Google is not leveraging its search monopoly by giving away Android
theorangeview.net
theorangeview.net
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I have a large farm where I grow carrots, and I have the best and largest land for growing them. As the entire ecosystem I am in is built on horses eating carrots, all growth eventually turns into me making even more money: I am flush with cash and have the worlds largest silos and most interesting farm equipment.
Given that I have so much cash, and pretty much all the worlds strongest farmhands work for me, I decide to "have some fun": I build "ok" stuff an give it away for free.
I mean, sure: there's some guy out there selling buggy whips, and they are awesome, but I can just hand our buggy whips /constantly/: they fall apart, but they work, and many (most?) people don't care.
You could say I'm "losing money" on the buggy whips, but the fact that people were spending that money on buggy whips is just more money they weren't spending on carrots, so I am not losing as much as you'd think.
However, my "competitors" (do I even bother to think of them as such?... they are pretty much ants in comparison) find it harder an harder to operate in this environment: they need to actually make money on those whips.
Even worse, customers don't even seem to realize anymore that buggy whips have any underlying cost: or anything else, really. People who offer buggy whips for money are seen as "greedy", and customers even start to question why they are paying money for saddles... some even call for me to make those for free too (and why not: consider it done).
This turn of events is awkward, and damaging on the entire economy: I am simply going aroun messing with every market I consider smaller than me, messing with the incentives.
Why? Partly fun, but it is certainly difficult to discount "power" as a contributing factor: it is a wonderful feeling to see my bran on every product, and make everyone super reliant on me for /everything/, not kist their carrots. Hell: people even like me more, because I'm obviously so "altruistic".
Now, how can I do this? It is not that I have some awesome "free or freemium business model": it is only because I have a mear monopoly on carrots. If I had any serious competitors on carrots, their prices would be lower, as they wouldn't be wasting cash handing people free buggy whips (and free everything else, even stuff totally unrelated to carrots).
This /is/ leveraging a monopoly. If you can do something that accumulates power and assets that is only possible because you have a monopoly and you choose to actually take advantage of it, that /is/ leveraging.
Of course, it is also important to ask "is it legal?", and the answer might very well be "yes". Bundling, a specific form of leverage that Microsoft was using, was considered illegal, but I am not a lawyer and have no clue how comprehensive the laws were.
But seriously: you cannot imagine that it is an efficient use of our economic resources to have Google buying up anyone who sells something awesome (including Android: that was an acquisition) so they can give it away for free instead.
By locking users into IE, Microsoft was decreasing competition. Google, by pumping resources into Android and Chrome, is increasing competition.
Example: when Google gives away Google Voice service, that is a horribly bad thing for that market. There are tons of competitors in that space that have fundamentally better service, but competing with /free/ is so serious of a barrier to entry in the mind of a user that you have to be like mind-blowingly-ultra-horribly better, which isn't even really possible. Google Voice is an aberration in the market caused by an unrelated monopoly.