An Excerpt From “Killing the Competition: How the New Monopolies Are Destroying Open Markets”
During the past decade, a few giants have managed to fence in market after market for hardware, software, and content. Some did so simply by buying up their competitors. Oracle CEO Larry Ellison once said that acquiring another company was “a confession that there’s a failure to innovate.” But Ellison himself decided to opt for the more reliable profits that come from buying one’s competitors, which in Oracle’s case included PeopleSoft, Siebel, BEA, Sun Microsystems, and more than sixty other firms. During the same period, Google—even while branding itself as the dreamiest of inventors—vacuumed up close to a hundred companies, including such core components as YouTube, DoubleClick, and ITA.
John D. Rockefeller, whose Standard Oil ruled the energy industry for decades, liked to present his predations as acts of altruism. “We will take your burdens,” he would tell his target. “We will unite together and build a substantial structure on the basis of cooperation.” But all understood perfectly the ultimatum hidden in the honeyed words: Join or be crushed.
So, too, today’s lords of the Valley, who enjoy the power to choreograph competition among the latest generation of upstarts and then buy whom they please, when they please. Yet this de facto license to govern a trillion-dollar industry—and with it, entire swaths of the American economy—appears to have left these high-tech headmen unfulfilled. Or so we learned when the Justice Department complained in 2010 that senior executives at Apple, Google, Intel, Pixar, and two other corporations had “formed and actively managed” an agreement that “deprived” the engineers and scientists who work for them of “access to better job opportunities.”
Even in those reaches of society long accustomed to the rule of the few, the fact that some of the biggest and the richest had agreed not to poach one another’s workers managed to shock. In an editorial, the New York Times wondered “What Century Are We In?” When all six companies settled with the DOJ in September 2010, they denied any legal wrongdoing, and simply agreed to abstain from such labor practices for the next five years.
(Source: azspot)
