September 6, 2024 • 36 mins
In this episode, Ed Zitron walks you through how Google used their monopolies over search and search advertising to scam advertisers - and why the entire tech industry should demand that Google is broken up and forced to compete like the rest of us.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
CAUs Media.
Speaker 2 (00:05):
Hello and welcome back to Better Offline. I'm your host
ed Zetron.
Speaker 1 (00:09):
Of course, in.
Speaker 2 (00:21):
The last episode, I went over why Google's monopoly is
such a problem and why monopolies are a form of
societal cancer. And in this episode, I'll go over want
my App and next to Google after their anti trust trial.
And by the time you hear this, it will have
been a few weeks since Judge a Amit Meta ruled
that Google was an illegal monopoly in search and online advertising.
The next phase of this saga, though not including any appeals,
(00:44):
will decide what penalties will come. Although it will be
several months and most likely several years before we learn
exactly what happens to Google, it's clear that the company
sits on a dangerous precipice. In addition to a monetary
penalty which is fairly likely and which could certainly be
in the billions of dollars, Judge Meta will likely force
Google to want to take some action that would effectively
(01:05):
end its monopoly status or at the very least support
more competition, and we'll get to those in the second
But it's worth noting that we need to talk about
how we got here. For this I'm going to be
heavily relying on Judge Meta's three hundred page ruling. Judge
Meta didn't concern himself with how Google got big because
nanto trust law, there's nothing really prohibiting you from achieving
(01:26):
dominance by being good and better than the competition. And
to be fair, for the first couple of decades, Google
was genuinely superior to any alternative. This was evidenced by
its early reviews with Danny Sullivan, who now works for
Google as a guy who occasionally pretends to care about
what reporters think, but at the time he wrote for
Search Engine Watch and he said, so how about results.
I think many people will be pleased, especially for the
(01:48):
ever popular single and two word queries. A search for
Bill Clinton brought the White House site up at number one.
A search for Disney top Rankdisney dot Com and sections
with it like Disney World, the Disney Channel, and Walt
Disney Picture. Yet interesting alternative sites like Werner's unofficial Disney
Park links also made it to that list. Now let's
just taken aside here. I'm just gonna go to Google
(02:09):
dot Com as we speak. I'm gonna take Disney in
I'm gonna read you what's on there. So the first
things at the top are all sponsored. It's sponsored, and
then tickets and tours is very big font and then
there's five different options to buy something on trip dot com,
some sort of vacation package, and then another thing from
(02:31):
a company called Undercover Tourist. And then the results are
Disney dot Com and disneyplasen well Disneyworld. But that those
are like the They are the smallest thing on this
page compared to the Disney store link in Vegas, and
the four or five different sponsored pieces of content. And
if you scroll down, it's Disney Products YouTube, Disney, Disney
(02:52):
on Eggs, Disney Parks. Oh, this is all pretty good,
but no original content. There's like one hundred thousand different
Disney blogs that just aren't on there. Google don't give
a shit, but they used to. Google also outclassed the
competition on a technical level, as noted by Brian Durell,
former sceening of Director of Production Operations at Alta Vista,
in a hacker Use post. He blamed Altavista's demise on
(03:12):
its failure to update its result indexes, which in turn
meant that many of their front page results led to
outdated or dead links, and I quote this was particularly
bad because one of our earliest strong points was fresh indexes.
Our ability to refresh the supplementary index on the flight
was awesome. When you lose one of your primary strengths,
it's noticeable, he said, adding that the decline in Altavista's
(03:35):
index quality was due to a loss of focus within
the company. Oh would hate for that to happen to Google.
Google was at the time, both objectively and subjectively better
than anything else, and so it grew, and like I
said last episode, it became a verb, kind of like
how we say photoshop instead of airbrush, or xerox instead
of photocopy, and better offline listener instead of average criminal.
(03:57):
Not only did it fend off its earliest competitors, but
it also brushed past anyone that would try to steal
its market share, like damp musk Acolyte Jason Kalakanis's Malhallow,
which was a human created search engine, a bit like
the early version of Yahoo and Kull, which emphasized its
larger search indexes and privacy centric ethos as the thingishing factors.
(04:18):
Just so we are clear, being popular or superior is
not an antitrust valulation. No, no, no, no, that's not
the problem. What Google did afterwards was the problem, and
in the eyes of Judge Meta and the US government,
was also illegal as a though, a lot of the
things am about to cite are from this ruling, which
makes linking to them kind of hard. Please don't be
mad at me. But much of this ruling discusses something
(04:41):
called distribution, which refers to how Google makes its search
product accessible to users. The Google website is the most
obvious example of that, but it also includes browser and
device integrations. You ever wonder why the default browser option
on Safari and Firefox is Google? I kind of said
it last episode. It's because Google pays these but he's
a lot of money. In the United States, half of
(05:03):
all searches happen through an access point were Google is
paid to be the default. A further twenty percent come
through Google Chrome, which is made by Google. And does
it follows that Google is the default search engine? Little
monopoly and your monopoly hit my ride. Only thirty percent
of US search queries take place in environments where Google
is not the default browser, Which is not to say
(05:25):
that all those searches are going to Duck duck go
or bing, but rather that consumers have made an active
decision to use whatever browser they've selected. And while you
could argue that the consumers could choose to change the
default on Safari or Firefox to something other than Google,
the reality is, as shown by Google's own internal research
and communications, that most consumers either don't know how or
(05:46):
just don't care to. Another internal study mentioned in the judgment,
this time from twenty twenty, showed that half of all
US iPhone users didn't even know what search engine they
were using. The ruling also points out that in some cases,
there are inherent points of friction dissuade users from changing
their default search engine. Switching on Android was arguably more
(06:07):
difficult than nonios, the ruling said, also noting that the
smaller screen of a smartphone and general fiddliness of things
was a further deterrm. Google's own estimates show that if
it lost search placement on iOS to another provider, it
would lose between sixty and eighty percent of its traffic
just because of how tricky it is to change these
default settings. And so you're starting to get an understanding
(06:30):
of the importance of these default placement deals for Google
and how critical they are to its bottom line. In
twenty twenty one, Mozilla made eighty percent of its operating budget,
or four hundred million dollars, by selling default placement to Google.
Two these monopolies have real consequences. Apple meanwhile, owns a
percentage of advertising revenue from queries made from Safari and Chrome,
(06:50):
even though Apple doesn't actually bundle Chrome with its devices.
In twenty twenty two, this amounted to about twenty billion dollars,
which was double the figure of twenty twenty and amounted
to one six of Apple's operating profit from that year.
Google also assigned deals with several US carriers like T Mobile, Verizon,
in AT, and T, as well as other Android manufacturers,
including Samsung and Motorola. The terms of these deals differ
(07:13):
between companies, but they usually account for a percentage of revenue,
with the actual percentage varying from contract to contract. While
these deals are undoubtedly good for the balance sheets of
these companies, they do impose restrictions on what these companies
can do. Take Samsung, for example, which has around thirty
one percent of US smartphone market share, second only to Apple.
In twenty nineteen, Samsung wanted to integrate technology from a
(07:36):
startup called Branch, which would allow users to search for
content within installed applications, as well as to a limited extent,
content from the Internet, although it was not to be
clear a proper search engine in any real sense. Despite
how there was a little bit of initial excitement around this,
Samsung also saw h kind of become clear that the
(07:56):
way Branch worked conflicted with their agreement with Google, and
so the software had to be reworked in a way
that massively limited its functionality. While the partnership went ahead,
it was nowhere near as lucrative as Branch first hoped.
The software was crippled and thus much less attractive. Similarly,
AT and T also wanted to pre install Branch on
its devices, but decided against it when it couldn't get
(08:18):
clarity from Google whether it violated the terms of its
revenue sharing deal. Google, it seemed simply stonewalled AT and
T into submission. And this is again going back to
the Matt Stolar interview I did. When you have rules
like this, when you have monopolies, they do operate like
miniature governments. And indeed, this is an example Google didn't
even need to intimidate these people. In most cases, they
(08:40):
just made enough money and they were scared enough of
violating the deal that they literally made their devices worse.
They didn't install cool software for fear that Google might
sue them and cut off a lucrative revenue share. It's
nasty even Apple, a company that is at varying times
close to or the most valuable company in the world,
(09:00):
itself constrained by this devil's deal with Google. At one point,
Google insisted on altering the terms of its agreement to
prevent Apple from suggesting relevant links to users through the
Safari search bar, as such a feature would be and
I quote, substantially similar to Google search. Apple, for what
it's worth, has said that it did not feel constrained
by these restrictions, which makes it fine with me. Then
(09:20):
I'm kidding the kidding. I'd argue that they would say
that because they were making twenty billion dollars each year
from Google. And if I'm honest, if somebody gave me
twenty billion dollars, I'd let them do whatever they wanted.
Hit me with a baseball back, roun me over with
your car. I don't care call me a pig. I'll
oink for you. Give me twenty billion dollars. I need
twenty billion dollars. Please give it to me now. But
(09:40):
if you can't give me your money, then perhaps you'll
hand it to one of the extremely well targeted advertisements
that follow this wonderful message once that will make you
say wow. This is definitely one that Ed wanted to
follow what he just said, and we're back. And we're
(10:03):
back with Google. As I've kind of hinted at, I
don't think without their ad monopoly and with their Google
Search monopoly, I don't think Google is a profitable business.
And I definitely don't think Google Search is a profitable business.
I think it's actually kind of a cost center. Search
is in effect the vehicle in how Google gets people
to look at billions of dollars of advertisements every single day,
(10:25):
and Google doesn't allow any other competing business to show
adds on its turf. It has exclusivity, and as the
ruling found, that exclusivity has allowed Google to raise prices
at will, looking to see how far it can push
advertisers before they walk away, you know, to the other
place they can advertise to this many people in twenty seventeen,
the company ran an experiment where it strongly increased certain
(10:47):
prices for a cohor fifteen percent of advertisers for six weeks.
It found that half of the initial revenue getting stuck,
and found that there was no significant evidence that advertisers
were changing what products they don Google would later do
further studies where it significantly hyped prices on advertisers, and
each time it learned that it could charge more without
(11:07):
losing them. While Google acknowledged there was a limit to
how far it could push things, they believed that there
was still more value to extract from its customers, and
so it's set upon a strategy of gradually, though significantly,
I should add raising prices across short intervals, as in
the siding. Goddamn, is this company so fucking evil? They
should be eradicated from existence. The fact that people like
(11:28):
this function in good societies only prove that there are
things wrong in the world. Every time I read about them,
I feel poison in my veins. But there's more. These
price rises Judge Meta noted were oftentimed when Google was
at risk of not meeting its revenue goals, and when
the company was at risk of showing some sort of
slow down in its ads business. Hey remember the code
(11:49):
yellow from twenty nineteen from the man that destroyed Google Search,
that was all around raising metrics because they were worried
about query growth. Google does not care. They will do
whatever they need to to make revenue. They will make
your products worse, they will make it more expensive for
advertisers to advertise to you. And it's all thanks to
(12:09):
their goddamn monopolies and these changes, these increases through the
pricing of advertising and the way that they took money
from advertisers. They were done with this insane lack of
transparency and this is really stomach turning, this beer. This company.
People should be in jail for this. Google didn't tell
advertisers that the costs were going up, but rather they
were timing these increases so that these increases could be
(12:32):
dismissed as noise or ordinary price fluctuations generated within advertising auctions.
The last point is important, by the way, as Google
also tried to rig these auctions in their own favor.
One way they accomplished this, by the way, is by
removing the ability for advertisers to remove themselves from certain auctions.
When someone buys a text out on Google, what they're
really doing is selecting a keyword or keywords under which
(12:55):
they want their ads to appear. The problem is that
people may use different words for a search with the
same intent. So one person might say kid's clothing where
another might say children's clothing. And this is a problem
for advertisers because you want to make sure that you
capture the audience you want, right, And this is a
problem that Google fixed by adding other relevant keywords to
an advertiser's bid without telling them. Now, this might seem
(13:17):
like a nice thing that Google did, making sure that
your money goes further, right, The problem is, as the
ruling showed, the Google interpreted the word relevant in the
broadest way possible, so kids clothing would, as one shot
shown in the ruling showed, include phrases like newborn children's
clothing or kid's clothing Canada or Tjmax kids wear. And
(13:39):
what's great is if you don't like this, you have
no one else to advertise, with no other choices. And
while Google initially allowed advertisers to opt out of this feature,
which they called semantic matching, or use a limited version
that would only include grammatical variations like pluralization, so children clothing,
children's clothing, and so on and so forth, They of
course remove these options. It means that unless the advertiser
(14:01):
explicitly states what keywords they don't want their advert to
appear under, they're going to be bid on search results
that aren't relevant to their needs. And guess who controls
what are relevant? Google? Google. Google's the one that tells
you how much money to spend on Google. You don't
like it, well, you can work with Google to advertise
on Google, and otherwise you go fuck yourself. And this
(14:22):
in turn increases the amount of advertisers bidding for space
in an auction, which in turn results in higher prices
for advertisers in a completely unpredictable way that's predictably evil.
Not only does Google control the supply, they literally control
the demand. And while Google at one point provided advertisers
with detailed information about their matched keywords and the algorithmically
(14:45):
selected ones at that it no longer does so. As
a result, advertisers are effectively forced to guess what keywords
their ad might appear under, and they have no other
vendor to go to who might be a little more transparent.
This in turn, by the way, pushes them to larger
advertising agencies who have a better relation and ship with Google,
who might have keyword banks that they know that they
can cut out so that the advertising dollars are more
efficiently spent. This in turn makes advertising agencies, especially the
(15:08):
bigger ones, more powerful and hurt small businesses. It's so
cool watching this happen. It doesn't make me angry at all.
But in his ruling, Judge Meta found that Google's practices
had degraded the quality of its text advertisements and charge
super competitive prices for text advertisements. At the same time,
by maintaining Google's stranglehold on the search market, they effectively
(15:30):
limited how much rivals like Being can make from advertising.
Even if Microsoft built a better ad tech platform than Google,
its share of spending would remain in line with its
market share and I quote here By locking in a
huge comparatative query volume advantage through its exclusive agreements, Google
ensures that advertisers will continue to spend ninety percent of
their text ad dollars with Google, regardless of increases in
(15:53):
price or decreases in quality. That is an anti competitive
effect in the marketplace, and as Judge Metter is said
that is bluddy well right, So what happens next. There's
four un likely outcomes here, each with their own advantages
or disadvantages and their own level of probability have come
into pass and had tip by the way to Adam
Kolovicik for highlighting these. Google may be ordered to cease
(16:16):
engaging in default search deals kind of the most obvious one,
leaving the likes of Apple, Samsung, and Mozilla free to
sign agreements with other search providers, although these agreements would
almost certainly be less favorable than their current ones, and
indeed would be I don't know competitive, It's going to
be a mess. As the ruling showed, both Apple and
Mozilla have at times flirted with or been courted by
(16:37):
the likes of Microsoft and Yahoo, although the terms were
never as favorable as I mentioned, and guess what they
didn't take them Judge Meta might although the how is
pretty difficult here, as Apple and Mozilla aren't defendants in
this case. Force browser developers to offer use as a
ballot screen where people could choose what search engine they'd
like to use. This would probably boost the market share
(16:57):
of smaller search providers by a small degree, although I
imagine most would just opt, through habit or preference, to
pick Google at the very least until a viable alternative
gains momentum. But this is still a start. It's still good. Well,
then again, it's entirely possible that people might try something
new and either because they like what they've selected or
(17:17):
through sheer inertia, they don't go back to Google. As
Google's data shows, this is a real threat, especially on mobile,
which accounts for a massive portion of its search traffic
and thus its ad revenue. Google may be forced to
share click and query data with rivals, although again this
poses its own thorny issues, especially when it comes to privacy.
At the very least, it should at least tell advertisers
(17:38):
what keywords they're buying and give them meaningful opportunities to
opt out of irrelevant queries. While this sounds like a
minor slap on the wrist, it has the potential to
cost Google billions. Google's made so much money from forcing
advertisers to buy slots on searches they don't want or
care about, and by forcing people into auctions against their
will or knowledge. When buyers are empowered, it follows that
(17:58):
the price of ads will decrease commensurate with the lower
levels of demand, And I don't know consumer choice is
good and Google does not like consumer choice, so I
assume it's less profitable to let people choose things. But finally,
Judge Meta may order the actual breakup of Google, compelling
the company to divest Chrome, Android, or more than likely
its advertising division. This remedy is arguably the most potent
(18:22):
and one that Google is most likely to oppose, and
it's also the most funny. But let's get into why
it's thorny. Chrome and Android are based on open source products,
the chromeum Project and the Android open Source Project, respectively,
and short of prohibiting Google from contributing code or providing funding,
it would have a leading role in these developments and
thus real influence. Moreover, Google's presence in Android isn't just
(18:45):
in the operating system itself, but everything else called Google
Mobile Services or GMS. GMS is the package of software
that turns an Android phone into a Google phone. It
includes the apps that company installed when you buy a
Samsung or Gaomi phone, like Gmail, Google Chrome, Google Assistant,
and so on, and also Google Gemini, as well as
the APIs that allow third party applications to integrate with them.
(19:07):
Any ruling that doesn't force Google to divest these components
is for the most part, toothless, and any ruling that
says effectively that Google can no longer build apps, or
rather build apps for the mobile os it's most closely
associated with, it's kind of hard to imagine. Moreover, Google
could also just ditch Android. It's already working on its
own OS called Future. It's already using Future in production devices,
(19:30):
though it's unclear how invested they are in the project,
and as I've previously mentioned in the last episode, I
don't know how much staying power anything new and Google
actually has. Combine this with native support for existing Android apps,
which it likely already has and if not, could be
implemented as others like Microsoft and Huawei have pretended to,
it would effectively skirt any restrictions imposed on Google's involvement
(19:52):
in Android proper. The biggest scariest thing for Google would
be any separation of church and state between Google Search
and its ap avertising platform. Doing so would be potentially
ruinous for this company, which is why Google will do
literally anything to stop it. But it's the remedy that
would actually change things. Google's lack of competition in search
(20:13):
is a symptom of its ability to set pricing in
terms of advertising on search, and it's a problem that
can be solved by removing its ability to do so.
And let's face it, Google Search doesn't make that much
money on its own. The thing that brings home the
bacon is the ads on search and the ads you
get with each query. If the ad business becomes its
own separate entity, Google will have to entirely rethink how
(20:33):
it monetizes search. And for san Da Pischai, that's a
terrifying thought. I mean, what's he do? How do you
rig the tables if you don't own the casino? And
by the way, I'm in beautiful Las Vegas, Nevada. We
they never rigged the tables here. That's sacrilegious. But it's
not like there's another business for him to fall back upon.
(20:54):
As a discussed at the end of the last episode,
Google's largely lost the ability to innovate and execute on
new ideas, and a new ideas that do eventually hit
the market are usually and often just in a few months. Murdered,
the bolt gun comes out chunk. They throw them in
the open grave with Google Reader. But seriously, what does
Google have other than products that directly lead to its
(21:15):
own advertising technologies. What is there besides Cloud? And even
Cloud is a marginal player at best when compared to
Microsoft's Azure and Amazon's Aws. There's nothing. Before you get
too excited, it is worth noting that Google will no
doubt fight this ruling to the very end, using every
single avenue of appeal, every dirty trick, until they're successful
(21:37):
or they've run out of options. These little fuckers are
going to go after everything, and they're going to look
specifically an appeal, which, by the way, little Apple loup
court session for you here, and if there's a loyalist thing,
I'm sorry. Basically, Apple loop court appeals are not a
retrial of the facts. It is a procedural thing. They'll
be looking to see whether the judge meta messed up.
And I'll tell you a little bit about how that's
(21:58):
happened in the past and how bad that is and
why I'm a little worried it might work. Sure, there's
now a bipartisan dislike a big tech and I don't
think any of the recently appointed Supreme Court judges other
than the ones that might be on the take.
Speaker 3 (22:12):
I don't know.
Speaker 2 (22:13):
I don't think they care about Google. Trump doesn't like Google,
Harris doesn't like Google. I don't think anyone that's coming
up is going to be like, we must protect the
most evil tech company of them all other than Beta.
They hate them, and Google Search is bad for most people.
Most people realize this is a problem, and this ruling,
by the way, despite it being extremely long, is really
(22:34):
worth reading. It was very forensic in its case against Google.
The facts on the ground and those obtained through discovery,
they're pretty hard to argue with. On the flip side,
Google also has near unlimited funds to throw out this
legal bow, which, as I point out in a bit
is absolutely existential for Google and their law being to
try and change their fate, hope they lose, and depressingly,
(22:55):
the US hasn't proven particularly effective at curbing this horrible
monopoly bullshit in the past, and I'm going to tell
you why. But before I do that, do you have money?
Do you have a wallet? Are there credit cards in
the wallet? Perhaps this upcoming product might be a thing
that you could stick your credit card in, or maybe
it's a podcast that you could download for free. I
(23:17):
don't know. I'm not an advertiser. I'm just the guy
speaking before the ads. Now, the ads that follow, they're
directly chosen from my brain. They have a neuralink in Serbia.
I've got the third neuralink and it's connected to the
ad server with the company, and that's why all of
these ads are so well targeted.
Speaker 3 (23:35):
Please to enjoy it, and we're back.
Speaker 2 (23:51):
But now it's time for a little history lesson and
a story about how remarkably different the computing market could
look today if legislation had actually succeeded. In the nineteen eighties,
ms DOS rapidly emerged as the dominant operating system for
IBM compatible computers, and by the end of the decade,
it held eighty percent of the market. What its growth
was in no small part due to Microsoft's chummy relationship
(24:12):
with IBM. They also benefited from changing market conditions, some
savy tech and business moves, and a few missteps by
the competitors. But no, it wouldn't be fair to ascribe
Microsoft's success just to its vast resources and technical chops.
He also resorted to strong arming hardware manufacturers and too
only selling computers with Windows or ms DOSS, or making
Windows and ms DOS artificially more preferable to buying an alternative.
(24:37):
One tactic, which started in nineteen eighty three and continued
until the mid nineties, was the force manufacturers to sell
an ms DOS license with each machine, even if the
customer wanted something like bos Ors two. This would be
done by strong arming vendors into buying licenses in bulk,
and not as you'd perhaps expect by demand for the
product because the product was better. Now, how'd they do this?
(24:58):
What they did was they set the individual license price
for an ms DOS license so high that buying in
bulk was basically the only way to do it, and
outright refused to sell to any vendor that purchased alternatives,
or they just refused to sell them Windows. In the
show notes, I've linked to the great paper from the
summer nineteen ninety five issue of the Anti Trust Bulletin
Journal about this. It's sickening. Microsoft's insistence on bulk licensing
(25:22):
agreements meant that asking for a competing operating system wouldn't
actually reduce the cost of the computer. Instead, it would
increase it because the vendor had already bought a specific
number of licenses, and they're incentivized to bundle the cost
into each machine they sell. Buying a competing operating system
like dr doss would in fact mean paying twice for
an operating system. It sucks. These licenses would typically only
(25:45):
valid for two years, which by the way, cost Microsoft.
There was no price difference. They just chose this, and
Microsoft didn't provide any refunds for unused licenses, meaning vendors
had an incentive to aggressively offload them onto customers, like
providing them for free or cheaply with anyone who a
new computer, or by framing it a stars as a
perk purchase. Another tactic designed to bolster sales of Microsoft's
(26:07):
productivity software while crippling its rivals, was to use secret
APIs to control windows that were only accessible to Microsoft
software and not to anyone else. Microsoft's rivals claimed that
these public APIs were generally speaking, not as good and
meant that their software performed worse on Windows, which by
the early nineteen nineties had reached near monopoly status in
the PC market. The YouTube channel retrobytes goes into this
(26:30):
practice in some detail. If you're curious, and I'll link
to that in the notes. Anyway, My point is that
Microsoft was a bit of a bastard back then, argue
they still are, and by the mid nineties they were
already facing some scrutiny from the FTC, which opened investigations
and delivered a couple of little slaps on the wrist,
which Microsoft, of course fought. In nineteen ninety five, Microsoft
released Internet Explorer, its first entrant into the web browser market,
(26:53):
which competed with early style works like Mosaic, as well
as Netscape, which was the dominant player at the time,
an opera which was rapidly gaining THEMNENTUS. Microsoft knew the
Internet was going to be a huge deal, and so
it did everything it could to make Internet Explorer the
dominant browser. This included bundling Ie with Windows and structuring
it so that you couldn't remove Internet Explorer without breaking
parts of the operating system. Rivals also claimed that Internet
(27:16):
Explorer benefited from hidden APIs, which in turn mean that
competing browsers wouldn't work quite as well. In nineteen ninety eight,
the US Department of Justice filed a suit against Microsoft,
accusing it of breaching the Sherman Act, the same law
that Judge Ammitt Meta rulled Google violated by establishing a
near monopoly of the X eighty six computer market, and
Microsoft lost the trial and the release of Bill Gates's
(27:39):
deposition takes, which are hilarious. He responded with I don't
recall to most questions and he asked for the definition
of WI een ask anyway. It was humiliating for Microsoft.
In two thousand, Judge Thomas Penfield Jackson ordered the breakup
of Microsoft into two companies, one responsible for the operating
system and one that would create applications. As you'd expect,
Microsoft appealed, and the following year in Apple Look, Court
(28:00):
reversed the ruling on a technicality as Judge Jackson had
improperly discussed the case with the media before its conclusion.
While the findings of the case stood, Jackson's ruling was overturned,
allowing Microsoft to reach a settlement with the Department of Justice,
and so we got another slap on the rest. Microsoft
would have to share its private APIs with competitors and
agreed to five years of monitoring where a Department of
(28:21):
Justice representative could unannounced sharp up to its officers and
demand access to source code and records. The Department of
Justice also created a technical committee, which consisted of three experts,
none of whom could be recent Microsoft employees or contractors,
to ensure their compliance. Microsoft could, however, keep bundling software
like Internet Explorer with its operating system, which meant that
its near monopoly on the browser market would remain relatively
(28:43):
unchallenged for another eight years until Google Chrome arrived. I
don't take any pleasure in saying that I loathed Google.
As someone who grew up on the Internet, it was
really the product that showed me the possibilities of the
Web and expanded my horizons with every search and click
I used Google. Shit done, I still do. None of
us like that Google's bad. I wish it was good.
(29:04):
It was, and as I've already said, I've said this
a lot of times, it was a really good product
at the time, and it was good like five ten
years ago, I swear. But now it's become corrupted. Now
Google is just at its core rotten. This company used
to say, don't be evil.
Speaker 1 (29:20):
I know.
Speaker 2 (29:20):
One of the early jokes in the show was the
Lionel Huts thing with the red marker, and it's don't
comma be evil exclamation mark, But that's kind of what
it is now. They just distort markets, they block competition.
They don't give a.
Speaker 3 (29:31):
Fuck about you.
Speaker 2 (29:32):
They don't give a fuck about their advertisers. They know
everyone's trapped in the system. They're also just boring now.
I remember when Google launched Gmail, I remember the hubbub.
I remember people selling the invites on eBay. It was
genuinely cool, and it was far superior to everything else
on the market, hot Mail, Yahoo Mail. They were dogshit
(29:54):
in comparison, you know, I'm ray. Google Docs, Google Reader, Rip,
and even Google Fiber were all ambitious, clever, and worthwhile
products that actually people like and use and are happy with.
Now we have Android phones with AI features that nobody wants,
these horrible, dreadful generative AI tools that mislead and misrepresent,
(30:14):
and a family of products that, while once genuinely were useful,
they feel like stale and unhelpful. They don't feel like
they're made for human beings. They feel like little experiments
except where the rats man. That's cliche. Oh well, and
there's a genuine chance here though, there really is. I
know I've kind of given you a little bit of
(30:36):
a cynical view there is a chance here that if
Judge Metta truly punishes Google, that it could genuinely fix
this company by destroying it. And I think that's a
good thing for the future of the tech industry. Google
as a company used to be symbolic of a kind
of stable equilibrium and capitalism, a profitable company that made
societally useful products, ones that change lives mostly for the better,
(31:00):
with a culture that actively encouraged a kind of digital
experimentation that in turn led to better, cooler products like
Gmail and Google News. And let me just be really
abundantly clear, that company is dead. Google as you know
it is dead. What remains is alphabet, a private equity
firm run by a management consolean hiring other management consultants
(31:24):
to dump money into dominating industries and extracting as much
value as possible before the market's collapse. Google is lazy, languid, ugly,
bereft of innovation, and bereft of the kind of culture
that made it so powerful in the first place. This
isn't a company full of genius engineers allowed to do
great work. It's a company run by assholes. It's a
(31:44):
company run by management consultants, sundarp is shy. He is
cancerous to innovation. He makes two hundred million dollars making
products worse yet more profitable. Prabagar Ragavan is a poison
in the veins of Silicon Valley, and Liz read is
a class trait to so the engineers that actually care
about creating great products. At sixteen hundred Amphitheata Parkway. The
(32:06):
company Google deserves to be obliterated because in its current form,
it is defaulted on its duty to the tech industry,
to its customers, and even to its own mission. The
only way to fix Google is to destroy it and
to force it to start earning customers again. To fix
the tech industry, we must obliterate every single one of
(32:26):
these monopolies metas hold on advertising, Apples, hold on the
app store, Googles, hold on Search and its associated advertising arms.
Every single one flies in the face of Yu and
I love technology and runs counter to the notion that
Silicon Valley has a meaningful place in society. All of
these people, they talk about the meritocracy, they talk about
earning one's place. It's hard graft and burning that makes
(32:50):
these great companies. But look at them. Do any of
these companies really look like they're built out of hard work. No,
they giant cons cons wrapped in companies, wrapped in monopolies,
wrapped in bullshit that makes products worse. Big Tech had
a really good thing going. Big Tech made so much
money without really trying that hard, and all they had
(33:14):
to do was not get too greedy. But they did.
They always do. So we as a society should reject
companies over a certain size, and we should indeed reject
everything that Big Tech is saying about their hard work.
The GENERATIVEAI boom is disgusting, and it's disgusting because it
shows such an incredible contempt for society itself, for the
(33:34):
creators that it's depriving of a future because bosses are
lazy and don't trust their customers or care about the
customers enough to provide them with real things made by
real humans. Generative AI is just proof that these companies
can't innovate anymore. It's proof that they don't care about
the customer enough to create something useful, and honestly, it
shows that they don't know how to run real companies anymore.
(33:56):
So I challenge you, the listener, to continue to critique
these companies. To move away from their software where you can,
and they know how impossible that is because of these monopolies.
But I also encourage you to talk to your friends,
your family, especially those not super online, and tell them
about monopolies. Tell them about this podcast, sure, but talk
to them about monopolies. Make monopolies general parlance in good conversation.
(34:21):
Look for the monopolies in your life. Look at how
people have successful businesses, not from providing a great product,
but from fucking everyone around them, from cheating. Because that's
what a monopoly is. It's a cheat, a cheat by
a lazy person, a cheat by an incurious person, a
cheat from a scumbag. And you're not like them. I
(34:43):
know that, and I want you to talk about monopolies
in your general life. I know it sounds silly, I
know it sounds ridiculous like talking to regular people about this,
but these monopolies ruin your life. These monopolies are where
so many pain points in your lives come from, both
in tech and in regular lives. Thank you so much
for listening to this, thank you so much for giving
(35:05):
me your time. And as I've kind of hinted before,
we've been renewed for a second season. You've got a
few more episodes of season one before season two starts,
and nothing's really gonna change. But again, I'm so grateful
to have you as listeners. I really am. It's a
pleasure to do this, it's a pleasure to serve you,
and I will be trying to make it better. I
don't really have a way of monopolizing anything, and also
I don't think I have that in me. I'm just
(35:26):
too pissed naturally, have a great week. Thank you for
listening to Better Offline. The editor and composer of the
Better Offline theme song is Matasowski. You can check out
more of his music and audio projects at Matasowski dot com,
(35:48):
M A T t O. S O w Ski dot com.
You can email me at easy at Better offline dot
com or visit Better offline dot com to find more
podcast links and of course, my newsletter. I also really
recommend you go to chat dot Where's youread dot at
to visit the discord, and go to our slash Better
Offline to check out I'll Reddit. Thank you so much
(36:08):
for listening. Better Offline is a production of Cool Zone Media.
For more from Cool Zone Media, visit our website cool
zonemedia dot com, or check us out on the iHeartRadio app,
Apple Podcasts, or wherever you get your podcasts.
CAUs Media.
Speaker 2 (00:05):
Hello and welcome back to Better Offline. I'm your host
ed Zetron.
Speaker 1 (00:09):
Of course, in.
Speaker 2 (00:21):
The last episode, I went over why Google's monopoly is
such a problem and why monopolies are a form of
societal cancer. And in this episode, I'll go over want
my App and next to Google after their anti trust trial.
And by the time you hear this, it will have
been a few weeks since Judge a Amit Meta ruled
that Google was an illegal monopoly in search and online advertising.
The next phase of this saga, though not including any appeals,
(00:44):
will decide what penalties will come. Although it will be
several months and most likely several years before we learn
exactly what happens to Google, it's clear that the company
sits on a dangerous precipice. In addition to a monetary
penalty which is fairly likely and which could certainly be
in the billions of dollars, Judge Meta will likely force
Google to want to take some action that would effectively
(01:05):
end its monopoly status or at the very least support
more competition, and we'll get to those in the second
But it's worth noting that we need to talk about
how we got here. For this I'm going to be
heavily relying on Judge Meta's three hundred page ruling. Judge
Meta didn't concern himself with how Google got big because
nanto trust law, there's nothing really prohibiting you from achieving
(01:26):
dominance by being good and better than the competition. And
to be fair, for the first couple of decades, Google
was genuinely superior to any alternative. This was evidenced by
its early reviews with Danny Sullivan, who now works for
Google as a guy who occasionally pretends to care about
what reporters think, but at the time he wrote for
Search Engine Watch and he said, so how about results.
I think many people will be pleased, especially for the
(01:48):
ever popular single and two word queries. A search for
Bill Clinton brought the White House site up at number one.
A search for Disney top Rankdisney dot Com and sections
with it like Disney World, the Disney Channel, and Walt
Disney Picture. Yet interesting alternative sites like Werner's unofficial Disney
Park links also made it to that list. Now let's
just taken aside here. I'm just gonna go to Google
(02:09):
dot Com as we speak. I'm gonna take Disney in
I'm gonna read you what's on there. So the first
things at the top are all sponsored. It's sponsored, and
then tickets and tours is very big font and then
there's five different options to buy something on trip dot com,
some sort of vacation package, and then another thing from
(02:31):
a company called Undercover Tourist. And then the results are
Disney dot Com and disneyplasen well Disneyworld. But that those
are like the They are the smallest thing on this
page compared to the Disney store link in Vegas, and
the four or five different sponsored pieces of content. And
if you scroll down, it's Disney Products YouTube, Disney, Disney
(02:52):
on Eggs, Disney Parks. Oh, this is all pretty good,
but no original content. There's like one hundred thousand different
Disney blogs that just aren't on there. Google don't give
a shit, but they used to. Google also outclassed the
competition on a technical level, as noted by Brian Durell,
former sceening of Director of Production Operations at Alta Vista,
in a hacker Use post. He blamed Altavista's demise on
(03:12):
its failure to update its result indexes, which in turn
meant that many of their front page results led to
outdated or dead links, and I quote this was particularly
bad because one of our earliest strong points was fresh indexes.
Our ability to refresh the supplementary index on the flight
was awesome. When you lose one of your primary strengths,
it's noticeable, he said, adding that the decline in Altavista's
(03:35):
index quality was due to a loss of focus within
the company. Oh would hate for that to happen to Google.
Google was at the time, both objectively and subjectively better
than anything else, and so it grew, and like I
said last episode, it became a verb, kind of like
how we say photoshop instead of airbrush, or xerox instead
of photocopy, and better offline listener instead of average criminal.
(03:57):
Not only did it fend off its earliest competitors, but
it also brushed past anyone that would try to steal
its market share, like damp musk Acolyte Jason Kalakanis's Malhallow,
which was a human created search engine, a bit like
the early version of Yahoo and Kull, which emphasized its
larger search indexes and privacy centric ethos as the thingishing factors.
(04:18):
Just so we are clear, being popular or superior is
not an antitrust valulation. No, no, no, no, that's not
the problem. What Google did afterwards was the problem, and
in the eyes of Judge Meta and the US government,
was also illegal as a though, a lot of the
things am about to cite are from this ruling, which
makes linking to them kind of hard. Please don't be
mad at me. But much of this ruling discusses something
(04:41):
called distribution, which refers to how Google makes its search
product accessible to users. The Google website is the most
obvious example of that, but it also includes browser and
device integrations. You ever wonder why the default browser option
on Safari and Firefox is Google? I kind of said
it last episode. It's because Google pays these but he's
a lot of money. In the United States, half of
(05:03):
all searches happen through an access point were Google is
paid to be the default. A further twenty percent come
through Google Chrome, which is made by Google. And does
it follows that Google is the default search engine? Little
monopoly and your monopoly hit my ride. Only thirty percent
of US search queries take place in environments where Google
is not the default browser, Which is not to say
(05:25):
that all those searches are going to Duck duck go
or bing, but rather that consumers have made an active
decision to use whatever browser they've selected. And while you
could argue that the consumers could choose to change the
default on Safari or Firefox to something other than Google,
the reality is, as shown by Google's own internal research
and communications, that most consumers either don't know how or
(05:46):
just don't care to. Another internal study mentioned in the judgment,
this time from twenty twenty, showed that half of all
US iPhone users didn't even know what search engine they
were using. The ruling also points out that in some cases,
there are inherent points of friction dissuade users from changing
their default search engine. Switching on Android was arguably more
(06:07):
difficult than nonios, the ruling said, also noting that the
smaller screen of a smartphone and general fiddliness of things
was a further deterrm. Google's own estimates show that if
it lost search placement on iOS to another provider, it
would lose between sixty and eighty percent of its traffic
just because of how tricky it is to change these
default settings. And so you're starting to get an understanding
(06:30):
of the importance of these default placement deals for Google
and how critical they are to its bottom line. In
twenty twenty one, Mozilla made eighty percent of its operating budget,
or four hundred million dollars, by selling default placement to Google.
Two these monopolies have real consequences. Apple meanwhile, owns a
percentage of advertising revenue from queries made from Safari and Chrome,
(06:50):
even though Apple doesn't actually bundle Chrome with its devices.
In twenty twenty two, this amounted to about twenty billion dollars,
which was double the figure of twenty twenty and amounted
to one six of Apple's operating profit from that year.
Google also assigned deals with several US carriers like T Mobile, Verizon,
in AT, and T, as well as other Android manufacturers,
including Samsung and Motorola. The terms of these deals differ
(07:13):
between companies, but they usually account for a percentage of revenue,
with the actual percentage varying from contract to contract. While
these deals are undoubtedly good for the balance sheets of
these companies, they do impose restrictions on what these companies
can do. Take Samsung, for example, which has around thirty
one percent of US smartphone market share, second only to Apple.
In twenty nineteen, Samsung wanted to integrate technology from a
(07:36):
startup called Branch, which would allow users to search for
content within installed applications, as well as to a limited extent,
content from the Internet, although it was not to be
clear a proper search engine in any real sense. Despite
how there was a little bit of initial excitement around this,
Samsung also saw h kind of become clear that the
(07:56):
way Branch worked conflicted with their agreement with Google, and
so the software had to be reworked in a way
that massively limited its functionality. While the partnership went ahead,
it was nowhere near as lucrative as Branch first hoped.
The software was crippled and thus much less attractive. Similarly,
AT and T also wanted to pre install Branch on
its devices, but decided against it when it couldn't get
(08:18):
clarity from Google whether it violated the terms of its
revenue sharing deal. Google, it seemed simply stonewalled AT and
T into submission. And this is again going back to
the Matt Stolar interview I did. When you have rules
like this, when you have monopolies, they do operate like
miniature governments. And indeed, this is an example Google didn't
even need to intimidate these people. In most cases, they
(08:40):
just made enough money and they were scared enough of
violating the deal that they literally made their devices worse.
They didn't install cool software for fear that Google might
sue them and cut off a lucrative revenue share. It's
nasty even Apple, a company that is at varying times
close to or the most valuable company in the world,
(09:00):
itself constrained by this devil's deal with Google. At one point,
Google insisted on altering the terms of its agreement to
prevent Apple from suggesting relevant links to users through the
Safari search bar, as such a feature would be and
I quote, substantially similar to Google search. Apple, for what
it's worth, has said that it did not feel constrained
by these restrictions, which makes it fine with me. Then
(09:20):
I'm kidding the kidding. I'd argue that they would say
that because they were making twenty billion dollars each year
from Google. And if I'm honest, if somebody gave me
twenty billion dollars, I'd let them do whatever they wanted.
Hit me with a baseball back, roun me over with
your car. I don't care call me a pig. I'll
oink for you. Give me twenty billion dollars. I need
twenty billion dollars. Please give it to me now. But
(09:40):
if you can't give me your money, then perhaps you'll
hand it to one of the extremely well targeted advertisements
that follow this wonderful message once that will make you
say wow. This is definitely one that Ed wanted to
follow what he just said, and we're back. And we're
(10:03):
back with Google. As I've kind of hinted at, I
don't think without their ad monopoly and with their Google
Search monopoly, I don't think Google is a profitable business.
And I definitely don't think Google Search is a profitable business.
I think it's actually kind of a cost center. Search
is in effect the vehicle in how Google gets people
to look at billions of dollars of advertisements every single day,
(10:25):
and Google doesn't allow any other competing business to show
adds on its turf. It has exclusivity, and as the
ruling found, that exclusivity has allowed Google to raise prices
at will, looking to see how far it can push
advertisers before they walk away, you know, to the other
place they can advertise to this many people in twenty seventeen,
the company ran an experiment where it strongly increased certain
(10:47):
prices for a cohor fifteen percent of advertisers for six weeks.
It found that half of the initial revenue getting stuck,
and found that there was no significant evidence that advertisers
were changing what products they don Google would later do
further studies where it significantly hyped prices on advertisers, and
each time it learned that it could charge more without
(11:07):
losing them. While Google acknowledged there was a limit to
how far it could push things, they believed that there
was still more value to extract from its customers, and
so it's set upon a strategy of gradually, though significantly,
I should add raising prices across short intervals, as in
the siding. Goddamn, is this company so fucking evil? They
should be eradicated from existence. The fact that people like
(11:28):
this function in good societies only prove that there are
things wrong in the world. Every time I read about them,
I feel poison in my veins. But there's more. These
price rises Judge Meta noted were oftentimed when Google was
at risk of not meeting its revenue goals, and when
the company was at risk of showing some sort of
slow down in its ads business. Hey remember the code
(11:49):
yellow from twenty nineteen from the man that destroyed Google Search,
that was all around raising metrics because they were worried
about query growth. Google does not care. They will do
whatever they need to to make revenue. They will make
your products worse, they will make it more expensive for
advertisers to advertise to you. And it's all thanks to
(12:09):
their goddamn monopolies and these changes, these increases through the
pricing of advertising and the way that they took money
from advertisers. They were done with this insane lack of
transparency and this is really stomach turning, this beer. This company.
People should be in jail for this. Google didn't tell
advertisers that the costs were going up, but rather they
were timing these increases so that these increases could be
(12:32):
dismissed as noise or ordinary price fluctuations generated within advertising auctions.
The last point is important, by the way, as Google
also tried to rig these auctions in their own favor.
One way they accomplished this, by the way, is by
removing the ability for advertisers to remove themselves from certain auctions.
When someone buys a text out on Google, what they're
really doing is selecting a keyword or keywords under which
(12:55):
they want their ads to appear. The problem is that
people may use different words for a search with the
same intent. So one person might say kid's clothing where
another might say children's clothing. And this is a problem
for advertisers because you want to make sure that you
capture the audience you want, right, And this is a
problem that Google fixed by adding other relevant keywords to
an advertiser's bid without telling them. Now, this might seem
(13:17):
like a nice thing that Google did, making sure that
your money goes further, right, The problem is, as the
ruling showed, the Google interpreted the word relevant in the
broadest way possible, so kids clothing would, as one shot
shown in the ruling showed, include phrases like newborn children's
clothing or kid's clothing Canada or Tjmax kids wear. And
(13:39):
what's great is if you don't like this, you have
no one else to advertise, with no other choices. And
while Google initially allowed advertisers to opt out of this feature,
which they called semantic matching, or use a limited version
that would only include grammatical variations like pluralization, so children clothing,
children's clothing, and so on and so forth, They of
course remove these options. It means that unless the advertiser
(14:01):
explicitly states what keywords they don't want their advert to
appear under, they're going to be bid on search results
that aren't relevant to their needs. And guess who controls
what are relevant? Google? Google. Google's the one that tells
you how much money to spend on Google. You don't
like it, well, you can work with Google to advertise
on Google, and otherwise you go fuck yourself. And this
(14:22):
in turn increases the amount of advertisers bidding for space
in an auction, which in turn results in higher prices
for advertisers in a completely unpredictable way that's predictably evil.
Not only does Google control the supply, they literally control
the demand. And while Google at one point provided advertisers
with detailed information about their matched keywords and the algorithmically
(14:45):
selected ones at that it no longer does so. As
a result, advertisers are effectively forced to guess what keywords
their ad might appear under, and they have no other
vendor to go to who might be a little more transparent.
This in turn, by the way, pushes them to larger
advertising agencies who have a better relation and ship with Google,
who might have keyword banks that they know that they
can cut out so that the advertising dollars are more
efficiently spent. This in turn makes advertising agencies, especially the
(15:08):
bigger ones, more powerful and hurt small businesses. It's so
cool watching this happen. It doesn't make me angry at all.
But in his ruling, Judge Meta found that Google's practices
had degraded the quality of its text advertisements and charge
super competitive prices for text advertisements. At the same time,
by maintaining Google's stranglehold on the search market, they effectively
(15:30):
limited how much rivals like Being can make from advertising.
Even if Microsoft built a better ad tech platform than Google,
its share of spending would remain in line with its
market share and I quote here By locking in a
huge comparatative query volume advantage through its exclusive agreements, Google
ensures that advertisers will continue to spend ninety percent of
their text ad dollars with Google, regardless of increases in
(15:53):
price or decreases in quality. That is an anti competitive
effect in the marketplace, and as Judge Metter is said
that is bluddy well right, So what happens next. There's
four un likely outcomes here, each with their own advantages
or disadvantages and their own level of probability have come
into pass and had tip by the way to Adam
Kolovicik for highlighting these. Google may be ordered to cease
(16:16):
engaging in default search deals kind of the most obvious one,
leaving the likes of Apple, Samsung, and Mozilla free to
sign agreements with other search providers, although these agreements would
almost certainly be less favorable than their current ones, and
indeed would be I don't know competitive, It's going to
be a mess. As the ruling showed, both Apple and
Mozilla have at times flirted with or been courted by
(16:37):
the likes of Microsoft and Yahoo, although the terms were
never as favorable as I mentioned, and guess what they
didn't take them Judge Meta might although the how is
pretty difficult here, as Apple and Mozilla aren't defendants in
this case. Force browser developers to offer use as a
ballot screen where people could choose what search engine they'd
like to use. This would probably boost the market share
(16:57):
of smaller search providers by a small degree, although I
imagine most would just opt, through habit or preference, to
pick Google at the very least until a viable alternative
gains momentum. But this is still a start. It's still good. Well,
then again, it's entirely possible that people might try something
new and either because they like what they've selected or
(17:17):
through sheer inertia, they don't go back to Google. As
Google's data shows, this is a real threat, especially on mobile,
which accounts for a massive portion of its search traffic
and thus its ad revenue. Google may be forced to
share click and query data with rivals, although again this
poses its own thorny issues, especially when it comes to privacy.
At the very least, it should at least tell advertisers
(17:38):
what keywords they're buying and give them meaningful opportunities to
opt out of irrelevant queries. While this sounds like a
minor slap on the wrist, it has the potential to
cost Google billions. Google's made so much money from forcing
advertisers to buy slots on searches they don't want or
care about, and by forcing people into auctions against their
will or knowledge. When buyers are empowered, it follows that
(17:58):
the price of ads will decrease commensurate with the lower
levels of demand, And I don't know consumer choice is
good and Google does not like consumer choice, so I
assume it's less profitable to let people choose things. But finally,
Judge Meta may order the actual breakup of Google, compelling
the company to divest Chrome, Android, or more than likely
its advertising division. This remedy is arguably the most potent
(18:22):
and one that Google is most likely to oppose, and
it's also the most funny. But let's get into why
it's thorny. Chrome and Android are based on open source products,
the chromeum Project and the Android open Source Project, respectively,
and short of prohibiting Google from contributing code or providing funding,
it would have a leading role in these developments and
thus real influence. Moreover, Google's presence in Android isn't just
(18:45):
in the operating system itself, but everything else called Google
Mobile Services or GMS. GMS is the package of software
that turns an Android phone into a Google phone. It
includes the apps that company installed when you buy a
Samsung or Gaomi phone, like Gmail, Google Chrome, Google Assistant,
and so on, and also Google Gemini, as well as
the APIs that allow third party applications to integrate with them.
(19:07):
Any ruling that doesn't force Google to divest these components
is for the most part, toothless, and any ruling that
says effectively that Google can no longer build apps, or
rather build apps for the mobile os it's most closely
associated with, it's kind of hard to imagine. Moreover, Google
could also just ditch Android. It's already working on its
own OS called Future. It's already using Future in production devices,
(19:30):
though it's unclear how invested they are in the project,
and as I've previously mentioned in the last episode, I
don't know how much staying power anything new and Google
actually has. Combine this with native support for existing Android apps,
which it likely already has and if not, could be
implemented as others like Microsoft and Huawei have pretended to,
it would effectively skirt any restrictions imposed on Google's involvement
(19:52):
in Android proper. The biggest scariest thing for Google would
be any separation of church and state between Google Search
and its ap avertising platform. Doing so would be potentially
ruinous for this company, which is why Google will do
literally anything to stop it. But it's the remedy that
would actually change things. Google's lack of competition in search
(20:13):
is a symptom of its ability to set pricing in
terms of advertising on search, and it's a problem that
can be solved by removing its ability to do so.
And let's face it, Google Search doesn't make that much
money on its own. The thing that brings home the
bacon is the ads on search and the ads you
get with each query. If the ad business becomes its
own separate entity, Google will have to entirely rethink how
(20:33):
it monetizes search. And for san Da Pischai, that's a
terrifying thought. I mean, what's he do? How do you
rig the tables if you don't own the casino? And
by the way, I'm in beautiful Las Vegas, Nevada. We
they never rigged the tables here. That's sacrilegious. But it's
not like there's another business for him to fall back upon.
(20:54):
As a discussed at the end of the last episode,
Google's largely lost the ability to innovate and execute on
new ideas, and a new ideas that do eventually hit
the market are usually and often just in a few months. Murdered,
the bolt gun comes out chunk. They throw them in
the open grave with Google Reader. But seriously, what does
Google have other than products that directly lead to its
(21:15):
own advertising technologies. What is there besides Cloud? And even
Cloud is a marginal player at best when compared to
Microsoft's Azure and Amazon's Aws. There's nothing. Before you get
too excited, it is worth noting that Google will no
doubt fight this ruling to the very end, using every
single avenue of appeal, every dirty trick, until they're successful
(21:37):
or they've run out of options. These little fuckers are
going to go after everything, and they're going to look
specifically an appeal, which, by the way, little Apple loup
court session for you here, and if there's a loyalist thing,
I'm sorry. Basically, Apple loop court appeals are not a
retrial of the facts. It is a procedural thing. They'll
be looking to see whether the judge meta messed up.
And I'll tell you a little bit about how that's
(21:58):
happened in the past and how bad that is and
why I'm a little worried it might work. Sure, there's
now a bipartisan dislike a big tech and I don't
think any of the recently appointed Supreme Court judges other
than the ones that might be on the take.
Speaker 3 (22:12):
I don't know.
Speaker 2 (22:13):
I don't think they care about Google. Trump doesn't like Google,
Harris doesn't like Google. I don't think anyone that's coming
up is going to be like, we must protect the
most evil tech company of them all other than Beta.
They hate them, and Google Search is bad for most people.
Most people realize this is a problem, and this ruling,
by the way, despite it being extremely long, is really
(22:34):
worth reading. It was very forensic in its case against Google.
The facts on the ground and those obtained through discovery,
they're pretty hard to argue with. On the flip side,
Google also has near unlimited funds to throw out this
legal bow, which, as I point out in a bit
is absolutely existential for Google and their law being to
try and change their fate, hope they lose, and depressingly,
(22:55):
the US hasn't proven particularly effective at curbing this horrible
monopoly bullshit in the past, and I'm going to tell
you why. But before I do that, do you have money?
Do you have a wallet? Are there credit cards in
the wallet? Perhaps this upcoming product might be a thing
that you could stick your credit card in, or maybe
it's a podcast that you could download for free. I
(23:17):
don't know. I'm not an advertiser. I'm just the guy
speaking before the ads. Now, the ads that follow, they're
directly chosen from my brain. They have a neuralink in Serbia.
I've got the third neuralink and it's connected to the
ad server with the company, and that's why all of
these ads are so well targeted.
Speaker 3 (23:35):
Please to enjoy it, and we're back.
Speaker 2 (23:51):
But now it's time for a little history lesson and
a story about how remarkably different the computing market could
look today if legislation had actually succeeded. In the nineteen eighties,
ms DOS rapidly emerged as the dominant operating system for
IBM compatible computers, and by the end of the decade,
it held eighty percent of the market. What its growth
was in no small part due to Microsoft's chummy relationship
(24:12):
with IBM. They also benefited from changing market conditions, some
savy tech and business moves, and a few missteps by
the competitors. But no, it wouldn't be fair to ascribe
Microsoft's success just to its vast resources and technical chops.
He also resorted to strong arming hardware manufacturers and too
only selling computers with Windows or ms DOSS, or making
Windows and ms DOS artificially more preferable to buying an alternative.
(24:37):
One tactic, which started in nineteen eighty three and continued
until the mid nineties, was the force manufacturers to sell
an ms DOS license with each machine, even if the
customer wanted something like bos Ors two. This would be
done by strong arming vendors into buying licenses in bulk,
and not as you'd perhaps expect by demand for the
product because the product was better. Now, how'd they do this?
(24:58):
What they did was they set the individual license price
for an ms DOS license so high that buying in
bulk was basically the only way to do it, and
outright refused to sell to any vendor that purchased alternatives,
or they just refused to sell them Windows. In the
show notes, I've linked to the great paper from the
summer nineteen ninety five issue of the Anti Trust Bulletin
Journal about this. It's sickening. Microsoft's insistence on bulk licensing
(25:22):
agreements meant that asking for a competing operating system wouldn't
actually reduce the cost of the computer. Instead, it would
increase it because the vendor had already bought a specific
number of licenses, and they're incentivized to bundle the cost
into each machine they sell. Buying a competing operating system
like dr doss would in fact mean paying twice for
an operating system. It sucks. These licenses would typically only
(25:45):
valid for two years, which by the way, cost Microsoft.
There was no price difference. They just chose this, and
Microsoft didn't provide any refunds for unused licenses, meaning vendors
had an incentive to aggressively offload them onto customers, like
providing them for free or cheaply with anyone who a
new computer, or by framing it a stars as a
perk purchase. Another tactic designed to bolster sales of Microsoft's
(26:07):
productivity software while crippling its rivals, was to use secret
APIs to control windows that were only accessible to Microsoft
software and not to anyone else. Microsoft's rivals claimed that
these public APIs were generally speaking, not as good and
meant that their software performed worse on Windows, which by
the early nineteen nineties had reached near monopoly status in
the PC market. The YouTube channel retrobytes goes into this
(26:30):
practice in some detail. If you're curious, and I'll link
to that in the notes. Anyway, My point is that
Microsoft was a bit of a bastard back then, argue
they still are, and by the mid nineties they were
already facing some scrutiny from the FTC, which opened investigations
and delivered a couple of little slaps on the wrist,
which Microsoft, of course fought. In nineteen ninety five, Microsoft
released Internet Explorer, its first entrant into the web browser market,
(26:53):
which competed with early style works like Mosaic, as well
as Netscape, which was the dominant player at the time,
an opera which was rapidly gaining THEMNENTUS. Microsoft knew the
Internet was going to be a huge deal, and so
it did everything it could to make Internet Explorer the
dominant browser. This included bundling Ie with Windows and structuring
it so that you couldn't remove Internet Explorer without breaking
parts of the operating system. Rivals also claimed that Internet
(27:16):
Explorer benefited from hidden APIs, which in turn mean that
competing browsers wouldn't work quite as well. In nineteen ninety eight,
the US Department of Justice filed a suit against Microsoft,
accusing it of breaching the Sherman Act, the same law
that Judge Ammitt Meta rulled Google violated by establishing a
near monopoly of the X eighty six computer market, and
Microsoft lost the trial and the release of Bill Gates's
(27:39):
deposition takes, which are hilarious. He responded with I don't
recall to most questions and he asked for the definition
of WI een ask anyway. It was humiliating for Microsoft.
In two thousand, Judge Thomas Penfield Jackson ordered the breakup
of Microsoft into two companies, one responsible for the operating
system and one that would create applications. As you'd expect,
Microsoft appealed, and the following year in Apple Look, Court
(28:00):
reversed the ruling on a technicality as Judge Jackson had
improperly discussed the case with the media before its conclusion.
While the findings of the case stood, Jackson's ruling was overturned,
allowing Microsoft to reach a settlement with the Department of Justice,
and so we got another slap on the rest. Microsoft
would have to share its private APIs with competitors and
agreed to five years of monitoring where a Department of
(28:21):
Justice representative could unannounced sharp up to its officers and
demand access to source code and records. The Department of
Justice also created a technical committee, which consisted of three experts,
none of whom could be recent Microsoft employees or contractors,
to ensure their compliance. Microsoft could, however, keep bundling software
like Internet Explorer with its operating system, which meant that
its near monopoly on the browser market would remain relatively
(28:43):
unchallenged for another eight years until Google Chrome arrived. I
don't take any pleasure in saying that I loathed Google.
As someone who grew up on the Internet, it was
really the product that showed me the possibilities of the
Web and expanded my horizons with every search and click
I used Google. Shit done, I still do. None of
us like that Google's bad. I wish it was good.
(29:04):
It was, and as I've already said, I've said this
a lot of times, it was a really good product
at the time, and it was good like five ten
years ago, I swear. But now it's become corrupted. Now
Google is just at its core rotten. This company used
to say, don't be evil.
Speaker 1 (29:20):
I know.
Speaker 2 (29:20):
One of the early jokes in the show was the
Lionel Huts thing with the red marker, and it's don't
comma be evil exclamation mark, But that's kind of what
it is now. They just distort markets, they block competition.
They don't give a.
Speaker 3 (29:31):
Fuck about you.
Speaker 2 (29:32):
They don't give a fuck about their advertisers. They know
everyone's trapped in the system. They're also just boring now.
I remember when Google launched Gmail, I remember the hubbub.
I remember people selling the invites on eBay. It was
genuinely cool, and it was far superior to everything else
on the market, hot Mail, Yahoo Mail. They were dogshit
(29:54):
in comparison, you know, I'm ray. Google Docs, Google Reader, Rip,
and even Google Fiber were all ambitious, clever, and worthwhile
products that actually people like and use and are happy with.
Now we have Android phones with AI features that nobody wants,
these horrible, dreadful generative AI tools that mislead and misrepresent,
(30:14):
and a family of products that, while once genuinely were useful,
they feel like stale and unhelpful. They don't feel like
they're made for human beings. They feel like little experiments
except where the rats man. That's cliche. Oh well, and
there's a genuine chance here though, there really is. I
know I've kind of given you a little bit of
(30:36):
a cynical view there is a chance here that if
Judge Metta truly punishes Google, that it could genuinely fix
this company by destroying it. And I think that's a
good thing for the future of the tech industry. Google
as a company used to be symbolic of a kind
of stable equilibrium and capitalism, a profitable company that made
societally useful products, ones that change lives mostly for the better,
(31:00):
with a culture that actively encouraged a kind of digital
experimentation that in turn led to better, cooler products like
Gmail and Google News. And let me just be really
abundantly clear, that company is dead. Google as you know
it is dead. What remains is alphabet, a private equity
firm run by a management consolean hiring other management consultants
(31:24):
to dump money into dominating industries and extracting as much
value as possible before the market's collapse. Google is lazy, languid, ugly,
bereft of innovation, and bereft of the kind of culture
that made it so powerful in the first place. This
isn't a company full of genius engineers allowed to do
great work. It's a company run by assholes. It's a
(31:44):
company run by management consultants, sundarp is shy. He is
cancerous to innovation. He makes two hundred million dollars making
products worse yet more profitable. Prabagar Ragavan is a poison
in the veins of Silicon Valley, and Liz read is
a class trait to so the engineers that actually care
about creating great products. At sixteen hundred Amphitheata Parkway. The
(32:06):
company Google deserves to be obliterated because in its current form,
it is defaulted on its duty to the tech industry,
to its customers, and even to its own mission. The
only way to fix Google is to destroy it and
to force it to start earning customers again. To fix
the tech industry, we must obliterate every single one of
(32:26):
these monopolies metas hold on advertising, Apples, hold on the
app store, Googles, hold on Search and its associated advertising arms.
Every single one flies in the face of Yu and
I love technology and runs counter to the notion that
Silicon Valley has a meaningful place in society. All of
these people, they talk about the meritocracy, they talk about
earning one's place. It's hard graft and burning that makes
(32:50):
these great companies. But look at them. Do any of
these companies really look like they're built out of hard work. No,
they giant cons cons wrapped in companies, wrapped in monopolies,
wrapped in bullshit that makes products worse. Big Tech had
a really good thing going. Big Tech made so much
money without really trying that hard, and all they had
(33:14):
to do was not get too greedy. But they did.
They always do. So we as a society should reject
companies over a certain size, and we should indeed reject
everything that Big Tech is saying about their hard work.
The GENERATIVEAI boom is disgusting, and it's disgusting because it
shows such an incredible contempt for society itself, for the
(33:34):
creators that it's depriving of a future because bosses are
lazy and don't trust their customers or care about the
customers enough to provide them with real things made by
real humans. Generative AI is just proof that these companies
can't innovate anymore. It's proof that they don't care about
the customer enough to create something useful, and honestly, it
shows that they don't know how to run real companies anymore.
(33:56):
So I challenge you, the listener, to continue to critique
these companies. To move away from their software where you can,
and they know how impossible that is because of these monopolies.
But I also encourage you to talk to your friends,
your family, especially those not super online, and tell them
about monopolies. Tell them about this podcast, sure, but talk
to them about monopolies. Make monopolies general parlance in good conversation.
(34:21):
Look for the monopolies in your life. Look at how
people have successful businesses, not from providing a great product,
but from fucking everyone around them, from cheating. Because that's
what a monopoly is. It's a cheat, a cheat by
a lazy person, a cheat by an incurious person, a
cheat from a scumbag. And you're not like them. I
(34:43):
know that, and I want you to talk about monopolies
in your general life. I know it sounds silly, I
know it sounds ridiculous like talking to regular people about this,
but these monopolies ruin your life. These monopolies are where
so many pain points in your lives come from, both
in tech and in regular lives. Thank you so much
for listening to this, thank you so much for giving
(35:05):
me your time. And as I've kind of hinted before,
we've been renewed for a second season. You've got a
few more episodes of season one before season two starts,
and nothing's really gonna change. But again, I'm so grateful
to have you as listeners. I really am. It's a
pleasure to do this, it's a pleasure to serve you,
and I will be trying to make it better. I
don't really have a way of monopolizing anything, and also
I don't think I have that in me. I'm just
(35:26):
too pissed naturally, have a great week. Thank you for
listening to Better Offline. The editor and composer of the
Better Offline theme song is Matasowski. You can check out
more of his music and audio projects at Matasowski dot com,
(35:48):
M A T t O. S O w Ski dot com.
You can email me at easy at Better offline dot
com or visit Better offline dot com to find more
podcast links and of course, my newsletter. I also really
recommend you go to chat dot Where's youread dot at
to visit the discord, and go to our slash Better
Offline to check out I'll Reddit. Thank you so much
(36:08):
for listening. Better Offline is a production of Cool Zone Media.
For more from Cool Zone Media, visit our website cool
zonemedia dot com, or check us out on the iHeartRadio app,
Apple Podcasts, or wherever you get your podcasts.
Host
Ed Zitron
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