The Algorithm Wars

Why Breaking Up Google in 2024 is Fighting Yesterday's Battle

The US government just launched its biggest tech antitrust case in decades. Their target? Google's Chrome browser. Meanwhile, China's TikTok has quietly become the West's dominant search engine for an entire generation.

The timing is darkly ironic. While American regulators obsess over browser market share, Beijing is winning the algorithm wars - building the most sophisticated attention prediction and influence system ever created.

We're fighting yesterday's battle with outdated weapons. Big Tech needs regulation - but not like this. We need a new framework for the age of digital utilities.

The Paradox of Free Products and Market Power

Consider Google Search. Despite commanding over 90% market share, it remains free to users. This creates a paradox for traditional antitrust theory: how can a product simultaneously dominate its market while extracting zero direct consumer surplus?

The answer lies in the nature of attention markets. Google monetizes through advertising, creating a three-sided market between users, advertisers, and content creators. Each additional user makes the platform more valuable for advertisers while simultaneously improving search result quality through enhanced training data.

Chrome's dominance follows a similar pattern. While critics point to its default search settings as anticompetitive, users face zero switching costs to alternative browsers or search engines. The persistence of Chrome's market position stems not from coercion but from the compounding benefits of vertical integration.

In fact not so long ago, Microsoft was under antitrust scrutiny for anticompetitive distribution of Internet Explorer. Chrome, a web browser not made by Apple or Microsoft, is one of the last independent browsers. The next closest competitor, Firefox, is almost exclusively funded by Google as well.

Abuse of Distribution, Not Network Effects

Traditional antitrust frameworks struggle with network effects because they confuse natural platform dynamics with anti-competitive behavior. Google Search gets better with more users. That's not monopolistic - it's how digital platforms work.

The real issue isn't network effects - it's how companies abuse their scale and distribution. When Google uses Search dominance to push its own products above competitors, that's anti-competitive. When Apple forces developers to use their payment system and charges them above market processing fees, that's abuse of market power.

Breaking up these platforms doesn't address the actual problems. You don't solve abuse of distribution by fragmenting networks. You solve it with clear rules about how dominant platforms can behave.

The Problem with Late Regulation

Regulation typically comes too late in an innovation cycle. In the early 2000s, Microsoft was fighting antitrust battles over Windows and Internet Explorer. This distraction caused them to miss building a dominant mobile platform.

We're seeing the same pattern today. For 20 years, Google's advantage was simple: more traffic = better training data = better results. This flywheel was nearly impossible to break and they created a phenomenal business. 

But technology has shifted. AI algorithms can now generate high-quality results with minimal data. Companies like Perplexity and You.com are proving you don't need Google's scale to build competitive search; these new models need a fraction of the training data to be accurate.

Meanwhile, Google is losing in the fastest growing category of search: video. 40% of GenZ prefers to use TikTok as their search engine. Not just for entertainment - for restaurants, products, and general information.

The government is forcing Google to fight over Chrome's market share while the fundamental nature of search is changing. We're regulating the wrong problem at the wrong time.

The Regulatory Path Forward

Rather than pursuing breakups, we should treat dominant tech platforms as digital utilities:

• Mandate equal access and non-discrimination

• Regulate rent extraction (e.g., App Store fees)

• Ensure data portability

• Maintain privacy and security standards

Let's take Google Flights as an example. Google showing its flight results above Expedia? That's using market dominance in search to squeeze competition in travel. A utility framework would require Google to rank Expedia fairly against its own products. Same rules should apply across Maps, Shopping, and other vertical searches.

The Algorithm Wars: the Digital Cold War

The real battle isn't about browser market share – it's about who controls the algorithms that increasingly shape global consciousness and commerce. While Western regulators fixate on Chrome's distribution, China has quietly built the world's most sophisticated attention prediction and influence system through TikTok.

This isn't just about social media dominance. TikTok's recommendation engine represents a fundamental leap forward in algorithmic capability. Its ability to predict and shape user behavior extends far beyond entertainment, becoming the default interface through which Gen Z discovers everything from products to politics. Each scroll, each pause, each interaction feeds into an increasingly precise model of human attention and behavior.

The stark contrast in governance models is telling:

Western platforms operate under intense scrutiny – their algorithms dissected by researchers, their CEOs regularly summoned before Congress, their data practices constrained by privacy laws. Meta's every algorithmic tweak faces public criticism; Google's ranking changes trigger congressional inquiries.

Meanwhile, ByteDance operates as a black box. Its algorithm – potentially the most powerful tool for mass influence ever created – answers to Beijing, not democratic oversight. When TikTok executives testify before Congress, they offer carefully scripted evasions about data access and content moderation. The real decisions happen behind closed doors, guided by priorities that align with China's strategic interests.

This asymmetry creates a dangerous dynamic: While American tech giants are hammered into regulatory submission, their Chinese counterparts operate with relative impunity, expanding their reach and refining their capabilities. We're effectively handicapping ourselves in the most important technological race of our time.

The stakes extend far beyond market competition. These algorithms increasingly determine what information billions of people see, what they believe, and how they behave. If we allow this power to concentrate in the hands of opaque, unaccountable entities aligned with authoritarian interests, we risk ceding control of the digital infrastructure that will define the next century.

Breaking up Google won't solve this problem – it will accelerate our decline. Instead of fragmenting our technological capabilities, we need a coherent strategy that preserves innovation while ensuring algorithmic systems serve democratic values. This requires sophisticated regulatory frameworks that address real harms while maintaining our competitive edge in the global algorithm wars.

Looking Forward

As a technologist, I want more competition in Search. Google results feel stale, and innovation has stalled. The teams at Perplexity, You, and others are making exciting progress in next-gen search.

But as an American, it is treasonous to think Government overreach would suffocate one of our greatest strategic assets. The next decade determines whether the future of technology serves democratic or authoritarian ends. Breaking up American tech companies would be an own-goal of historic proportions.

The path forward isn't dismantling these platforms but thoughtful regulation that preserves innovation while ensuring they serve the public interest. We need to move fast - while we debate Chrome's market share, China is winning the algorithm wars.