Microsoft’s Lessons for Google

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My colleague Steve Lohr has seen almost everything in technology. And even he believes the power of Big Tech is like nothing he’s seen before.

Steve’s more than 20 years of writing about tech for The New York Times includes covering the U.S. government’s antitrust lawsuit against Microsoft, which started in 1998 and ended with a settlement in 2002.

Steve spoke with me about that case and the multiple government antitrust lawsuits filed in recent months against Facebook and Google, including a fresh Google antitrust case filed on Wednesday and another expected on Thursday. He said that 1990s Microsoft didn’t have nearly the influence of today’s tech superpowers.

Shira: What’s similar about the Google and Facebook antitrust cases and the Microsoft one?

Steve: Many of the legal and business issues are similar. There’s a notion that proving Google and Facebook hurt consumers will be tough because harm has mainly been defined as raising prices, and those companies’ products are mostly free.

But prices weren’t really part of the Microsoft case, either. Microsoft’s Internet Explorer web browser was free, bundled into Windows. The government said that Microsoft did that to defend its monopoly from the threat posed by the internet.

Another anxiety now about Big Tech is their gatekeeper role — that they have the power to influence which businesses or industries thrive or die. It was exactly the same with Microsoft. Banks, news organizations and carmakers were worried that Microsoft would monopolize the web and become a tollbooth between them and their customers.

Those fears were wrong that Microsoft would dominate the web, but they were right that the internet upended entire industries.

Most mid-1990s predictions about the internet came true — just a decade or more later and with a twist.

What feels different about the Google and Facebook antitrust cases?

Today’s technology powers touch far more sectors of life than Microsoft ever did. The Microsoft antitrust case was fairly narrowly focused on commercial and market power. Questions about Big Tech now have a bigger canvas than antitrust. It’s also about misinformation, their ability to shape public opinion, data hoarding and how the downsides of that should be restrained by the government, if at all.

What impact did that case have on Microsoft and on technology?

It’s impossible to know, but I think Microsoft was chastened by the antitrust case and that may have created room for Google and other tech companies to thrive. But technology also changed faster than Microsoft did.

Will that happen with what feels like these unbeatable Big Tech companies?

Never say never. But the network effects and lock-ins of today’s tech powers are on a scale that we haven’t seen before in their areas of technology. It’s reasonable to ask whether government interventions might be needed to level the playing field.

What are overlooked changes that have emerged from technology?

The technology that’s seeping into every industry has the capacity to do what the manufacturing sector once did: Help lift more people into the middle class.

A negative change is a tendency to trust technology too much. A doctor recently told me that diagnostic software in medicine is useful but also risky if we rely on it without thinking. The ultimate Hollywood example of dystopian tech is “Wall-E” — technology making everything so easy that we lose our personal agency

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Is this a smoking gun for Google?

The state governments’ lawsuit against Google on Wednesday had what might be the biggest reveal of all the Big Tech antitrust lawsuits filed so far.

One claim by the 10 states led by Texas was that Google had a secret agreement with Facebook several years ago to fight what was then an emerging method of buying advertisements online. Google was worried that this process known as “header bidding” — Wired has a good explanation — threatened the company’s sales and so it asked for Facebook’s help.

In return for Facebook’s promise not to support this alternative advertising system and funnel advertisers to Google, the lawsuit said, Google gave Facebook preferential treatment in the computerized auctions that Google conducts to determine who buys an advertising spot in apps.

I know, this is complicated. But you get the drift even without understanding the details: The states are saying that Google and Facebook colluded to help their own businesses at the expense of everyone else’s.

This is an allegation, not a fact, and many potentially juicy details are blacked out in the public version of the lawsuit. But if the allegations are true, they are not good for either company.

(Google said the claims in the lawsuit had no merit and a spokeswoman for the company told my colleagues that the allegations involving Facebook were inaccurate. A Facebook representative declined to comment to my colleagues.)

Many of the allegations so far in the lawsuits against Google and Facebook are not the kind of courtroom reveals in “Law & Order” that make jurors gasp and weep. (That happens on TV, right?) And that’s fine. Proving an antitrust case doesn’t require surprises.

But this Facebook detail is the stuff of legal thrillers. Well, a certain kind of legal thriller. The big deal here is that being a monopoly is not against the law in the United States. What is against the law is getting that way by cheating and hurting everyone else in the process. A collusion with one of Google’s biggest competitors would be cheating.

Before we go …

• I am here for this petty, pointless beef: The bosses of Facebook and Apple each think the other company walks all over the rest of us. (They’re both right.) My colleagues Jack Nicas and Mike Isaac detailed the companies’ long-running feud and why it’s rather silly since each company needs the other. DealBook also has more on the fracas.

• It’s not fair to need a school bus to go online: In another sign of America’s inequitable internet system, Kathleen Gray and Erin Kirkland have a photographic essay of families who rely on school buses in Jackson, Mich., that serve as mobile internet access points. About one in five schoolchildren in Jackson logs on this way.

• Maybe there’s a point to all our stupidity online? This was a peak year for ill-considered social media posts and ill-considered responses to them. (The bodega tweet was … oh boy.) Cringe at all the online boo boos with this Vox writer, who says that our bad posts help us understand human behavior and learn how to be better.

Hugs to this

This Instagram account has elaborate Jell-O mold constructions filmed in slow motion to show off their wobbly glory.

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