History suggests that anti-trust action is the wrong way to promote innovation in IT.
Unless you work in the technology sector or the City, it is quite possible you have never heard of International Business Machines.
Nowadays the IBM logo doesn’t appear on many gadgets: the company concentrates on the forefront of artificial intelligence and on running - very profitably - those invisible ‘cloud’ data centres on which the information economy depends. IBM also regularly tops polls for being the most admired global corporation, with achievements ranging from Nobel prizes to being decades ahead of the field in tackling discrimination based on race and sexual orientation.
They weren’t always the nice guys. For several decades in the last century IBM was widely seen as a sinister behemoth whose monopoly on the entire value chain of computing threatened capitalism itself. At one stage, whole swathes of industry and government were locked in to the System 360 mainframe, in which hardware, software and support were all jealously guarded IBM domains. Big Blue’s omnipotence was satirised as ‘HAL’ in the movie 2001 and the ‘Sirius Cybernetics Corporation’ in The Hitchhiker’s Guide to the Galaxy.
More seriously, IBM attracted the eye of the US Justice Department, in a gargantuan antitrust case which ran for 13 years. When that was finally dismissed as ‘without merit’ in 1982, the pundits predicted that the last check had fallen against a company even then poised to conquer the exciting new personal computing market. (I know, because I was one of the pundits.)
It didn’t work out like that. When a global giant emerged in personal computing it wasn’t IBM, or even one of its ‘seven dwarf’ rivals in the mainframe manufacturing business. The new behemoth was a software start-up called Microsoft. Which in turn attracted the ire of competition authorities when it tried to make its operating system the default gateway to the world wide web. In the end, it coughed up some $3bn in penalties to the EU.
But that wasn’t the reason Microsoft lost the browser wars. It was another start-up, Google, which found the key to web dominance through its superior search engine technology and geeky corporate ethos.
And guess who’s now in the frame for two massive new antitrust investigations, for allegedly abusing its dominance in search technology to the benefit of its own online shopping service and Android phone operating system. Perhaps the European Commission's cases will turn out to have merit; certainly a lot of tech-watchers will enjoy seeing the hubristic Google getting some comeuppance.
But my suspicion is that, by the time the cases have rumbled through the process - on the way enriching a good many law firm partners - at least some of Google’s activities will have been eclipsed from an unexpected direction. The internet is good at that. And even now, it’s worth remembering that Google has nothing like the end-to-end power enjoyed by IBM and Microsoft in their glory years.
Just possibly, Google’s dominance in search technology will turn out to be different, and the company will need to be financially hammered and even dismembered to allow competition to flourish on the web. But if history teaches us anything, it is that betting on history having ended is a mug’s game.
Michael Cross is Gazette news editor