Larry Page and Sergey Brin never liked hanging out with reporters. “Larry can be a very sensitive and nice guy, but he has serious trust issues and few social graces,” a former Google PR executive once told me. “Sergei has a social grace, but he doesn’t trust people who he doesn’t think come close to his level of intelligence.”
However, in the fall of 1999. their new chief communications officer invited the Google co-founders to visit the East Coast for a low-key bash. Just a year old, Google was still under most people’s radar, and few knew its fascinating story: Page put the entire world wide web on Stanford University’s servers to reveal the perfect search result, and Brin did some math magic to fulfill the concept. They tried to sell the technology to one of the big internet portals, but they couldn’t get a deal they liked. So they started their own company. It was not yet clear where their revenue would come from. They went on record as hating ads, believing that “ad-funded search engines will inherently be biased toward advertisers and away from user needs.”
When they came to Newsweek, where I was working at the time, none of the top editors wanted to meet them; web search seemed to be a niche function of Yahoo and AOL and the other dominant portals. So the business editor and I took the two to lunch at a seafood restaurant downtown. The enormity and bustle of New York seemed to overwhelm the awkward couple. The idea that their company could one day be worth $2 trillion seems about as likely as the Earth spinning off its axis.
Fast forward a quarter of a century. Google – now called Alphabet – is indeed worth several trillion. Internet search is deeply woven into all of our lives, as common as breathing – and Google has a 90 percent global share. Google has a 90 percent global share. Larry and Sergey, although still board members and shareholders with fortunes exceeding $100 billion each, are no longer employees. And this week, U.S. District Court Judge Amit P. Mehta issued a 286-page ruling based on millions of documents, thousands of pieces of evidence and a nine-week trial that Google violated antitrust law. “Google,” he wrote, “is a monopolist and has acted as such to maintain its monopoly.” What’s more, the company whose founders hated ads now faces a new trial to determine whether it is a monopolist in digital advertising as well .
Although it was hard to imagine in 1999, Google’s rise from upstart to overlord now makes obvious sense. Dominance, even to the point of monopoly, has turned out to be the inevitable destination for the winners of the age of Internet scale. The digital economy leads to winner-take-all competition, where early innovators from humble origins can have an advantage over established technology leaders who are soon to be displaced. Every company at the top of our current tech heap was founded by eager youngsters with a big idea, generally a concept rejected by the industry giants of the time. Before Larry and Sergey, there were Bill Gates and Paul Allen, two college students who saw a market for personal computer software; Steve Jobs and Steve Wozniak building Apple II computers in a garage; Jeff Bezos, who started Amazon on a budget to sell things on the Internet. A few years after starting Google, Mark Zuckerberg invented Facebook in his dorm room. These tech companies fighting their way to the top of the heap shared a narrative: David vs. Goliath.
But these thongs were something special. The network effects of the persistent and ubiquitous Internet accelerate and lock in the category leaders. Moreover, these founders were brutal competitors who made the most of these advantages. Larry Page was haunted by the story of Nikola Tesla, the brilliant inventor who died in obscurity and vowed not to be Tesla. Microsoft’s use of bundles to suffocate competitors was known (and led to an antitrust lawsuit that it lost). Jeff Bezos protected his flank with Napoleonic zeal, keeping customers close to him with low prices. A young Mark Zuckerberg used to end meetings by shouting the word “Domination!” Ultimately, when Davids become Goliaths, they fit into a new narrative: the myth of Icarus. Driven by the hubris of their dominance—and mistaking their network-effect-driven rise for their own unique geniuses—their heights have taken them dangerously close to the sun.
This is the context of Justice Mehta’s judgment. Specifically, it focused on Google’s practice of spending cumulatively tens of billions of dollars to default to the address fields of Apple and Mozilla browsers. Google insisted that it could make these deals only because its search engine was the best alternative: Apple would never force an inferior product on its customers. But the judge noted that Google’s dominance is a self-perpetuating phenomenon. Because Google handles almost all searches, it is able to collect data on a scale that its competitors cannot hope to match. This allows it to improve its search engine in a way that competitors can’t even dream of. It is legal to achieve a monopoly through a superior product or innovation, but the actions that I maintain monopoly as well as restriction of competition are illegal. So, says the judge, Google is breaking the law.
