5 ms·

Google Was Three Hours Away From Being Charged As A Monopolist

22 points by jmorin007 18y ago

sh1mmer 18y ago
Techcrunch seems down. Hm.
- sh1mmer 18y ago
  Oh and to summarize the story. According to a DOJ consultant Sanford Litvack Google they were 3 hours away from filing anti-trust charges against Google when the plug was pulled on the Yahoo! deal. Another source here: http://www.techflash.com/Report_Google_Yahoo_were_three_hours_away_from_antitrust_complaint35499814.html http://www.techflash.com/Report_Google_Yahoo_were_three_hour...
vaksel 18y ago
this probably means that instead of trying to look for high profile deals, Google will instead spend the money acquiring some startups with a growth potential
mattmaroon 18y ago
I don't know why they ever went forward with this. When your market share is 70% and climbing, you really have to watch out for these sorts of things. The relatively minor profits they would have made from Yahoo aren't worth making anyone in the DoJ think twice about you. I guess when it came down to it, they decided that taking that risk was better than Microsoft ending up with Yahoo, which makes Yahoo's decision not to sell even more ludicrous. As Sun Tzu said (loosely paraphrased) figure out what your opponent wants you to do and then do the opposite.
- gojomo 18y ago
  Google may never have expected the move to pass antitrust review. Even as a feint, this proposal sufficed to drive MS away from Yahoo, which Yahoo's management at the time also wanted.
  - mattmaroon 18y ago
    Yeah, I don't know. Probably. Just seems risky to even put the notion in the DoJ's collective head that you need watching for monopoly concerns. Maybe less risky than having a combined Microhoo competitor, idk. If I'm Yahoo and I think that one through, it would make me want to sell more, but then I guess I would have said "sold" the minute the original offer came in.
crabapple 18y ago
so much for pg's "high res" web market
snprbob86 18y ago
I'm confused. I thought monopolies in the US are legal. I thought that abusing the power of a monopoly was the illegal part. Were they going to charge them as being a monopoly? Or charge them with illegal monopolistic practices? Is there a lawyer in the house?
- gwc 18y ago
  IANAL, but it is my understanding that at issue here is the deal would (could) have created / extended a monopoly. Antitrust in the US does not disallow monopolies, per se, as you note; however, it does disallow creation or furthering of a monopoly via contracts, M&A, conspiracies, collusion, etc. From US Code Title 15, Chapter 1, § 1: Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal. Source: http://www.law.cornell.edu/uscode/html/uscode15/usc_sec_15_00000001----000-.html http://www.law.cornell.edu/uscode/html/uscode15/usc_sec_15_0... The other sections of that chapter discuss some specifics (such as §18, which specifically covers M&A) and there is a wealth of case law backing it up and clarifying, as well.
nikils 18y ago
I am not much familiar with anti trust laws. Can a foreign firm make this deal with Yahoo ? If yes then Google can create a proxy firm to make the deal, will it still be considered monopoly ?

22 points by jmorin007 18y ago

sh1mmer 18y ago

Techcrunch seems down. Hm.

sh1mmer 18y ago
Oh and to summarize the story. According to a DOJ consultant Sanford Litvack Google they were 3 hours away from filing anti-trust charges against Google when the plug was pulled on the Yahoo! deal. Another source here: http://www.techflash.com/Report_Google_Yahoo_were_three_hours_away_from_antitrust_complaint35499814.html http://www.techflash.com/Report_Google_Yahoo_were_three_hour...

vaksel 18y ago

this probably means that instead of trying to look for high profile deals, Google will instead spend the money acquiring some startups with a growth potential

mattmaroon 18y ago

I don't know why they ever went forward with this. When your market share is 70% and climbing, you really have to watch out for these sorts of things. The relatively minor profits they would have made from Yahoo aren't worth making anyone in the DoJ think twice about you. I guess when it came down to it, they decided that taking that risk was better than Microsoft ending up with Yahoo, which makes Yahoo's decision not to sell even more ludicrous. As Sun Tzu said (loosely paraphrased) figure out what your opponent wants you to do and then do the opposite.

gojomo 18y ago
Google may never have expected the move to pass antitrust review. Even as a feint, this proposal sufficed to drive MS away from Yahoo, which Yahoo's management at the time also wanted.
- mattmaroon 18y ago
  Yeah, I don't know. Probably. Just seems risky to even put the notion in the DoJ's collective head that you need watching for monopoly concerns. Maybe less risky than having a combined Microhoo competitor, idk. If I'm Yahoo and I think that one through, it would make me want to sell more, but then I guess I would have said "sold" the minute the original offer came in.

crabapple 18y ago

so much for pg's "high res" web market

snprbob86 18y ago

I'm confused. I thought monopolies in the US are legal. I thought that abusing the power of a monopoly was the illegal part. Were they going to charge them as being a monopoly? Or charge them with illegal monopolistic practices? Is there a lawyer in the house?

gwc 18y ago
IANAL, but it is my understanding that at issue here is the deal would (could) have created / extended a monopoly. Antitrust in the US does not disallow monopolies, per se, as you note; however, it does disallow creation or furthering of a monopoly via contracts, M&A, conspiracies, collusion, etc. From US Code Title 15, Chapter 1, § 1: Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal. Source: http://www.law.cornell.edu/uscode/html/uscode15/usc_sec_15_00000001----000-.html http://www.law.cornell.edu/uscode/html/uscode15/usc_sec_15_0... The other sections of that chapter discuss some specifics (such as §18, which specifically covers M&A) and there is a wealth of case law backing it up and clarifying, as well.

nikils 18y ago

I am not much familiar with anti trust laws. Can a foreign firm make this deal with Yahoo ? If yes then Google can create a proxy firm to make the deal, will it still be considered monopoly ?