The $2.7B fine that the European Union (EU) imposed on Google at the end of June for displaying its own comparison-shopping results over rival websites conjured not just two but three starkly different views of the future of technology and capitalism. The one under attack from Europe is the view – popular in corporate, if not small-business, circles since Robert Bork argued US antitrust law is all wrong in his 1978 book “The Antitrust Paradox” – that monopoly is often a natural reward for innovation and sometimes a necessary requirement for it.
The starkness of the EU decision – that super-platforms like Google must adhere to strict neutrality among competing information offerings – embodies a sharply different view. The four big platforms outside of China’s Great Firewall – Microsoft, Google, Amazon, and Facebook – are natural monopolies, pure and simple. Treating them as anything other than utilities dependent on empowering regulation by the state is at best naïve, at worst a reflection of creeping corporatism. Gates, Page, Brin, Bezos, and Zuckerberg simply won lotteries – we may as well have made a billionaire out of Christopher Sholes, who filed a patent for the QWERTY keyboard in 1867.
There lurks, however, a third, perhaps more bracing, view of technology’s and capitalism’s future – and it may belong to Google’s parent Alphabet. By collecting every click, keystroke, and query of every user; building personalized predictive behavioral models out of them; and using those models to serve ever-more addictive individualized content – Alphabet may eventually render obsolete or at least unusable the very notion of a market that states could accuse it of monopolizing. After all, a market of one is not a market. So why slog it out with EU competition commissioners when perfect price discrimination – and the capture of all, not just most, consumer surplus – is within grasp?
Alphabet need not be evil to pursue the goal of perfectly tailored information services. The horizons that such teaching and learning capacity open up stagger the imagination. But it utterly transforms the concept of price on which so much modern economic-welfare theory depends.