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this video is made possible by trends trends is the ultimate knowledge hub from the hustle trends is a networking community for entrepreneurs and budding entrepreneurs it's a place where you can connect and even workshop with investors and founders who can share valuable insights to help get your ideas off the ground trends brings together expert knowledge data science and investigative journalism to track new industries and likely trends do you remember our video about the surprising success of a2 milk that outstripped tech companies in profits in 2019. well over on trends you can find in-depth trends analysis on the alternative milk industry as well as detailed reports on loads of niche markets that could really help you to capitalize on your own ideas or maybe you're stuck for ideas dive into trends exclusive research with intriguing topics to help inspire like the 30 companies defining the future of media and pop culture or data on thousands of successful kickstarter projects we also like the live weekly lectures from founders who give practical tips about everything from internet security to branding to getting the most out of youtube hey you're never too old to learn something new best of all right now you can get your first seven days for just one dollar go to trends dot co slash vp for your one dollar seven day trial now let's see what grant is talking about today so my friends at visualpolitik today we are going to talk about a thorny issue because we are going to focus on the company where visualpolitik is hosted and one which owns the platform both you and i are using right now we are talking about alphabet and you'll see but wait a minute grant alphabet you're on youtube well yes we are on youtube but youtube is a part of google and in turn google is the main subsidiary of the conglomerate alphabet and that means that we're not just talking about youtube but we're also talking about google maps google earth android google drive and a long list of other things you see my friends the internet is big and diverse but most of what you find on here comes under the umbrella all or is dependent on five major players alphabet i.e google facebook amazon apple and microsoft these five large companies are also called annoyingly gafam or more properly big tech and so you'll say so what's the problem graham for example if it weren't for a platform as big as youtube visualpolitik wouldn't exist nor would almost any of the channels that you all like so much and which have started with some friends recording videos yes we could have a website but who would know about us without a search engine like google we would have had to spend thousands of dollars in advertising just to reach you and that's unthinkable for almost any youtuber however there is a risk i'll give you an example today the google search engine has more than 80 of the market worldwide there are very few countries where google is not the dominant search engine russia where it competes with yandex and china where it is obviously banned it's china after all in the rest of the world google is the main search engine and when i say main i mean that in countries as widespread in spain india and brazil more than 90 of searches are made through google in other words we could talk about the existence of a google monopoly on searches the name of the company even means to search i'll just google it and you're probably thinking but is this really a problem well it depends on how you look at it on the one hand google has earned its position by providing a fantastic service the question now is could a company emerge that would be able to compete with them and many of you will think what does it matter which search engine you use if you only use them for well for everything the search engine is the first thing we use before entering a website that is if something does not appear in the first search results of a google search then that thing basically doesn't exist this means google has a lot of power in theory this power isn't necessarily bad but sometimes it can have consequences like this antitrust eu commission finds google 2.42 billion euro for abusing dominance as search engine by giving a legal advantage to own comparison shopping service eu commission this is just one of the many fines that the european commission has imposed on google for what they call abusing its market position as of today google is appealing these fines in court none of these cases has an easy answer europe says google is abusing its market position google says that both its search engine and its android operating system are theirs it is logical that if you enter a store the owner wants to promote their product over any others for whatever reason as you can see we are talking about a debate where even the team here at visualpolitik don't really have a clear opinion and i know what many of you are probably thinking what if this was a strategy by europe to punish an american company well the truth is that these legal battles are not limited to europe check this out u.s justice department and 11 states accuse google of antitrust violations the lawsuit accuses google of using its enormous size to illegally monopolize the market for search generated advertising nbc news as you can see this is a charge very similar to those that europe has already presented and the judicial process will most likely go on for years again we are talking about a debate where there is no easy answer before going any further we have to say that google is not the only company facing anti-trust battles apple facebook and amazon are going through very similar processes but in this video we are going to focus on the alphabet group that is to say we're going to focus on google so if the lights go out and this video cuts off halfway through you know why today the question we're asking is so where does this legal battle come from to what extent are we talking about economic reasons or simple political interests how does anti-monopoly legislation work we're going to answer all of these questions but first let's look at some history the great dilemma of capitalism capitalism is an economic system that is based on you being able to start a business and if you provide a good service to people you will do well and if you give extraordinarily good service you can become practically the only provider of this service this really doesn't happen as often as people think in fact most of the monopolies that exist in the world are state-generated monopolies in other words most of the monopolies in the world are owned by public companies for example in spain renfie has a monopoly on trains some postal services are a state monopoly in the united states but there are also monopolies that arise from the free market system itself and this collides with another basic principle of our beloved capitalism competition that is as long as there are several companies competing in a field products will usually improve in quality and reduce in price if one company is not offering quality and good value customers will go to another if a company is big enough it can buy off its potential competitors for example when facebook bought instagram it ended up with one of its biggest competitors is this good or bad for the market there are valid opinions from every point on the spectrum and this is when we talk about antitrust laws and abuse of a dominant possession an example of this would be microsoft if you remember back in the 1990s microsoft had a monopoly on operating systems 90 of personal computers around the world used windows so the question was not between microsoft or apple but between windows 95 or windows 98 and then this happened justice department files anti-trust suit against microsoft for unlawfully monopolizing computer software markets justice.gov this 1998 lawsuit became bill gates's nightmare he was driven so crazy by this that many years later he would invent a covert 19 vaccine just so he could track his all that is a joke what actually happened is the department of justice accused microsoft of unfair competition illegal exclusivity clauses and also of abusing its dominant position by including its own internet explorer browser in the windows operating system and i think we can all agree that forcing us to use internet explorer was a crime the result however was this microsoft ordered to split into two companies the guardian in fact microsoft had to split into two one company in charge of operating systems and the other in charge of software however microsoft appealed and reached a less drastic but still quite painful agreement it accepted that competing companies would have access to its systems and application programming interfaces for the following five years these days 20 years after that lawsuit microsoft no longer has a monopoly on operating systems apple has gained more market share than it had before and there are even people who use their cell phones more than computers so operating systems like android are coming into play in other words microsoft is still a very competitive company but it no longer has a monopoly and here comes the big question that will blow your mind would this have happened if it wasn't for government intervention or was there always room for companies to outshine microsoft i'll leave that for you to reflect on but now let's get back to something we can answer what are they accusing google of what are the charges they are bringing to accuse google of monopolistic practices let's take a look at that right now don't be evil as you all know google is one of those companies created by an immigrant sergey brin is one of the co-founders of google with larry page brynn is a russian oracle 1995 these two students from stanford devised the basic algorithm of what would later become three years later they already had investors a company incorporated under the clever name google incorporated and even their own headquarters which a garage that by the way was owned by the person who would later become the ceo of youtube at that time the internet was just beginning it only had 200 million users worldwide even so there were already search engines like yahoo yandex and alta vista plus a long list of others that everyone's forgotten many of them even advertised on tv how'd you find this place yahoo although there was not yet a clear business model investors were convinced that the internet was the future so the race to adapt was wild now the next time you think you've made the biggest mistake of your life remember excite you probably don't even know what i'm talking about do you well in the late 90s excite was one of the most important portals on the internet with its own search engine an email service and a lot more in 1999 paige and brynn wanted to sell their fledgling google to excite for the grand sum of wait for it 750 000 that's right 750 thousand dollars it wasn't even worth a million however excite declined the offer and they weren't the only ones yahoo did exactly the same thing both companies knew that google's algorithm offered slightly better results than theirs but with the algorithms they already had they weren't doing so badly why change something that already works three years later excite was bankrupt to fully understand this you have to think about the disruption that google represented at that time google prioritizes results based on what matters to the user this may seem obvious today but at that time search engines prioritize results based on their own interests but not only that google was the only search engine designed to do just that search yahoo and many others tried to offer an all-in-one for you to stay on their website news weather and even games in other words google offered a much better product for users and users rewarded google with their trust in fact the slogan that summarizes the philosophy of this company and can be seen in all its offices is menacingly don't be evil in other words don't be evil and don't become one of those big and soulless evil companies in fact today google is one of the companies that treats his employees best if you want to know what a really fancy breakfast is make friends with someone who works at google you will never see a bigger and better free buffet in your life so i'm told anyway knowing it google wants to be friends with me and the truth is that this formula has worked for them until this point when google went public in 2004 its shares were worth 85 it was already a company comparable to ford with a market capitalization of 23 billion dollars well these days we're talking about a trillion dollars so what did google do to grow so much as you know nowadays google is a conglomerate that offers all kinds of services it has the most used browser in the world cloud services and of course this series google buys youtube for 1.65 billion dollars nbc news in short google has totally changed how we use the internet and let's be clear has changed it for the better without looking too far youtube has achieved what no public television station has ever achieved the distribution of educational and informative content to millions of people look google i said it please don't demonetize our channel and i know what you're all thinking of course graham it's normal to think that way google has literally changed our life don't worry about it and if you think that let's see what the problem is with the fact that google is just so big the abuse of power you don't become a trillion dollar company without making enemies one of the first was none other than the country france when google books came out the french government refused to let a foreign company digitize its cultural heritage so france put pressure on brussels to create a state version of google books europe the truth is that this product has ended up being a bit of a disaster other enemies of google are the traditional companies whose business model gets upset by the internet an example of this is the case of google news against spanish media in 2004 the spanish government passed a law by which portals such as google news had to pay a fee to the media in order to show clips of the news which is what google news does what happened next will not surprise you google shut down news site in spain over copyright fees reuters but it must be recognized there are also cases where legitimate criticism can be made of google there are cases where we could perhaps speak of a certain unfair advantage one of these cases is google maps google created its mapping service in 2005 but of course before that time there were already lots of companies offering maps on the internet if you had a website and you wanted to insert a map with your address you could hire one of these companies and this obviously had a cost but then google came along and they did it for free as a consequence many digital mapping companies were automatically bankrupt years later without any competitors left standing google maps became a paid service that is using google maps at home is free but using the google maps api for a large website does incur a charge in this matter the french company bought in cartographies even sued google maps in the tribunal the commerce they accused the tech company of what is known as dumping that is taking advantage of the fact that you are a very big company to set very low prices for a while in order to raise your competitors to the ground we also have the case of android google bought android inc in 2005. today 7 out of 10 mobile devices in the world use android in this market google is the king and this means that it can use all these devices to promote to the rest of its services that is you buy an android phone and have the google search engine on the main screen chrome is the default browser and google play installed by default someone who has another application store would have a hard time competing with google simply because they have such a hold on the market with android and this was precisely the reason for the fine of more than four billion dollars that the european commission imposed on google in 2018. something similar happens with google shopping if you search for a product on google the first strip that appears are the products that google itself sells and that's why both europe and the united states are putting so many demands on this company in fact the us department of justice's lawsuit against google is the largest in the industry since the microsoft case in 1998. what's more if the case against google is successful it will also have direct consequences for other big tech companies amazon facebook and apple what could happen if google loses the easiest thing would be to find it as the european commission did but in this case the question is to what extent does a fine really affect a company as gigantically rich as google at the other extreme we have the proposals like that of us senator elizabeth warren elizabeth warren says she wants to break up amazon google and facebook the verge what elizabeth warren proposes to do is to separate google into several different companies it wouldn't be the first time that something like this has happened the great precedent is a t the giant telecommunications company in the united states in 1984 it was forced to split into several small companies known as the big brothers that's another joke it was called the baby bells so what's the problem the problem is that these measures violate property rights but that's not all most likely the companies that would emerge from google's atomization would end up being monopolies in their respective niches so the most likely option is the united states would force google to share its platform and some of its algorithms with competitors and here we come back to the question with which we started this whole video is it really so impossible to compete with google even if you have a better service as you can imagine google says no their lawyers argue that if alphabet companies have got where they are it's only because they are better and it is likely that we will have the answer soon tech companies including spotify and the maker of fortnite seek to reform app stores marketwatch it is very likely that several tech companies will end up joining together to create their own google play competitor these companies complain about the commissions they have to pay to be in the app stores and maybe they'll come up with their own alternative at that point we'll see how easy or difficult it is to compete in a segment as momentous as mobile applications in the meantime here are a couple of questions for you do you think that the european fans on google are effective do they really encourage competition and creativity or is it really google's bad luck that no one has found the formula to compete with it's search engine in short why do almost all of us use google and we're not looking for filthy answers i know why some of you use google you can leave your answers in the comments as always we really hope you enjoyed this video please hit like if you did and don't forget to subscribe for brand new videos don't forget to check out our friends too at the reconsider media podcast they provided the vocals in this episode that weren't my dulcet tools finally this channel is possible because of patreon and our patrons on that platform please consider joining them and supporting our mission of providing independent political coverage and as always i'll see you next time and if you want to learn more about politics and hear even more of my lovely voice you can join us at reconsider media we have a podcast at reconsider media.com podcast see you there