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This week: It’s Google CEO Sundar Pichai’s turn to roll the dice in a high-stakes game of monopoly
Four months before Google was officially founded as a company in September 1998, the US Department of Justice sued Microsoft for violating antitrust laws, setting off a once-in-a-generation legal battle that would shape the future of the tech industry.
Now, one generation later, Google has grown from a fledgling startup to a $1 trillion juggernaut, and it’s the defendant in what’s set to be the most important US antitrust case since the Microsoft saga.
It’s worth looking back at the Microsoft antitrust case in this moment, both because the DOJ explicitly cites it as a model in the lawsuit it slapped Google with on Tuesday, and because of the lessons it offers for Big Tech today as it faces off with the government.
If you ask Bill Gates, the most important lesson that today’s tech giants like Google can draw from his experience is to engage directly with lawmakers.
- The main “mistake” Gates believes he made “was not realizing how important it would be to develop relationships in Washington,” the Microsoft founder recently said. “Everybody saw what I did and knows better now,” he said.
- Considering that Google has spent about $150 million on lobbying in the past decade, according to The Washington Post, the company seems well aware of Gates’ lesson.
Government regulators learned the power of focus. As Business Insider’s Ashley Stewart writes:
The Department of Justice originally took a much bigger swing in its antitrust pursuit of Microsoft with a broad list of allegations, but what ultimately stuck in the settlement Microsoft and the DOJ reached in 2001 was that Microsoft couldn’t force PC makers to work exclusively with the company.
Lees ook op Business Insider
The Google complaint zeroes in on this kind of behavior, alleging it uses its market power to negotiate contracts that limit the ability of other search providers to get their apps pre-installed on Android-powered smartphones. That could make the government’s case against Google more successful because it won’t become mired in claims that may be harder to prove.
According to Gary Reback, a lawyer who helped convince the government to bring its case against Microsoft in the ’90s, companies like Google now understand the importance of cleaning up their emails.
- “The first thing that Google has obviously learned is: Don’t let your CEO say stupid things,” Reback told Business Insider, referring to colorful Microsoft emails dredged up in the case that referred to cutting off Netscape’s “air supply.”
- Google has an internal list of “taboo” words that employees are banned from using in emails, The Markup recently reported, lessening the odds that damning comments by its own execs would be used against it.
It’s also worth remembering that tremors from the lawsuit might not mean a tsunami of changes at Google. The judge in Microsoft’s antitrust case ruled that the company should be split up, but that ruling was overturned by the appellate court, and in 2001 the DOJ and Microsoft settled the case with far less draconian terms for the company.
So did Microsoft win, by staying intact? Or did government regulators prevail, by hobbling the company enough that new competitors like Google and Facebook could get the oxygen they needed to thrive and become giants in their own rights? As Google CEO Sundar Pichai, and founders Larry Page and Sergey Brin contemplate where they want the company to be two decades from now, that’s an important question.
Q3 report cards are coming in
The Q3 tech earnings season kicked off this week with a trio of companies reporting quarterly results. Here’s what you need to know:
- The streaming company said on Tuesday that it added 2.2 million paid subscribers during the third quarter, compared with its forecast of 2.5 million and the 3.3 million that Wall Street analysts were expecting.
- Snapchat generated $678.7 million in revenue in the third quarter, up by 52% year-on-year, exceeding Wall Street analysts’ consensus by more than $100 million.
- But the big potential for IBM is its now year-old merger with Red Hat, and executives at the company gave Business Insider an update on the open source software business that’s critical to IBM’s hybrid cloud strategy.
Not necessarily in tech:
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