As the FT has noted in an email this morning:
[Google has] launched a radical corporate restructuring aimed at accelerating its transformation from a search and advertising company into a conglomerate with stakes in some of the most promising long-term tech markets. In an interview with the FT last year, co-founder Larry Page said he saw Google becoming more like Warren Buffett's Berkshire Hathaway, making bets in a series of unrelated markets.
How benign it all seems when printed on the pages of the Pink'Un, but what's the reality? That, of course, is somewhat different.
The reality is that Google is a natural monopoly in the age of IT. That monopoly exists solely because of the state granted privilege endowed by patent law, in particular. These now permit it to collect the most phenomenal income in excess of any costs, with the income being determined by it pretty much at will since it is impossible to argue that market forces really operate within its advertising space. This monopoly pricing then creates what an economist would call a rent in the form of excess profits that it now intends to use to spread its tentacles where it will. No doubt its untaxed offshore funds will help it do just that: in fact they may drive the policy.
This is not benign.
Nor is it to be passively accepted.
This is either indication of action being needed to preserve markets, which is the rearguard action the EU is taking, or of need to reform patent law to prevent this abuse arising, which no one seems willing to do, or it makes the very strong case for an excess profits tax to be charged in such cases just at the time the UK is driving a race to the bottom in such rates.
However looked at this is Google's equivalent of building the fences that enclosed the commons in 18th century England so that rents could be extracted from those who previously had the opportunity to use the land by right. And just a enclosure required a reaction, so does the behaviour of IT monopolists do the same.
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Google is positioning itself before the signing of the TTIP free trade agreement, Its their field and you can’t graze your sheep here without paying rent.
indeed Tony almost all is pre prep ttip but there is a fight back. Glen Moody is a great source of info on this.
Indeed Toni, looks very much like austerity is a step to TTIP.
For anyone interested (and you should be) it’s actually Glyn Moody and you should check out his TTIP blogs and other articles at:
http://www.computerworlduk.com/blogs/open-enterprise/ttip-updates–the-glyn-moody-blogs-3569438/
According to the Economist, the TTIP is dead in the water. Can’t be signed before 2016. So, this can be what they are aiming at, at least right now.
The Enclosures? A worrying analogy: such reaction as there was had no effect – sporadic violence in overcrowded slums as the masses displaced from common land migrated to the cities.
Social history has little to say about the landless poor, who became a distinct underclass living in the countryside as migrant labour, moving from job to job and living in whatever temporary shelter they could improvise before the work ended, or the parish moved them on.
That’s an analogy to ponder, digital gastarbeiter that I am.
In the long run we did reclaim the commons
Neoliberalism is the reaction to that
I believe the process of change is quicker now
If we’ve reclaimed the Commons, where is our right to live reasonably well without exploitation through wage-earnings? Where is our basic income?
Give it time
Read Paul Mason
Should that not be “TTIP costly trade agreement if you do not allow US corporations to do/charge what they want”
?
Still, I suppose it is better than the US sending the troops in when they don’t get what they want?
I do hope a future Labour government (with Jeremy Corbyn as Prime Minister!) will think seriously about how we can create a British alternative to Google.
Bring back Clause Four – but of course! – yet we cannot afford to be backwards-looking. We must look at means to democratise not only the physical strategic industries and services, but the information economy also. Renationalise the Royal Mail and British Rail and British Telecom, yes. But arguably, the internet is now more important than these legacy industries. What are we going to do about that?
Can it be right that the internet was invented by a British man, Tim Berners-Lee, yet somehow Britain’s internet came to be monopolised by Google, an American company which pays next to nothing to Her Majesty’s Revenue and Customs? Not to mention Amazon and Facebook and Twitter.
In 1963 Harold Wilson called for a new Britain to be forged in the white heat of a technological revolution. We’re still waiting, because Britain’s captains of industry failed to live up to his ambition. And meanwhile, the Americans have captured the high ground in the cyberspace race. But their position is not unassailable.
The BBC has pioneered a raft of computer and online services in a technologically advanced and socially responsible manner. It was the BBC – and not the corporate giants – that put a computer in every school. It was the BBC that brought digital broadcasting to the UK. It was the BBC that created online video streaming for free, without adverts.
So why not extend the BBC Charter to cover the internet too? Extend the licence fee to every broadband subscriber in the UK (except the elderly and socially excluded – they will get the internet for free) and use the monies to create a truly British search, social, and streaming space on the World Wide Web, free from the malign presence of advertising and malware and pornography and all of the other horrible and tawdry things the commercial internet has brought us.
What an incredible investment in Britain’s technology communities this would be! And how quickly it would silence those misinformed voices claiming that nationalisation is “old hat”.
China has its own native search engine, media streaming, and social networking sites. They pay lip service to neoliberalism, but do not allow the Americans to control their internet. If they can do it, so can we.
Small point of order: the Internet was invented by Darpa. You’re thinking of the WWW which was invented at Cern by Bernera Lee.
I don’t get the Google hysteria. Online markets are as close as it’s probably possible to get to the perfect market. No switching costs. Virtually zero startup costs. A real meritocracy. Google has a monopoly in search for the same reason MS has one in productivity: they make by far the best product.
If privacy is your wish use one of the many many privacy focussed services like DuckDuckGo or StartPage. Or use Google own privacy tools.
Now if you want to look at abuse of monopoly look at Apples refusal to allow users to switch browsers maps provider on iOS, unlike Google where you can swap out everything from messaging to home screen. Plus their stuff is open source and Google very rarely patent trolls.
There are far far better targets in the tech world than Google. It seems to me sometimes it’s the lefts instinctive hate of large businesses than anything specific that gets their ire.
My impression is that Google’s vaunted technologies (search engines, driverless cars, head-up display glasses) were all developed by the US Defense Department, funded by the US taxpayer. For an experience of Google’s own technical proficiency, try using their software (search engine, Gmail, profiles). Worst user interfaces ever.
No.
PageRank (the search algorithm) was invented by the founders. The SDC project was bought from a University that won the DARPA Grand Challenge but wasn’t DARPA funded.
There’s no evidence Glass came from anywhere other than Google X either. It’s hardly revolutionary tech.
Or even that well-known and extremely buggy Android OS…..