, which is made by Google. And does
Speaker 2: it follows that Google is the default search engine? Little
Speaker 2: monopoly and your monopoly hit my ride. Only thirty percent
Speaker 2: of US search queries take place in environments where Google
Speaker 2: is not the default browser, Which is not to say
Speaker 2: that all those searches are going to Duck duck go
Speaker 2: or bing, but rather that consumers have made an active
Speaker 2: decision to use whatever browser they've selected. And while you
Speaker 2: could argue that the consumers could choose to change the
Speaker 2: default on Safari or Firefox to something other than Google,
Speaker 2: the reality is, as shown by Google's own internal research
Speaker 2: and communications, that most consumers either don't know how or
Speaker 2: just don't care to. Another internal study mentioned in the judgment,
Speaker 2: this time from twenty twenty, showed that half of all
Speaker 2: US iPhone users didn't even know what search engine they
Speaker 2: were using. The ruling also points out that in some cases,
Speaker 2: there are inherent points of friction dissuade users from changing
Speaker 2: their default search engine. Switching on Android was arguably more
Speaker 2: difficult than nonios, the ruling said, also noting that the
Speaker 2: smaller screen of a smartphone and general fiddliness of things
Speaker 2: was a further deterrm. Google's own estimates show that if
Speaker 2: it lost search placement on iOS to another provider, it
Speaker 2: would lose between sixty and eighty percent of its traffic
Speaker 2: just because of how tricky it is to change these
Speaker 2: default settings. And so you're starting to get an understanding
Speaker 2: of the importance of these default placement deals for Google
Speaker 2: and how critical they are to its bottom line. In
Speaker 2: twenty twenty one, Mozilla made eighty percent of its operating budget,
Speaker 2: or four hundred million dollars, by selling default placement to Google.
Speaker 2: Two these monopolies have real consequences. Apple meanwhile, owns a
Speaker 2: percentage of advertising revenue from queries made from Safari and Chrome,
Speaker 2: even though Apple doesn't actually bundle Chrome with its devices.
Speaker 2: In twenty twenty two, this amounted to about twenty billion dollars,
Speaker 2: which was double the figure of twenty twenty and amounted
Speaker 2: to one six of Apple's operating profit from that year.
Speaker 2: Google also assigned deals with several US carriers like T Mobile, Verizon,
Speaker 2: in AT, and T, as well as other Android manufacturers,
Speaker 2: including Samsung and Motorola. The terms of these deals differ
Speaker 2: between companies, but they usually account for a percentage of revenue,
Speaker 2: with the actual percentage varying from contract to contract. While
Speaker 2: these deals are undoubtedly good for the balance sheets of
Speaker 2: these companies, they do impose restrictions on what these companies
Speaker 2: can do. Take Samsung, for example, which has around thirty
Speaker 2: one percent of US smartphone market share, second only to Apple.
Speaker 2: In twenty nineteen, Samsung wanted to integrate technology from a
Speaker 2: startup called Branch, which would allow users to search for
Speaker 2: content within installed applications, as well as to a limited extent,
Speaker 2: content from the Internet, although it was not to be
Speaker 2: clear a proper search engine in any real sense. Despite
Speaker 2: how there was a little bit of initial excitement around this,
Speaker 2: Samsung also saw h kind of become clear that the
Speaker 2: way Branch worked conflicted with their agreement with Google, and
Speaker 2: so the software had to be reworked in a way
Speaker 2: that massively limited its functionality. While the partnership went ahead,
Speaker 2: it was nowhere near as lucrative as Branch first hoped.
Speaker 2: The software was crippled and thus much less attractive. Similarly,
Speaker 2: AT and T also wanted to pre install Branch on
Speaker 2: its devices, but decided against it when it couldn't get
Speaker 2: clarity from Google whether it violated the terms of its
Speaker 2: revenue sharing deal. Google, it seemed simply stonewalled AT and
Speaker 2: T into submission. And this is again going back to
Speaker 2: the Matt Stolar interview I did. When you have rules
Speaker 2: like this, when you have monopolies, they do operate like
Speaker 2: miniature governments. And indeed, this is an example Google didn't
Speaker 2: even need to intimidate these people. In most cases, they
Speaker 2: just made enough money and they were scared enough of
Speaker 2: violating the deal that they literally made their devices worse.
Speaker 2: They didn't install cool software for fear that Google might
Speaker 2: sue them and cut off a lucrative revenue share. It's
Speaker 2: nasty even Apple, a company that is at varying times
Speaker 2: close to or the most valuable company in the world,
Speaker 2: itself constrained by this devil's deal with Google. At one point,
Speaker 2: Google insisted on altering the terms of its agreement to
Speaker 2: prevent Apple from suggesting relevant links to users through the
Speaker 2: Safari search bar, as such a feature would be and
Speaker 2: I quote, substantially similar to Google search. Apple, for what
Speaker 2: it's worth, has said that it did not feel constrained
Speaker 2: by these restrictions, which makes it fine with me. Then
Speaker 2: I'm kidding the kidding. I'd argue that they would say
Speaker 2: that because they were making twenty billion dollars each year
Speaker 2: from Google. And if I'm honest, if somebody gave me
Speaker 2: twenty billion dollars, I'd let them do whatever they wanted.
Speaker 2: Hit me with a baseball back, roun me over with
Speaker 2: your car. I don't care call me a pig. I'll
Speaker 2: oink for you. Give me twenty billion dollars. I need
Speaker 2: twenty billion dollars. Please give it to me now. But
Speaker 2: if you can't give me your money, then perhaps you'll
Speaker 2: hand it to one of the extremely well targeted advertisements
Speaker 2: that follow this wonderful message once that will make you
Speaker 2: say wow. This is definitely one that Ed wanted to
Speaker 2: follow what he just said, and we're back. And we're
Speaker 2: back with Google. As I've kind of hinted at, I
Speaker 2: don't think without their ad monopoly and with their Google
Speaker 2: Search monopoly, I don't think Google is a profitable business.
Speaker 2: And I definitely don't think Google Search is a profitable business.
Speaker 2: I think it's actually kind of a cost center. Search
Speaker 2: is in effect the vehicle in how Google gets people
Speaker 2: to look at billions of dollars of advertisements every single day,
Speaker 2: and Google doesn't allow any other competing business to show
Speaker 2: adds on its turf. It has exclusivity, and as the
Speaker 2: ruling found, that exclusivity has allowed Google to raise prices
Speaker 2: at will, looking to see how far it can push
Speaker 2: advertisers before they walk away, you know, to the other
Speaker 2: place they can advertise to this many people in twenty seventeen,
Speaker 2: the company ran an experiment where it strongly increased certain
Speaker 2: prices for a cohor fifteen percent of advertisers for six weeks.
Speaker 2: It found that half of the initial revenue getting stuck,
Speaker 2: and found that there was no significant evidence that advertisers
Speaker 2: were changing what products they don Google would later do
Speaker 2: further studies where it significantly hyped prices on advertisers, and
Speaker 2: each time it learned that it could charge more without
Speaker 2: losing them. While Google acknowledged there was a limit to
Speaker 2: how far it could push things, they believed that there
Speaker 2: was still more value to extract from its customers, and
Speaker 2: so it's set upon a strategy of gradually, though significantly,
Speaker 2: I should add raising prices across short intervals, as in
Speaker 2: the siding. Goddamn, is this company so fucking evil? They
Speaker 2: should be eradicated from existence. The fact that people like
Speaker 2: this function in good societies only prove that there are
Speaker 2: things wrong in the world. Every time I read about them,
Speaker 2: I feel poison in my veins. But there's more. These
Speaker 2: price rises Judge Meta noted were oftentimed when Google was
Speaker 2: at risk of not meeting its revenue goals, and when
Speaker 2: the company was at risk of showing some sort of
Speaker 2: slow down in its ads business. Hey remember the code
Speaker 2: yellow from twenty nineteen from the man that destroyed Google Search,
Speaker 2: that was all around raising metrics because they were worried
Speaker 2: about query growth. Google does not care. They will do
Speaker 2: whatever they need to to make revenue. They will make
Speaker 2: your products worse, they will make it more expensive for
Speaker 2: advertisers to advertise to you. And it's all thanks to
Speaker 2: their goddamn monopolies and these changes, these increases through the
Speaker 2: pricing of advertising and the way that they took money
Speaker 2: from advertisers. They were done with this insane lack of
Speaker 2: transparency and this is really stomach turning, this beer. This company.
Speaker 2: People should be in jail for this. Google didn't tell
Speaker 2: advertisers that the costs were going up, but rather they
Speaker 2: were timing these increases so that these increases could be
Speaker 2: dismissed as noise or ordinary price fluctuations generated within advertising auctions.
Speaker 2: The last point is important, by the way, as Google
Speaker 2: also tried to rig these auctions in their own favor.
Speaker 2: One way they accomplished this, by the way, is by
Speaker 2: removing the ability for advertisers to remove themselves from certain auctions.
Speaker 2: When someone buys a text out on Google, what they're
Speaker 2: really doing is selecting a keyword or keywords under which
Speaker 2: they want their ads to appear. The problem is that
Speaker 2: people may use different words for a search with the
Speaker 2: same intent. So one person might say kid's clothing where
Speaker 2: another might say children's clothing. And this is a problem
Speaker 2: for advertisers because you want to make sure that you
Speaker 2: capture the audience you want, right, And this is a
Speaker 2: problem that Google fixed by adding other relevant keywords to
Speaker 2: an advertiser's bid without telling them. Now, this might seem
Speaker 2: like a nice thing that Google did, making sure that
Speaker 2: your money goes further, right, The problem is, as the
Speaker 2: ruling showed, the Google interpreted the word relevant in the
Speaker 2: broadest way possible, so kids clothing would, as one shot
Speaker 2: shown in the ruling showed, include phrases like newborn children's
Speaker 2: clothing or kid's clothing Canada or Tjmax kids wear. And
Speaker 2: what's great is if you don't like this, you have
Speaker 2: no one else to advertise, with no other choices. And
Speaker 2: while Google initially allowed advertisers to opt out of this feature,
Speaker 2: which they called semantic matching, or use a limited version
Speaker 2: that would only include grammatical variations like pluralization, so children clothing,
Speaker 2: children's clothing, and so on and so forth, They of
Speaker 2: course remove these options. It means that unless the advertiser
Speaker 2: explicitly states what keywords they don't want their advert to
Speaker 2: appear under, they're going to be bid on search results
Speaker 2: that aren't relevant to their needs. And guess who controls
Speaker 2: what are relevant? Google? Google. Google's the one that tells
Speaker 2: you how much money to spend on Google. You don't
Speaker 2: like it, well, you can work with Google to advertise
Speaker 2: on Google, and otherwise you go fuck yourself. And this
Speaker 2: in turn increases the amount of advertisers bidding for space
Speaker 2: in an auction, which in turn results in higher prices
Speaker 2: for advertisers in a completely unpredictable way that's predictably evil.
Speaker 2: Not only does Google control the supply, they literally control
Speaker 2: the demand. And while Google at one point provided advertisers
Speaker 2: with detailed information about their matched keywords and the algorithmically
Speaker 2: selected ones at that it no longer does so. As
Speaker 2: a result, advertisers are effectively forced to guess what keywords
Speaker 2: their ad might appear under, and they have no other
Speaker 2: vendor to go to who might be a little more transparent.
Speaker 2: This in turn, by the way, pushes them to larger
Speaker 2: advertising agencies who have a better relation and ship with Google,
Speaker 2: who might have keyword banks that they know that they
Speaker 2: can cut out so that the advertising dollars are more
Speaker 2: efficiently spent. This in turn makes advertising agencies, especially the
Speaker 2: bigger ones, more powerful and hurt small businesses. It's so
Speaker 2: cool watching this happen. It doesn't make me angry at all.
Speaker 2: But in his ruling, Judge Meta found that Google's practices
Speaker 2: had degraded the quality of its text advertisements and charge
Speaker 2: super competitive prices for text advertisements. At the same time,
Speaker 2: by maintaining Google's stranglehold on the search market, they effectively
Speaker 2: limited how much rivals like Being can make from advertising.
Speaker 2: Even if Microsoft built a better ad tech platform than Google,
Speaker 2: its share of spending would remain in line with its
Speaker 2: market share and I quote here By locking in a
Speaker 2: huge comparatative query volume advantage through its exclusive agreements, Google
Speaker 2: ensures that advertisers will continue to spend ninety percent of
Speaker 2: their text ad dollars with Google, regardless of increases in
Speaker 2: price or decreases in quality. That is an anti competitive
Speaker 2: effect in the marketplace, and as Judge Metter is said
Speaker 2: that is bluddy well right, So what happens next. There's
Speaker 2: four un likely outcomes here, each with their own advantages
Speaker 2: or disadvantages and their own level of probability have come
Speaker 2: into pass and had tip by the way to Adam
Speaker 2: Kolovicik for highlighting these. Google may be ordered to cease
Speaker 2: engaging in default search deals kind of the most obvious one,
Speaker 2: leaving the likes of Apple, Samsung, and Mozilla free to
Speaker 2: sign agreements with other search providers, although these agreements would
Speaker 2: almost certainly be less favorable than their current ones, and
Speaker 2: indeed would be I don't know competitive, It's going to
Speaker 2: be a mess. As the ruling showed, both Apple and
Speaker 2: Mozilla have at times flirted with or been courted by
Speaker 2: the likes of Microsoft and Yahoo, although the terms were
Speaker 2: never as favorable as I mentioned, and guess what they
Speaker 2: didn't take them Judge Meta might although the how is
Speaker 2: pretty difficult here, as Apple and Mozilla aren't defendants in
Speaker 2: this case. Force browser developers to offer use as a
Speaker 2: ballot screen where people could choose what search engine they'd
Speaker 2: like to use. This would probably boost the market share
Speaker 2: of smaller search providers by a small degree, although I
Speaker 2: imagine most would just opt, through habit or preference, to
Speaker 2: pick Google at the very least until a viable alternative
Speaker 2: gains momentum. But this is still a start. It's still good. Well,
Speaker 2: then again, it's entirely possible that people might try something
Speaker 2: new and either because they like what they've selected or
Speaker 2: through sheer inertia, they don't go back to Google. As
Speaker 2: Google's data shows, this is a real threat, especially on mobile,
Speaker 2: which accounts for a massive portion of its search traffic
Speaker 2: and thus its ad revenue. Google may be forced to
Speaker 2: share click and query data with rivals, although again this
Speaker 2: poses its own thorny issues, especially when it comes to privacy.
Speaker 2: At the very least, it should at least tell advertisers
Speaker 2: what keywords they're buying and give them meaningful opportunities to
Speaker 2: opt out of irrelevant queries. While this sounds like a
Speaker 2: minor slap on the wrist, it has the potential to
Speaker 2: cost Google billions. Google's made so much money from forcing
Speaker 2: advertisers to buy slots on searches they don't want or
Speaker 2: care about, and by forcing people into auctions against their
Speaker 2: will or knowledge. When buyers are empowered, it follows that
Speaker 2: the price of ads will decrease commensurate with the lower
Speaker 2: levels of demand, And I don't know consumer choice is
Speaker 2: good and Google does not like consumer choice, so I
Speaker 2: assume it's less profitable to let people choose things. But finally,
Speaker 2: Judge Meta may order the actual breakup of Google, compelling
Speaker 2: the company to divest Chrome, Android, or more than likely
Speaker 2: its advertising division. This remedy is arguably the most potent
Speaker 2: and one that Google is most likely to oppose, and
Speaker 2: it's also the most funny. But let's get into why
Speaker 2: it's thorny. Chrome and Android are based on open source products,
Speaker 2: the chromeum Project and the Android open Source Project, respectively,
Speaker 2: and short of prohibiting Google from contributing code or providing funding,
Speaker 2: it would have a leading role in these developments and
Speaker 2: thus real influence. Moreover, Google's presence in Android isn't just
Speaker 2: in the operating system itself, but everything else called Google
Speaker 2: Mobile Services or GMS. GMS is the package of software
Speaker 2: that turns an Android phone into a Google phone. It
Speaker 2: includes the apps that company installed when you buy a
Speaker 2: Samsung or Gaomi phone, like Gmail, Google Chrome, Google Assistant,
Speaker 2: and so on, and also Google Gemini, as well as
Speaker 2: the APIs that allow third party applications to integrate with them.
Speaker 2: Any ruling that doesn't force Google to divest these components
Speaker 2: is for the most part, toothless, and any ruling that
Speaker 2: says effectively that Google can no longer build apps, or
Speaker 2: rather build apps for the mobile os it's most closely
Speaker 2: associated with, it's kind of hard to imagine. Moreover, Google
Speaker 2: could also just ditch Android. It's already working on its
Speaker 2: own OS called Future. It's already using Future in production devices,
Speaker 2: though it's unclear how invested they are in the project,
Speaker 2: and as I've previously mentioned in the last episode, I
Speaker 2: don't know how much staying power anything new and Google
Speaker 2: actually has. Combine this with native support for existing Android apps,
Speaker 2: which it likely already has and if not, could be
Speaker 2: implemented as others like Microsoft and Huawei have pretended to,
Speaker 2: it would effectively skirt any restrictions imposed on Google's involvement
Speaker 2: in Android proper. The biggest scariest thing for Google would
Speaker 2: be any separation of church and state between Google Search
Speaker 2: and its ap avertising platform. Doing so would be potentially
Speaker 2: ruinous for this company, which is why Google will do
Speaker 2: literally anything to stop it. But it's the remedy that
Speaker 2: would actually change things. Google's lack of competition in search
Speaker 2: is a symptom of its ability to set pricing in
Speaker 2: terms of advertising on search, and it's a problem that
Speaker 2: can be solved by removing its ability to do so.
Speaker 2: And let's face it, Google Search doesn't make that much
Speaker 2: money on its own. The thing that brings home the
Speaker 2: bacon is the ads on search and the ads you
Speaker 2: get with each query. If the ad business becomes its
Speaker 2: own separate entity, Google will have to entirely rethink how
Speaker 2: it monetizes search. And for san Da Pischai, that's a
Speaker 2: terrifying thought. I mean, what's he do? How do you
Speaker 2: rig the tables if you don't own the casino? And
Speaker 2: by the way, I'm in beautiful Las Vegas, Nevada. We
Speaker 2: they never rigged the tables here. That's sacrilegious. But it's
Speaker 2: not like there's another business for him to fall back upon.
Speaker 2: As a discussed at the end of the last episode,
Speaker 2: Google's largely lost the ability to innovate and execute on
Speaker 2: new ideas, and a new ideas that do eventually hit
Speaker 2: the market are usually and often just in a few months. Murdered,
Speaker 2: the bolt gun comes out chunk. They throw them in
Speaker 2: the open grave with Google Reader. But seriously, what does
Speaker 2: Google have other than products that directly lead to its
Speaker 2: own advertising technologies. What is there besides Cloud? And even
Speaker 2: Cloud is a marginal player at best when compared to
Speaker 2: Microsoft's Azure and Amazon's Aws. There's nothing. Before you get
Speaker 2: too excited, it is worth noting that Google will no
Speaker 2: doubt fight this ruling to the very end, using every
Speaker 2: single avenue of appeal, every dirty trick, until they're successful
Speaker 2: or they've run out of options. These little fuckers are
Speaker 2: going to go after everything, and they're going to look
Speaker 2: specifically an appeal, which, by the way, little Apple loup
Speaker 2: court session for you here, and if there's a loyalist thing,
Speaker 2: I'm sorry. Basically, Apple loop court appeals are not a
Speaker 2: retrial of the facts. It is a procedural thing. They'll
Speaker 2: be looking to see whether the judge meta messed up.
Speaker 2: And I'll tell you a little bit about how that's
Speaker 2: happened in the past and how bad that is and
Speaker 2: why I'm a little worried it might work. Sure, there's
Speaker 2: now a bipartisan dislike a big tech and I don't
Speaker 2: think any of the recently appointed Supreme Court judges other
Speaker 2: than the ones that might be on the take.
Speaker 3: I don't know.
Speaker 2: I don't think they care about Google. Trump doesn't like Google,
Speaker 2: Harris doesn't like Google. I don't think anyone that's coming
Speaker 2: up is going to be like, we must protect the
Speaker 2: most evil tech company of them all other than Beta.
Speaker 2: They hate them, and Google Search is bad for most people.
Speaker 2: Most people realize this is a problem, and this ruling,
Speaker 2: by the way, despite it being extremely long, is really
Speaker 2: worth reading. It was very forensic in its case against Google.
Speaker 2: The facts on the ground and those obtained through discovery,
Speaker 2: they're pretty hard to argue with. On the flip side,
Speaker 2: Google also has near unlimited funds to throw out this
Speaker 2: legal bow, which, as I point out in a bit
Speaker 2: is absolutely existential for Google and their law being to
Speaker 2: try and change their fate, hope they lose, and depressingly,
Speaker 2: the US hasn't proven particularly effective at curbing this horrible
Speaker 2: monopoly bullshit in the past, and I'm going to tell
Speaker 2: you why. But before I do that, do you have money?
Speaker 2: Do you have a wallet? Are there credit cards in
Speaker 2: the wallet? Perhaps this upcoming product might be a thing
Speaker 2: that you could stick your credit card in, or maybe
Speaker 2: it's a podcast that you could download for free. I
Speaker 2: don't know. I'm not an advertiser. I'm just the guy
Speaker 2: speaking before the ads. Now, the ads that follow, they're
Speaker 2: directly chosen from my brain. They have a neuralink in Serbia.
Speaker 2: I've got the third neuralink and it's connected to the
Speaker 2: ad server with the company, and that's why all of
Speaker 2: these ads are so well targeted.
Speaker 3: Please to enjoy it, and we're back.
Speaker 2: But now it's time for a little history lesson and
Speaker 2: a story about how remarkably different the computing market could
Speaker 2: look today if legislation had actually succeeded. In the nineteen eighties,
Speaker 2: ms DOS rapidly emerged as the dominant operating system for
Speaker 2: IBM compatible computers, and by the end of the decade,
Speaker 2: it held eighty percent of the market. What its growth
Speaker 2: was in no small part due to Microsoft's chummy relationship
Speaker 2: with IBM. They also benefited from changing market conditions, some
Speaker 2: savy tech and business moves, and a few missteps by
Speaker 2: the competitors. But no, it wouldn't be fair to ascribe
Speaker 2: Microsoft's success just to its vast resources and technical chops.
Speaker 2: He also resorted to strong arming hardware manufacturers and too
Speaker 2: only selling computers with Windows or ms DOSS, or making
Speaker 2: Windows and ms DOS artificially more preferable to buying an alternative.
Speaker 2: One tactic, which started in nineteen eighty three and continued
Speaker 2: until the mid nineties, was the force manufacturers to sell
Speaker 2: an ms DOS license with each machine, even if the
Speaker 2: customer wanted something like bos Ors two. This would be
Speaker 2: done by strong arming vendors into buying licenses in bulk,
Speaker 2: and not as you'd perhaps expect by demand for the
Speaker 2: product because the product was better. Now, how'd they do this?
Speaker 2: What they did was they set the individual license price
Speaker 2: for an ms DOS license so high that buying in
Speaker 2: bulk was basically the only way to do it, and
Speaker 2: outright refused to sell to any vendor that purchased alternatives,
Speaker 2: or they just refused to sell them Windows. In the
Speaker 2: show notes, I've linked to the great paper from the
Speaker 2: summer nineteen ninety five issue of the Anti Trust Bulletin
Speaker 2: Journal about this. It's sickening. Microsoft's insistence on bulk licensing
Speaker 2: agreements meant that asking for a competing operating system wouldn't
Speaker 2: actually reduce the cost of the computer. Instead, it would
Speaker 2: increase it because the vendor had already bought a specific
Speaker 2: number of licenses, and they're incentivized to bundle the cost
Speaker 2: into each machine they sell. Buying a competing operating system
Speaker 2: like dr doss would in fact mean paying twice for
Speaker 2: an operating system. It sucks. These licenses would typically only
Speaker 2: valid for two years, which by the way, cost Microsoft.
Speaker 2: There was no price difference. They just chose this, and
Speaker 2: Microsoft didn't provide any refunds for unused licenses, meaning vendors
Speaker 2: had an incentive to aggressively offload them onto customers, like
Speaker 2: providing them for free or cheaply with anyone who a
Speaker 2: new computer, or by framing it a stars as a
Speaker 2: perk purchase. Another tactic designed to bolster sales of Microsoft's
Speaker 2: productivity software while crippling its rivals, was to use secret
Speaker 2: APIs to control windows that were only accessible to Microsoft
Speaker 2: software and not to anyone else. Microsoft's rivals claimed that
Speaker 2: these public APIs were generally speaking, not as good and
Speaker 2: meant that their software performed worse on Windows, which by
Speaker 2: the early nineteen nineties had reached near monopoly status in
Speaker 2: the PC market. The YouTube channel retrobytes goes into this
Speaker 2: practice in some detail. If you're curious, and I'll link
Speaker 2: to that in the notes. Anyway, My point is that
Speaker 2: Microsoft was a bit of a bastard back then, argue
Speaker 2: they still are, and by the mid nineties they were
Speaker 2: already facing some scrutiny from the FTC, which opened investigations
Speaker 2: and delivered a couple of little slaps on the wrist,
Speaker 2: which Microsoft, of course fought. In nineteen ninety five, Microsoft
Speaker 2: released Internet Explorer, its first entrant into the web browser market,
Speaker 2: which competed with early style works like Mosaic, as well
Speaker 2: as Netscape, which was the dominant player at the time,
Speaker 2: an opera which was rapidly gaining THEMNENTUS. Microsoft knew the
Speaker 2: Internet was going to be a huge deal, and so
Speaker 2: it did everything it could to make Internet Explorer the
Speaker 2: dominant browser. This included bundling Ie with Windows and structuring
Speaker 2: it so that you couldn't remove Internet Explorer without breaking
Speaker 2: parts of the operating system. Rivals also claimed that Internet
Speaker 2: Explorer benefited from hidden APIs, which in turn mean that
Speaker 2: competing browsers wouldn't work quite as well. In nineteen ninety eight,
Speaker 2: the US Department of Justice filed a suit against Microsoft,
Speaker 2: accusing it of breaching the Sherman Act, the same law
Speaker 2: that Judge Ammitt Meta rulled Google violated by establishing a
Speaker 2: near monopoly of the X eighty six computer market, and
Speaker 2: Microsoft lost the trial and the release of Bill Gates's
Speaker 2: deposition takes, which are hilarious. He responded with I don't
Speaker 2: recall to most questions and he asked for the definition
Speaker 2: of WI een ask anyway. It was humiliating for Microsoft.
Speaker 2: In two thousand, Judge Thomas Penfield Jackson ordered the breakup
Speaker 2: of Microsoft into two companies, one responsible for the operating
Speaker 2: system and one that would create applications. As you'd expect,
Speaker 2: Microsoft appealed, and the following year in Apple Look, Court
Speaker 2: reversed the ruling on a technicality as Judge Jackson had
Speaker 2: improperly discussed the case with the media before its conclusion.
Speaker 2: While the findings of the case stood, Jackson's ruling was overturned,
Speaker 2: allowing Microsoft to reach a settlement with the Department of Justice,
Speaker 2: and so we got another slap on the rest. Microsoft
Speaker 2: would have to share its private APIs with competitors and
Speaker 2: agreed to five years of monitoring where a Department of
Speaker 2: Justice representative could unannounced sharp up to its officers and
Speaker 2: demand access to source code and records. The Department of
Speaker 2: Justice also created a technical committee, which consisted of three experts,
Speaker 2: none of whom could be recent Microsoft employees or contractors,
Speaker 2: to ensure their compliance. Microsoft could, however, keep bundling software
Speaker 2: like Internet Explorer with its operating system, which meant that
Speaker 2: its near monopoly on the browser market would remain relatively
Speaker 2: unchallenged for another eight years until Google Chrome arrived. I
Speaker 2: don't take any pleasure in saying that I loathed Google.
Speaker 2: As someone who grew up on the Internet, it was
Speaker 2: really the product that showed me the possibilities of the
Speaker 2: Web and expanded my horizons with every search and click
Speaker 2: I used Google. Shit done, I still do. None of
Speaker 2: us like that Google's bad. I wish it was good.
Speaker 2: It was, and as I've already said, I've said this
Speaker 2: a lot of times, it was a really good product
Speaker 2: at the time, and it was good like five ten
Speaker 2: years ago, I swear. But now it's become corrupted. Now
Speaker 2: Google is just at its core rotten. This company used
Speaker 2: to say, don't be evil.
Speaker 1: I know.
Speaker 2: One of the early jokes in the show was the
Speaker 2: Lionel Huts thing with the red marker, and it's don't
Speaker 2: comma be evil exclamation mark, But that's kind of what
Speaker 2: it is now. They just distort markets, they block competition.
Speaker 2: They don't give a.
Speaker 3: Fuck about you.
Speaker 2: They don't give a fuck about their advertisers. They know
Speaker 2: everyone's trapped in the system. They're also just boring now.
Speaker 2: I remember when Google launched Gmail, I remember the hubbub.
Speaker 2: I remember people selling the invites on eBay. It was
Speaker 2: genuinely cool, and it was far superior to everything else
Speaker 2: on the market, hot Mail, Yahoo Mail. They were dogshit
Speaker 2: in comparison, you know, I'm ray. Google Docs, Google Reader, Rip,
Speaker 2: and even Google Fiber were all ambitious, clever, and worthwhile
Speaker 2: products that actually people like and use and are happy with.
Speaker 2: Now we have Android phones with AI features that nobody wants,
Speaker 2: these horrible, dreadful generative AI tools that mislead and misrepresent,
Speaker 2: and a family of products that, while once genuinely were useful,
Speaker 2: they feel like stale and unhelpful. They don't feel like
Speaker 2: they're made for human beings. They feel like little experiments
Speaker 2: except where the rats man. That's cliche. Oh well, and
Speaker 2: there's a genuine chance here though, there really is. I
Speaker 2: know I've kind of given you a little bit of
Speaker 2: a cynical view there is a chance here that if
Speaker 2: Judge Metta truly punishes Google, that it could genuinely fix
Speaker 2: this company by destroying it. And I think that's a
Speaker 2: good thing for the future of the tech industry. Google
Speaker 2: as a company used to be symbolic of a kind
Speaker 2: of stable equilibrium and capitalism, a profitable company that made
Speaker 2: societally useful products, ones that change lives mostly for the better,
Speaker 2: with a culture that actively encouraged a kind of digital
Speaker 2: experimentation that in turn led to better, cooler products like
Speaker 2: Gmail and Google News. And let me just be really
Speaker 2: abundantly clear, that company is dead. Google as you know
Speaker 2: it is dead. What remains is alphabet, a private equity
Speaker 2: firm run by a management consolean hiring other management consultants
Speaker 2: to dump money into dominating industries and extracting as much
Speaker 2: value as possible before the market's collapse. Google is lazy, languid, ugly,
Speaker 2: bereft of innovation, and bereft of the kind of culture
Speaker 2: that made it so powerful in the first place. This
Speaker 2: isn't a company full of genius engineers allowed to do
Speaker 2: great work. It's a company run by assholes. It's a
Speaker 2: company run by management consultants, sundarp is shy. He is
Speaker 2: cancerous to innovation. He makes two hundred million dollars making
Speaker 2: products worse yet more profitable. Prabagar Ragavan is a poison
Speaker 2: in the veins of Silicon Valley, and Liz read is
Speaker 2: a class trait to so the engineers that actually care
Speaker 2: about creating great products. At sixteen hundred Amphitheata Parkway. The
Speaker 2: company Google deserves to be obliterated because in its current form,
Speaker 2: it is defaulted on its duty to the tech industry,
Speaker 2: to its customers, and even to its own mission. The
Speaker 2: only way to fix Google is to destroy it and
Speaker 2: to force it to start earning customers again. To fix
Speaker 2: the tech industry, we must obliterate every single one of
Speaker 2: these monopolies metas hold on advertising, Apples, hold on the
Speaker 2: app store, Googles, hold on Search and its associated advertising arms.
Speaker 2: Every single one flies in the face of Yu and
Speaker 2: I love technology and runs counter to the notion that
Speaker 2: Silicon Valley has a meaningful place in society. All of
Speaker 2: these people, they talk about the meritocracy, they talk about
Speaker 2: earning one's place. It's hard graft and burning that makes
Speaker 2: these great companies. But look at them. Do any of
Speaker 2: these companies really look like they're built out of hard work. No,
Speaker 2: they giant cons cons wrapped in companies, wrapped in monopolies,
Speaker 2: wrapped in bullshit that makes products worse. Big Tech had
Speaker 2: a really good thing going. Big Tech made so much
Speaker 2: money without really trying that hard, and all they had
Speaker 2: to do was not get too greedy. But they did.
Speaker 2: They always do. So we as a society should reject
Speaker 2: companies over a certain size, and we should indeed reject
Speaker 2: everything that Big Tech is saying about their hard work.
Speaker 2: The GENERATIVEAI boom is disgusting, and it's disgusting because it
Speaker 2: shows such an incredible contempt for society itself, for the
Speaker 2: creators that it's depriving of a future because bosses are
Speaker 2: lazy and don't trust their customers or care about the
Speaker 2: customers enough to provide them with real things made by
Speaker 2: real humans. Generative AI is just proof that these companies
Speaker 2: can't innovate anymore. It's proof that they don't care about
Speaker 2: the customer enough to create something useful, and honestly, it
Speaker 2: shows that they don't know how to run real companies anymore.
Speaker 2: So I challenge you, the listener, to continue to critique
Speaker 2: these companies. To move away from their software where you can,
Speaker 2: and they know how impossible that is because of these monopolies.
Speaker 2: But I also encourage you to talk to your friends,
Speaker 2: your family, especially those not super online, and tell them
Speaker 2: about monopolies. Tell them about this podcast, sure, but talk
Speaker 2: to them about monopolies. Make monopolies general parlance in good conversation.
Speaker 2: Look for the monopolies in your life. Look at how
Speaker 2: people have successful businesses, not from providing a great product,
Speaker 2: but from fucking everyone around them, from cheating. Because that's
Speaker 2: what a monopoly is. It's a cheat, a cheat by
Speaker 2: a lazy person, a cheat by an incurious person, a
Speaker 2: cheat from a scumbag. And you're not like them. I
Speaker 2: know that, and I want you to talk about monopolies
Speaker 2: in your general life. I know it sounds silly, I
Speaker 2: know it sounds ridiculous like talking to regular people about this,
Speaker 2: but these monopolies ruin your life. These monopolies are where
Speaker 2: so many pain points in your lives come from, both
Speaker 2: in tech and in regular lives. Thank you so much
Speaker 2: for listening to this, thank you so much for giving
Speaker 2: me your time. And as I've kind of hinted before,
Speaker 2: we've been renewed for a second season. You've got a
Speaker 2: few more episodes of season one before season two starts,
Speaker 2: and nothing's really gonna change. But again, I'm so grateful
Speaker 2: to have you as listeners. I really am. It's a
Speaker 2: pleasure to do this, it's a pleasure to serve you,
Speaker 2: and I will be trying to make it better. I
Speaker 2: don't really have a way of monopolizing anything, and also
Speaker 2: I don't think I have that in me. I'm just
Speaker 2: too pissed naturally, have a great week. Thank you for
Speaker 2: listening to Better Offline. The editor and composer of the
Speaker 2: Better Offline theme song is Matasowski. You can check out
Speaker 2: more of his music and audio projects at Matasowski dot com,
Speaker 2: M A T t O. S O w Ski dot com.
Speaker 2: You can email me at easy at Better offline dot
Speaker 2: com or visit Better offline dot com to find more
Speaker 2: podcast links and of course, my newsletter. I also really
Speaker 2: recommend you go to chat dot Where's youread dot at
Speaker 2: to visit the discord, and go to our slash Better
Speaker 2: Offline to check out I'll Reddit. Thank you so much
Speaker 2: for listening. Better Offline is a production of Cool Zone Media.
Speaker 2: For more from Cool Zone Media, visit our website cool
Speaker 2: zonemedia dot com, or check us out on the iHeartRadio app,
Speaker 2: Apple Podcasts, or wherever you get your podcasts.